"Tax Incentives" is a rather vague term that could mean a number of different things. As it plays out in America, cities offer tax incentives all the time to attract businesses, and so do states. The incentives differ from situation to situation, but generally grant a low-rate for a set number of years and then go to normal rates after the business is established. The incentives are rarely permanent and have a negligible impact on long-term competition. To me, this is like asking if it is OK for a store to offer discount prices to attract customers. I would say that countries that offer competitively low wages, low union laws, low social welfare, low environmental laws, and low business regulation in general are awful. But that's a different question.