The Emerald Isle is internationally renowned for a number of things: beautiful countryside, wonderful people, and plentiful beer. What’s perhaps less well known - or at least less well appreciated - is the country’s strength as a business destination. When it comes to attracting and supporting innovative, productive businesses, Ireland really is the jewel in Europe’s crown.
Until recently, the UK was considered a prime destination for many businesses looking to gain a foothold in the European market. But Brexit has thrown these plans into uncertain waters, and made many firms currently in the UK reconsider their position. If you’re looking to relocate or expand to the EU, here are a few reasons why setting up a company in Ireland should be the obvious choice.
Businesses looking to enter Europe or establish European headquarters have historically looked to the UK. London has held a prestige value for large businesses, while smaller ones have been attracted by simple regulations and a competitive tax rate. Brexit has changed this: while we don’t know exactly how it will turn out, it’s becoming clear that the UK will lose many of the benefits currently afforded to businesses.
EU passporting rights for example currently allow UK-based financial services firms - including foreign firms in London - to trade with the rest of Europe. After Brexit, these firms won’t be allowed to carry out many of their vital services from their London base. Data sharing may also be impacted, with terms currently under negotiation as part of the wider Brexit deal. Businesses will also lose out on free movement of EU labour for skilled jobs, although restrictions on global talent may be eased.
With the EU constituting the world’s second largest economy by GDP, any impediment to trade is a major issue for both native businesses and those looking to base themselves in the UK.
Exporters are currently benefiting from a cheap Pound, but importing resources has become more expensive. More importantly, the UK will lose both tariff-free access to EU countries and the benefits of EU free trade agreements, which reduce tariffs and non-tariff barriers (such as differing products standards) between the EU and other nations.
Simply put, the government will have to establish new trade agreements with every country it wishes to trade with - a process that can take nearly a decade - or else accept the harsher tariffs imposed by the World Trade Organisation. It will become more expensive to import goods or resources for manufacturing, and more expensive to sell abroad.
Ireland will not suffer from any of these issues. People setting up a company in Ireland will continue to benefit from the ease of trading both within and outside of the bloc, retaining ‘front of the queue’ access to the world’s most prominent markets. Irish businesses can continue to benefit from unfettered movement of skilled and unskilled labour, as well as EU specific investments, including almost 32 billion euros in R&D and creative media funding.
Proximity to the UK
The relationship between Ireland and the UK is a storied one, to say the least. For our purposes however, all you need to know is that they are distinct entities, and that only the UK has voted to leave the European Union. This means that Ireland will be both the only native English-speaking country in the EU after Brexit, and the only one to share a land border with a UK territory.
While the UK is likely to take a hit after Brexit, it still remains one of the world’s leading economies, and among the world’s most developed consumer markets, particularly for eCommerce. Base your business in Ireland, and you will receive all of the benefits of EU membership, while still staying in close proximity to the world’s 4th largest market.
While the relationship between Ireland and Northern Ireland is yet to be finalised, it is thought that some barriers to trade and travel may be eased, in order to prevent people and businesses from becoming ‘stranded’. Setting up a company in Ireland could position you perfectly for post-Brexit business, with Ireland becoming an even more key European partner to the UK.
While the UK has stolen the spotlight, Ireland had already been building a reputation for business friendliness. The startup process is extremely similar to the UK, while business laws have been updated much more recently. The result is a system that’s fast, streamlined, and extremely favourable to small businesses and international conglomerates alike.
According to the World Bank’s 2018 Doing Business report, Ireland is the 8th best country for starting a business in the world. This means setting up a company in Ireland is easier than anywhere else in Europe, ranking ahead of 2nd place Estonia and 3rd place UK. Ireland has also been the fastest growing nation in the EU since 2014, and has attracted over 700 U.S. businesses to date, representing more than $300bn in investment.
Ireland is also an extremely favourable destination for tax purposes. At 12.5%, its corporate tax rate is among the lowest in Europe, ranking 7% below the UK and 2.5% below Germany. If all of your business is conducted outside Ireland, you are also eligible for a complete tax deduction on this foreign income. If you do also conduct business in Ireland, the country has enacted 73 double taxation treaties, preventing you from being taxed twice on most foreign income. As a result, Ireland is the 4th most favourable country in the world for paying taxes.
These amenable conditions mean Ireland has become a major hub for data centres, tech campuses and various European headquarters. Foreign companies with a major Irish presence include Microsoft, Facebook, Google, Dell, Oracle, Dropbox, Intel, Pfizer and Johnson & Johnson. There are so many big tech firms on Dublin’s riverfront that the area has been dubbed ‘Silicon Docks’.
It’s not just big businesses that are prospering, however. There are over 170 government supports for startups and SMEs in Ireland, including domestic grant money. SMEs still account for 99% of all businesses in Ireland, and form the backbone of an economy which grew by a staggering 26.3% in 2015. GNP rose by 11.9% in December 2017 - a more modest figure, but still a hearty recommendation for the Irish economy.
Place and people
There are plenty of practical reasons for setting up a company in Ireland, then, but there’s one more underrated factor: it’s also a great place to live. As well as beautiful cities, Ireland is home to bountiful countryside, and boasts more reasonable living costs than London. It’s no less suited to the logistics of businesses, either, with multiple international airports, deepwater docks, and a reliable road network.
Europe is full of favourable destinations for starting or expanding a business, particularly now that the Eurozone as a whole has started to flourish. But even before Brexit, and even with the continued strength of Germany and France, Europe has a new contender for businesses large and small. In practical, logistical and financial terms, setting up a company in Ireland is pretty hard to beat.
For help with opening an Irish business bank account or how to register a business name or address in Ireland or any other issues regarding company incorporation in Ireland including VAT & taxes, please contact us on 0033 (0)1 53 57 49 10 or email us from our contact page.
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