KPMG: Ireland: Open for investment

OECD Observer Business brief
Managing Partner, KPMG in Ireland

©Shaun Murphy

"The start-up environment is exceptionally dynamic."


Ireland had the highest rate of economic growth in the EU in 2015. Strong exports, increasing employment and a highly attractive foreign direct investment (FDI) offering have helped the Irish economy stage a strong recovery writes Shaun Murphy, Managing Partner of KPMG Ireland.

The economic shocks experienced by Ireland following the 2007 crash were severe. A credit squeeze, increased personal taxation and reduced exchequer spending created significant economic and business challenges. Faced with a rebuilding of its economy and international reputation, the Irish government and other stakeholders successfully set about the task of restoring our credibility. In 2016, Ireland is expected to record the strongest GDP rate of growth in the EU and an unbroken pattern of inward investment has helped Ireland reaffirm its record of long term growth and stability.

Notwithstanding a number of challenging years, Ireland’s record of delivery as a first class destination for international investment was rarely if ever called into question–proof if it were needed of the underlying strengths of Ireland as a location of choice for foreign direct investment (FDI).

For government, the tasks involved in maintaining Ireland’s attraction for businesses of every type and size have been significant. Firstly, in the context of a pan-European debate about how best to get economies back on track, the Irish government successfully restored the country’s reputation with international creditors. The efforts of government and the effectiveness and reputation of the tax collection function of the Revenue Commissioners were fundamental–further reaffirming our national economic credentials.

Secondly, state agencies and IDA Ireland in particular continued to work to promote Ireland’s business appeal. The commercial focus of embassies and the leveraging of a well-connected diaspora have all played their part. The results have been impressive. IDA Ireland has reported a strong performance in 2015 with the creation of over 19 000 new jobs, the most ever recorded in the agency’s 67 year history. High performing sectors such as financial services, agribusinesses, pharma and technology, to name just a few, have reinforced Ireland’s position as an FDI hub.

This long-term attractiveness of Ireland as a secure and stable home for inward investment is evidenced by the facts. Over 1 200 companies from global giants to high-growth brands have chosen Ireland as their strategic European base. Intel recently marked its 25th anniversary in Ireland, with an accumulated investment in their Leixlip Campus near Dublin of US$12.5 billion. In 2015 Microsoft celebrated its 30th year in Ireland, while in 2014 Xilinx marked its 20th year here and Citi and Bristol Myers Squibb their 50th.

These stories of investment success speak for themselves and help promote a cycle of investment motivated and reassured by the Irish performance of these companies.

Total employment in FDI in Ireland now stands at almost 175 000 people, the highest level in the history of the IDA. In 2015 there were 213 investments, up from 197 in the previous year. According to the American Chamber of Commerce in Ireland, US companies have $204 billion in foreign direct investment in Ireland, representing 9% of all US investment in the EU and 4.5% worldwide.

Inevitably, the tax environment plays an important role in helping senior decision makers choose Ireland. We have a stable tax regime with an extensive tax treaty network. The main company taxation benefits of being headquartered here include a highly competitive 12.5% corporation tax rate for active trading businesses, an attractive research & development tax credit regime, and tax depreciation for capital expenditure on intellectual property (IP).

The start-up environment is also exceptionally dynamic. Forbes magazine recently listed Dublin as one of the top seven cities in the world for start-ups. Ireland has the youngest workforce in Europe with 40% of the population under 29 years old. Ireland’s education system ranks in the top ten in the world according to the IMD Competiveness Yearbook 2015, which also ranks Ireland first in the world for the availability of skills, openness to new ideas and flexibility and adaptability when faced with new challenges. Furthermore Ireland is undoubtedly an attractive destination for internationally mobile and skilled people. Quality of life indices regularly rank cities such as Dublin in the upper reaches of global league tables.

The Irish government has recognised the need for tax certainty to help maintain our inward investment track record. The 12.5% rate is established and is settled policy of all of Ireland’s major political parties, both in government and opposition. The level of social cohesion and political agreement about pro-business policies is striking. In an uncertain world, Ireland also shows an emphatic commitment to the EU, providing further reassurance to investors. In conclusion, there is no complacency about Ireland’s position as a location of choice for business and stakeholders remain focused on providing the most attractive mix of reasons to choose Ireland. 

Sponsored by 

www.kpmg.ie

©OECD Observer No 305 January 2016 




Economic data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Don't miss

  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • “Nizip” refugee camp visit
    July 2016: OECD Secretary-General Angel Gurría visits the “Nizip” refugee camp, situated between Gaziantep and the Turkish-Syrian border, accompanied by Turkey’s Deputy Prime Minister Mehmet Şimşek. The camp accommodates a small number of the 2.75 million Syrians currently registered in Turkey, mostly outside the camps. In his tour of the camp, Mr Gurría visits a school, speaks with refugees and gives a short interview.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • Queen Maxima of the Netherlands gives a speech next to Mexico's President Enrique Pena Nieto (not pictured) during the International Forum of Financial Inclusion at the National Palace in Mexico City, Mexico June 21, 2016.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • OECD Environment Director Simon Upton presented a talk at Imperial College London on 21 April 2016. With the world awash in surplus oil and prices languishing around US$40 per barrel, how can governments step up efforts to transform the world’s energy systems in line with the Paris Agreement?
  • Happy 10th birthday to Twitter. This 2008 OECD Observer interview with Henry Copeland said you’d do well.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Once migrants reach Europe, countries face integration challenge: OECD's Thomas Liebig speaks to NPR's Audie Cornish.

  • Message from the International Space Station to COP21

  • COP21 Will Get Agreement With Teeth: OECD Secretary-General Angel Gurría on Bloomberg

  • The carbon clock is ticking: OECD’s Gurría on CNBC

  • If we want to reach zero net emissions by the end of the century, we must align our policies for a low-carbon economy, put a price on carbon everywhere, spend less subsidising fossil fuels and invest more in clean energy. OECD at #COP21 – OECD statement for #COP21
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa. blogs.worldbank.org
  • Pole to Paris Project
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • How can cities fight climate change?
    Discover projects in Denmark, Canada, Australia, Japan and Mexico.
  • Climate: What's changed, what hasn't, what we can do about it.
    Lecture by OECD Secretary-General Angel Gurría, hosted by the London School of Economics and Aviva Investors in association with ClimateWise, London, UK, 3 July 2015.

  • Climate change: “We should not disagree when scientists tell us we have a window of opportunity–10-15 years–to turn this thing around” argues Senator Bernie Sanders.

  • In the long-run, the EU benefits from migration, says OECD Head of International Migration Division Jean-Christophe Dumont.
  • Is technological progress slowing down? Is it speeding up? At the OECD, we believe the research from our Future of ‪Productivity‬ project helps to resolve this paradox.
  • Is inequality bad for growth? That redistribution boosts economies is not established by the evidence says FT economics editor Chris Giles. Read more on www.ft.com.
  • Catherine Mann, OECD Chief Economist, explains on Bloomberg why "too much bank lending can slow economic growth".
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at www.oecd.org/careers .

Most Popular Articles

Poll

What issue are you most concerned about in 2016?

Unemployment
Euro crisis
International conflict
Global warming
Other

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2016