Business Opinion: Over the last 20 years a machine has been built in Dublin's docklands. It is incredibly complicated, and has thousands of separate parts all of which require careful maintenance by thousands of highly skilled operatives. At its heart are 350 or so licensed International Financial Services Centre companies, many of which do not exist in any physical form.

Billions of euros pass through this machine every year, helped on its way in and out of Ireland by a phalanx of lawyers, accountants and bankers, who in turn rely on a small army of secretaries, clerks and tea ladies. They account for a very significant portion of the 10,500 jobs that the International Financial Services Centre has been credited with creating.

Feeding this machine is not easy. Its meal of choice is the tax bills of multinational corporations which can be significantly reduced by the trip through the Dublin machine. Finding fresh fodder is always a challenge and it is no surprise that the decision by the Minster for Finance to introduce a "holding company regime" in the Finance Bill has been welcomed with joy by the legal and accountancy professions.

Anybody who thinks that the Minister's decision is going to see office blocks sporting the names of big corporations in conjunction with the words "worldwide head office" starting to appear all over the State should think again.

What you can expect to see instead is even more brass plates adorning the walls of Ireland's big banks, accountancy firms and legal practices, because the measures in the Finance Bill have added a whole new set of cogs and teeth to the Dublin tax-cutting machine.

The main change brought in as part of the "holding company regime" in the Finance Bill is a tax exemption on profits made by Irish-registered holding companies when they buy and sell their overseas subsidiaries. This may be of real benefit to Irish companies with international subsidiaries and adds another quite significant string to the bow of IDA Ireland when it is touting for inward investment.

But the likelihood is that the biggest utilisers of the legislative changes will be global corporations availing of another option in their increasingly complex tax planning. If it makes sense, they will happily shift ownership of existing business to brass-plate companies in Dublin, and also start to design new transactions and structures around this particular tax break. Eager to help will be Dublin's tax lawyers.

Equally, the second change to the holding company legislation brought in by the Finance Bill is welcome news for Irish companies that receive dividend payments from their overseas operations. The changes mean that they can benefit to the maximum from available tax relief.

But once again the various tax partners in Dublin's big law and accountancy firms will try to come up with ways to use these changes to push even more money through the IFSC machine. If they have not done so already.

It is hard to avoid the conclusion that the real Irish beneficiaries of the holding company regime will be the banks that administer the companies set up here to avail of the tax breaks for their parents, and the lawyers and accountants who service them.

And what is wrong with that? Jobs, after all, are jobs. Creating employment in the IFSC through tax changes is just as valid a Government policy as paying massive grants to companies to set up factories here. In fact, you could argue that it is a better and more cost effective one, as it requires no State money up front. The jobs involved are the type that the Government says Ireland needs.

There is also the chance that a company that establishes a brass-plate operation in Dublin to avail of the holding company tax breaks might ultimately establish a "real" business here if it is impressed with the business environment.

It is hard to put a finger on what it is about this that makes one feel uneasy. Perhaps it is the idea of changing the laws for no real reason other than to boost the fee income of professional services firms and hopefully create a few jobs.

More likely it is just the hangover effect of the collapse of Enron and the shock waves that it has sent through the financial system. The sort of complicated tax-based business which is the bread and butter of the IFSC is left somewhat tainted as a result.

But that is probably unfair. Undoubtedly there have been some problem companies in the IFSC over the years but only one of these scandals - the collapse of Italian food group Parmalat - appears to have extended to these shores in any public way. The company's Irish operation, Eurofood IFSC, was a brass-plate operation established in 1997. It was administered by an IFSC bank and serviced by Irish lawyers and accountants.

The danger is that - if the law had allowed it to do so back in 1997 - Parmalat might also have set up a holding company in Dublin, which ultimately could have dragged the IFSC further into the mire surrounding Parmalat.

A risk worth taking in order to keep the machine fed?

jmcmanus@irish-times.ie