Statistical and Qualitative Data Don’t Lie: Starting Business in Ireland Is The Way To Go
The Irish people are famous for consuming mountains of beer and potatoes, and sure do love a chirpy cheerful life. They adore the thought of celebrating, and you know why? Obviously, there’s so much to merry-go-round for in this country. Ireland has a comfortable distance next to powerhouses like the United Kingdom and France. This means this nation is pretty much a cultural, historical and a business haven for Europeans. Adding to the border advantage is the versatile produce you can find from their lands and seas. This opens further possibilities for foreigners in starting business in Ireland.
Ireland has a strong reputation for yielding fascinating foreign direct investments. Explaining further, this nation ranks 17 in the World Bank’s Ease of Doing Business Index in 2017. You’d expect that this country is the top producer for booze and chips, but that’s actually not the case. In fact, here are top 10 Irish exports in 2017:
- Pharmaceuticals: US$38.2 billion (28.3% of total exports)
- Organic chemicals: $23.8 billion (17.7%)
- Optical, technical, medical apparatus: $13.8 billion (10.2%)
- Electrical machinery, equipment: $9 billion (6.7%)
- Perfumes, cosmetics: $8.4 billion (6.2%)
- Machinery including computers: $7.4 billion (5.5%)
- Aircraft and spacecraft: $4.8 billion (3.5%)
- Other chemical goods: $3.7 billion (2.8%)
- Meat: $3.5 billion (2.6%)
- Dairy, eggs, honey: $2.7 billion (2%)
There are more factors contributing to Ireland’s business feasibility. These include:
- Access to the European Union single market
- Knowledgeable and English-speaking labor force,
- Competitive corporate tax rate,
- Well-constructed legal system
- Solid regulatory system
This information is surely lucrative. However, you need to be aware of the country’s overall background before you march forward.
Starting Business in Ireland: Knowing Its Economic Standing
Ireland has been one of Europe’s fastest rising economies since 2014. It’s showing promising financial growth over the last 5 years with a GDP growth of 7.8% in 2017. The government projects a 5.6% further increase in 2018.
Meanwhile, the labor department is looking bright as well. Following its economic recovery, the nation has managed to reduce the unemployment rate from 15% to just over 6%.
However, most economists look at the employment rate as a more accurate economic trend indicator because of the large FDI inflows that can skew GDP. The exchequer deficit has risen as well by €0.3 billion and estimated to reach €2.3 billion by 2018. This is due to improvements in capital investment.
When you’re starting business in Ireland with a humanitarian mindset, then you’re in great shape. In June 2014, the Irish government developed and implemented the UN Guiding Principles on Business and Human Rights. This serves as a yardstick and guidance for Irish companies on strengthening human rights in the workforce.
Further, the UN Human Rights Commission carried out a Universal Periodic Review (UPR) of Ireland’s human rights record in 2016. This process highlights the steps on how to fulfill human rights responsibilities and improves the current situation in every aspect of humanity. Ireland has willingly conformed to the UN by identifying its human rights priorities for the country such as:
- Eradicating, or at least, lessening homelessness
- Constructing more non-sectarian educational institutions
- Abolishing hate crimes by reviewing legislation
- Making a national action plan on illegal trafficking
- Refining the early years for childhood
- Possibly introducing paternity leave
- Strategizing on how to effectively reduce discriminatory pay and eliminate gender systems
Even a toddler would agree that violence does not do anything but inflict harm on others. Regardless of the means, terrorism is definitely a cruel approach in getting a point across. Sadly, there’s still a heightened level of viciousness almost everywhere in the world. It ranges from usual mobs to mass shootings, and even terrorist attacks. While Ireland is usually a joyous country, it’s still vulnerable to these outbreaks.
You should be vigilant at all times. Many of these occurrences are actually undiscerning, ideally for radical beliefs. Public places are a common target, so this could threaten your business and most importantly, your lives.
Intellectual Property (IP)
The Irish government takes IP rights seriously. You need to take note of this, especially when you’re starting a business in Ireland. The nation has an IP protection available to companies and individuals. This security encompasses principal forms like trademarks, designs, patents, and copyright.
Unfortunately, Ireland’s IP law, particularly for patent protection, doesn’t synchronize with EU’s legislation. You will need to check the Irish Patents Office for details on intellectual property in Ireland.
Ireland enjoys an all-time low of 12.5% corporate tax rate which applies to trade income. It’s one of the most favorable onshore legal tax rates in the world. On the other hand, non-trading or passive income has a tax rate of 25%, which is still decent. The law considers that passive income sources include:
- investment income
- rental profits
- net revenue from overseas trading
- income from certain land transactions
- oil, gas, and mineral extractions
The degree of any company’s liability to Ireland’s tax rate depends on its tax residence. For instance, Irish resident corporations are legally responsible for tax on their global income and capital gains. Usually, a company has a tax residence in Ireland if its central administration and control is located or incorporated in the country.
In contrast, non-resident companies in Ireland with an Irish branch are liable to corporate tax:
- On profits related to the business of that branch
- On any capital gain from the clearance, removal, or disposal of used assets
- Non-resident Irish companies that don’t have a branch in Ireland shall be liable to:
- Taxes on any source of income generated within Ireland
- Capital gains tax from clearance, removal, or disposal of specified Irish assets
Face Challenges Confidently When Starting Business in Ireland
Just like in any country, starting business in Ireland is not as glamorous and jubilant as you think. Of course, you will be facing trials along the way. The nation has a strong and diverse domestic market, which gives way for more entrants and competitors. Also, depending on your nature of the company, starting business in Ireland can cost quite a fortune.
Regardless, don’t let these tradeoffs drive your enthusiasm away. As long as you partner with a local business service provider, there’s no need to worry as they can get the job done for you. 3E Accounting has an outstanding team of experts who will advise you patently and comprehensively.
When treading your path to success, never do it blindly. It’s more practical to seek help from local professionals than to suffer from losses in the long run due to poor judgment. If you’re starting business in Ireland now, contact us ASAP and you’re guaranteed to get undivided attention.