Major foreign investors such as Dell and Bristol-Myers Squibb have liquidated Irishregistered companies and transferred up to 40bn in assets to other jurisdictions . . .essentially nailing up brass plates in someone else's shiny office block. Jobs may not be disappearing yet, but the business case for foreign direct investment here could be under threat by a surprising adversary: the Netherlands.

The birthplace of modern capitalism is undergoing something of a renaissance as the government there has introduced aggressive new tax laws in a pitch to snatch company headquarters, value-added jobs, research and development investment and intellectual property royalties from its EU competitors . . . including Ireland. In fact, the Netherlands Foreign Investment Agency (NFIA) has explicitly targeted Irish-based business.

"We're trying to attract logistics from the Irish market, " said Pieter van Gulik, NFIA's UK and Ireland director. "This is higher up the supply chain. Our ideal situation is where there is some manufacturing, say in Ireland, the goods are finished in the Netherlands and then shipped throughout Europe, particularly in the pharmaceutical and medical technologies market."

Growth in those two industries, of course, is central to our government's own plan to shimmy up the value chain - with the usual boost from our friendly 12.5% corporate tax rate. The problem, however, is that the Dutch have friendly tax policies of their own.

The headline corporate tax rate in the Netherlands is still relatively high at 20-25.5% depending on income. But royalties on intellectual property arising from R&D attract tax of 10% or less, interest on intracompany loans comes in at 10%, too, while capital gains on sales of company assets are tax free. There is also a tax-free exemption on dividends and income from subsidiaries if a Dutch company holds at least 5% of its shares. Moreover, because of discretionary flexibility within the tax code, the effective rate on these activities can approach zero.

While the tax regime is a major factor for attracting multinationals, the business environment and infrastructure are also very good, according to Edwin Veele, of Tax Consultants International.

"A lot of foreign companies have their fully equipped and trading headquarters in the Netherlands, " he said. "The main reason for the Netherlands to improve its tax structure is to attract large international companies' headquarters . . . it's not really about postbox companies."

It's an area Ireland would like to compete in, too, but with a less sophisticated business infrastructure and a more rigid tax code, it could easily cede ground to the Dutch. The Netherlands is suspected as the destination for the nearly 8bn Dell liquidated at the end of last year. Bristol-Myers Squibb has not disclosed the destination for its assets, but reportedly moved them for tax reasons.

"I wouldn't be surprised if Dell moved the whole thing to the Netherlands, " said Richard Murphy, director of Tax Research, a UK tax consultancy which specialises in tax havens. "You're going to see a flood of companies out of Ireland."

That may be an alarmist take, according to Dr Brian Lucey, lecturer in finance at Trinity College's school of business, but the dangers of losing the tax battle are real.

"If [the asset flight] is part of a trend, we have a problem, " he said. "If other European countries with deeper infrastructure downstream adopt comparable tax regimes our advantage gets eroded . . . what else would companies come for?"

He said Ireland has failed to develop a generation of sophisticated financiers on the back of all the money washing through the country in the last decade and a half. While the government is pouring billions into hard sciences, the financial infrastructure to keep companies here is being neglected.

If enough companies jump to other jurisdictions, there could be a self-reinforcing downward spiral as companies act on a trend and the pool of sophisticated labour dries up.

"A large chunk of middle class administrators could find themselves in trouble either having to move abroad or being made redundant . . . with implications for the housing market, etc, " he said. "If this is a straw in the wind, we need to see which way the wind is blowing."