HLB Sheehan Quinn, International Tax Partner Bruce Stanley reflects on the IDA's 2019 report and looks ahead to 2020.

The IDA has published results for its "Winning Foreign Direct Investment 2015-2019 Strategy" which confirmed the continued success of Ireland as location for foreign investment.

Employment figures in the multinational sector reached an all-time high of 245,096, which represents more than 10% of all jobs in the country. 2019 saw 250 investments made with 21,844 jobs created by FDI companies.

Minister for Business, Enterprise & Innovation, Heather Humphreys TD said: “2019 was another very positive year for foreign direct investment in this country. The record level of employment represents a strong vote of confidence in our economy by international investors. It demonstrates too that Ireland’s economic strengths – particularly our first-class workforce and pro-enterprise policy environment – remain highly attractive to multinational companies.”

Martin Shanahan, CEO of IDA Ireland added: “Foreign Direct Investment continues to be a substantive driver of the economy. The benefit spread to the wider Irish economy can be seen in the expenditure by IDA clients which totalled €21.5 bn”

Capital expenditure by foreign companies continues to escalate and reached €5.9bn in the last 12 months, with the majority of spend in the Life Sciences and Technology.

Focused on FDI

Ireland’s accomplishments in FDI is truly remarkable. Stretching back to the very first multinational company to locate here - Henry Ford in 1917 - to being home to the European headquarters to the largest companies in the world in 2019, it is a success story of which we are very proud. Ireland ranks 1st in the world for inward investment by quality and value, 1st for flexibility and adaptability of people, 1st for investment incentives and is in the top 15 most innovate countries in the world.

The low corporate tax rate of 12.5% grabs headlines internationally, and is symptomatic of the country’s pro-business approach. The infrastructure, talent pool (Europe’s youngest workforce and one of the most highly educated), track record, high quality of life and support network all contribute significantly to the continued investment.

Brexit – The Positive Impact

IDA Ireland has had close to 90 individual Brexit-related investments with over 5,500 associated jobs approved since the UK’s EU referendum in June 2016. There are others where it was one of a number of considerations in choosing Ireland as a location to invest.

Post Brexit, Ireland’s economic and political stability, along with a continued commitment to the EU, is a core part of Ireland’s value proposition to foreign investors. As companies seek Brexit solutions that will impose the lowest possible additional costs and the least possible disruption to trade, Ireland offers a base from which to sustain access to the Single Market, to minimise uncertainty and to grow their business.

Dublin remains the most popular choice for financial services firms to relocate post-Brexit, with 28 firms having committed to relocating staff or operations to the Irish capital since the Referendum. Dublin is closely followed by Frankfurt (21), Luxembourg (19) and Paris (18).

2020 Outlook

Much of the success in the competitive world of attracting FDI has been down to long term strategic planning with a clear focus. That drive is one matter on which all Irish governments over the past 30 years have agreed upon as being a sine qau non for Irish economic success.

This has enabled the country to create a package that attracts world-class inward investment. Challenges such as Brexit and BEPs are at the forefront of policy decisions. All the pieces are in place to ensure that Ireland continues to be a market leader for FDI. As existing companies increase their investment in operations (intel received the green light for a $4bn plant within the last 2 months, Facebook announced 5,000 jobs at their new headquarters) and new entrants are constantly arriving, Ireland looks well placed to maintain and expand on the past success.

Bruce Stanley is International Tax Partner at HLB Sheehan Quinn. A Fellow of Chartered Accountants Ireland, an AITI Chartered Tax Advisor CTA and a Trust & Estate Practitioner, Bruce has 20 years' experience in practice across all tax heads, specialising in corporate structuring for international business entrepreneurs and owner-managed businesses.

If you are considering expansion to the European market through Ireland, speak to Bruce and our advisory team today.

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