by Eoin Sheehy - 2nd February 2018

 

Perched on the edge of Western Europe, meeting the full force of the mighty Atlantic Ocean, Ireland has never been a go-to destination to lap up the sun and sip rosé by the pool.

People don’t flock here for the weather. They come here to do business.

To understand why companies are increasingly present in the Irish capital, we first have to understand Ireland’s incredible economic transformation that began in earnest in the early 1990s. Once dubbed “the poorest of the rich” by the Economist Magazine in 1988, Ireland emerged from the 1980s in economic despair - a decade plagued by stagnant growth, record emigration and double-digit unemployment.

It was then that the Irish government decided to harness the full potential of the Industrial Development Authority (IDA), the agency responsible for attracting foreign direct investment (FDI) to these shores. Having already enticed the likes of Apple, Intel, Microsoft and PepsiCo throughout the 1980s, Ireland launched a charm offensive of international promotion and policy changes to kick start the economy and bring Ireland into the new millennium. There are four facets to this economic transformation.

  1. Corporate tax rate. Ireland currently holds a 12.5% corporate rate on all profits and gains made. This is the lowest rate in the EU region with only Bulgaria offering a more competitive rate of 10%. The corporate tax rate has been the subject of much controversy across Europe with calls to bring it in line with its European counterparts – the European average is 26%. However, the government has not relented, have ensured its preservation and, in fact, continue to view it as a key differentiating factor in retaining and attracting industry.
  1. EU Membership. In a post-Brexit world, Ireland is unique as an English-speaking EU member state. This will help further differentiate Ireland, particularly for British and North American multi-nationals looking for restriction-free access to the European Single Market.
  1. Legal system: The legal system in Ireland is broadly similar to that of the UK and US. Additionally, for Intellectual Property (IP) Ireland offers an ideal location for an organisation’s IP, often an organisation’s most valuable asset.
  1. Workforce: Due to an affordable higher education system, Ireland has the second highest percentage (43%) of university graduates in the EU. This makes for a well-rounded, educated, flexible, international and multilingual workforce.

These broad policy changes bore fruit! Beginning in the mid-1990s, Ireland entered an economically transformative period that led to full roar of the so-called ‘Celtic Tiger’ phenomenon - both famed and envied globally in equal measure.

As a result, Ireland is now the EMEA HQ for companies such as Pfizer, Google, Apple, Facebook, Johnson & Johnson Salesforce, LinkedIn, and IBM. Furthermore, 9 of the top 10 global ICT companies, 8 of the top 10 pharmaceutical companies and 50% world’s leading financial services firms are based here.

The unprecedented level of growth came undone in spectacular fashion as The Great Recession of 2008 – 2012 devastated the Irish economy harking back to the heady days of the 1980s.

However, Ireland as it always has, demonstrated grit and resilience during these trying times.

Requiring a €85m bailout in 2010, the government quickly established The National Recovery Plan of 2010 -2014 leading to an equally spectacular economic recovery. This turnaround gave Forbes magazine reason to name Ireland as the best country to do business for 2014. In 2017, Ireland stands in fourth position.

However, whilst Ireland has attracted predominantly high tech industries, it had lagged behind in becoming a powerhouse for the financial services industry.

Since the Brexit vote, Ireland has been promoting itself, alongside Frankfurt, Amsterdam and Luxembourg, as a prime location for banks to relocate their operations to.

As a result, JP Morgan, Barclays, Citigroup and Bank of America Merrill Lynch have chosen Dublin to move part of their operations to after Article 50 was triggered, over concerns they won’t be able to conduct business throughout Europe once the UK leaves the EU.

Whilst the Irish have their own domestic concerns, the favourable economic, social and political conditions together with the pro- business attitude of the Irish government makes Ireland a great place in which to do business.

Having established a base in Dublin in 2017, JDX Consulting are keen to enter the Irish market confident in the fact they could transfer the skillset and ‘can-do’ attitude that JDX consultants offer their clients across the globe.

 

References

[1] Department of Education and Skills. 2016. Education at a Glance OECD Indicators 2016. [ONLINE] Available at: https://www.education.ie/en/Publications/Statistics/International-Statistical-Reports/Education-at-a-Glance-OECD-Indicators-2016-Briefing-Note.pdf

[2] Taxfoundation.org. 2016. Corporate Income Tax Rates around the World, 2016. [ONLINE] Available at: https://taxfoundation.org/corporate-income-tax-rates-around-world-2016.

[3] Forbes. 2013. Ireland Heads Forbes’ List Of The Best Countries For Business. [ONLINE] Available at: https://www.forbes.com/sites/kurtbadenhausen/2013/12/04/ireland-heads-forbes-list-of-the-best-countries-for-business/#31f01a812f03.