Post Brexit Ireland
Post Brexit Ireland is an interesting place. IDA Ireland is the government body responsible for attracting foreign direct investment into Ireland. The IDA helps foreign companies setup in Ireland. It brands the country as “one of the best places in the world to do business“. Is this true? And if so, does the UK’s probable exit from the EU now make the Republic of Ireland the premier spot for international businesses to invest and establish in when selling their good and services into Europe?
The list of world leading technology, biomedical and pharmaceutical companies based in the Republic of Ireland is enormous. Companies includes Intel, Dell, Microsoft, HP, SAP, Pfizer, Eli Lilly, Johnson & Johnson, Apple, Google, Facebook, Twitter, LinkedIn, Paypal and AirBnB, to name but a few. In fact, nine of the world’s top ten technology and media companies choose to base their European headquarters in the Republic of Ireland. The Guardian reports that over 700 U.S. companies are now located in the Republic of Ireland. The country has benefited from around $277 billion of U.S. direct foreign investment in the past two decades.
5 reason to choose to invest and setup in Ireland?
But why is the post Brexit Ireland such a draw for international companies? There are broadly five benefits that attract U.S. and other international companies to setup in Ireland:
1. Low tax rates
Many foreign companies are attracted by the Republic of Ireland’s stable corporate tax rate of 12.5%. Businesses locating here also benefit from a comprehensive tax treaty network providing tax treaties with 72 countries. Companies interested in research and development can avail of a ‘knowledge box’ which provides a 6.5% tax rate on the R&D the company carries out in the Republic of Ireland.
2. Access to the European and global markets
The Republic of Ireland has benefited tremendously from EU membership since it acceded on 1 January 1973. From the modern motorway system linking Dublin to every major settlement in the country (except, notably, the north west of the country) to the national broadband plan, nearly every national infrastructure project over the last number of years has been significantly funded by the EU.
One of the main benefits of Ireland’s EU membership and adoption of the euro currency is that companies based in the Republic of Ireland have unlimited access to a single market of 508 million European consumers. In other words, locating your company here means you have a gateway to enter and serve the European market.
The Republic of Ireland is also geographically close to Europe. Dublin and Shannon airports offer daily flights to a number of European and world destinations so your staff can easily visit your customers or other European offices.
3. Regulations and ease of doing business
Incorporating a new company is the Republic of Ireland is fairly easy and quick. It usually takes around 10 days from filing completed documentation and the process does not involve too much ‘red tape’. Acquiring real estate is also relatively straightforward compared to other European jurisdictions.
For technology companies that deal in personal data, the Irish Data Protection Commissioner, in my experience, usually adopts a collaborative approach towards businesses based here. Unlike some European privacy regulators, the Irish regulator focuses on forward looking compliance and mediated outcomes to complaints and investigations.
4. Skilled workforce and professional services ecosystem
The Republic of Ireland is home to a number of good Universities that can offer business wanting to locate and setup in Ireland a steady stream of skilled English speaking graduate and post-graduate workers. The fair and flexible employment laws and stable labour costs also attract international companies to Ireland.
The Irish professional services sector that has grown up around technology companies in the last 15 – 20 years is well versed in assisting companies who choose to set-up operations in Ireland. They have become experts in helping these companies maxmimise their tax efficiencies, hire talented staff, and comply with applicable laws and regulations.
5. Common law and English speaking
Irish laws are rooted in English common law, which generally makes the legal system here more flexible and less prescriptive than the civil law system that most of Europe uses. In addition, many of the legal concepts used in contracts will be familiar to US and other foreign investors.
Even though its Constitution describes Irish as the national language of the Republic of Ireland, English is the dominant language. English is also the language that the IDA advertises in its marketing material when ‘selling’ Ireland to foreign companies.
Taken together, these factors mean that if the UK leaves the EU, Ireland can market itself at the only English speaking, common law jurisdiction with access to the EU single market.
Invest and setup in Ireland: right place, right time?
It is hard to pinpoint a single reason why in post Brexit Ireland so many companies want to invest and setup in Ireland. All of the factors discussed above work together. They mean that, in the wake of Brexit, there is no better time to make the Republic of Ireland the destination for your company’s operations in Europe.
If you have any questions in relation to investing or locating your business in the Republic of Ireland please contact me.
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