updated 12/13/2005 3:41:05 PM ET 2005-12-13T20:41:05

Internet search provider Google Inc. announced Tuesday it will expand the workforce at its European headquarters by 600, or 75 percent, over the next two to three years.

The company's Dublin office, established in 2003, supports its European, Middle Eastern and African activities and is Google's largest base outside the United States.

Google credited the high caliber of European university graduates available — and Ireland's unusually low corporate tax rate — with influencing its decision.

A recent Google filing with the U.S. Internal Revenue Service said the company had reduced its tax rate from about 39 percent in 2004 to 31 percent through the first nine months of 2005 thanks primarily to its ability to credit profits to its new Irish operations. Ireland's corporate tax rate is 12.5 percent, compared to 35 percent in the United States.

John Herlihy, Google's European director of online sales and operation, said Google had signed a lease to acquire another 100,000 square feet (9,300 square meters) of office space beside its existing Dublin building.

"Basing our European operations here in Dublin has proven to be a great decision," Herlihy said. "We have found that the quality of the Irish work force has enabled us to improve our products and services in a way that has proven to be highly beneficial for our customers, both users and advertisers."

Ireland's minister for enterprise, trade and employment, Micheal Martin, declined to specify how much financial aid was being provided by the Investment and Development Agency, which is responsible for wooing multinational companies to Ireland.

Hundreds of high-tech businesses from North America and continental Europe have established operations in Ireland over the past decade of the nation's Europe-leading economic growth. Unemployment now stands at an EU-low 4.3 percent, and many of Google's workers are recruited from other European countries.

"This decision yet again demonstrates that Ireland is by far and away the primary location for the digital media industry in Europe, and second only to Silicon Valley in the U.S.," Martin said.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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