Is Ireland Losing its Competitive Edge?
With her low Corporation Tax rate of 12.5%, it is well-documented that Ireland has enjoyed impressive growth largely as a result of foreign direct investment. However, in the aftermath of Brexit, the U.K. have reiterated their plans to cut their Corporation Tax rate to 17% by 2020. In the U.S.A., the President-Elect has stated he will seek to reduce their Corporation Tax rate to 15%. So, is Ireland’s competitive edge under threat?
We spoke to a number of leaders in financial services companies within our client base and asked them what they thought. In addition to the advantage brought by the low Corporation Tax rate, it became clear that a number of other factors remain vital. There were many factors but the following were the most frequently stated:
Freedom of Services Trading
The ease of trading within the EEA continues to be a major attraction to Globals, who need to have a European Headquarters to ensure they service their Pan-European client base and maintain/increase European revenue streams. Smaller operations also enjoy the benefits of passporting into the EEA, from a service hub based in Ireland.
Ireland has the youngest population in Europe, with about one third of the population aged under 25. Our universities and colleges continue to adapt and develop programmes which provide knowledge relevant to the roles provided by companies who have relocated here. For example, we have seen major changes to how information technology, finance, business, engineering and life sciences skills and knowledge are taught and qualified. As well as home-grown specialists, we continue to attract skilled practitioners from all over Europe and beyond, including many Irish ex-pats who are now returning home to take advantage of Ireland’s prosperity.
English Speaking Country with many other Languages Spoken
The world is a global village and while English is still the first language of business, companies need diverse language skills to ensure they can manage and develop their global client relationships. Our universities have increased the number of Degree and Masters courses (for example) in business studies taught through foreign languages, and we continue to attract quality talent from non-English-speaking countries.
Favourable Regulatory Regime
Ireland has a transparent and open regulatory regime for Financial Services, which is broadly well-balanced between ease of trade and protection of the consumer. This is particularly attractive to companies emanating from overly-cumbersome regimes, where the cost of labour-intensive regulatory compliance often threatens business viability.
Best Golf in the World
Okay, that’s the opinion of a few of our clients (!), but everyone we spoke with said the overall good quality of life here was a major factor in their choosing Ireland and continues to be important to them as they seek to attract talent.
The general consensus was that Ireland continues to enjoy a market-leading competitive edge, particularly for companies who have relocated here. It remains to be seen how the fallout from Brexit and the U.S. election will pan out, but Ireland remains well-positioned to take advantage of any opportunities that arise.
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