Quite often, they speak of the choice of company formation in Ireland as an endless tax haven. However, the choice of business jurisdiction is more than tax optimisation opportunities. Apart from tax reliefs and incentives, there’s a bigger story to be told about Ireland as an entrepreneur-friendly destination.
In this blog post, we’re shining light on the Irish business environment. We’re analysing the ease of doing business in the country in terms of government and private support programs, accessibility of skilled workforce, legislation principles, and the ability to cover a vast customer pool.
So can Ireland keep a competitive edge as a business-friendly environment? Let’s see!
Government and Private Incentives
From starting, running, and growing, a range of funds, grants, and other types of financial support are available to businesses in Ireland.
Local Enterprise Office
The local enterprise office provides advice, information, and financial assistance for entrepreneurs, early-stage promoters, startups and small businesses looking to expand. Their financial assistance scheme is available to starting and growing businesses in the manufacturing and services sectors eligible for the following criteria:
Priming Grant: for businesses trading <18 months
Business Expansion Grant: for businesses trading >18 months
Feasibility/Innovation Grant: to help promoters with researching market demand of the product and testing its sustainability
Trading Online Voucher Scheme: to assist small businesses with less than 10 employees to trade online and reach new markets.
Strategic Banking Corporation of Ireland (SBCI)
SBCI was founded in 2014 to avail of both national and international funding for making low-cost long-term credit available to Irish SMEs. SBCI provides funding schemes for businesses involved in the following activities
Future Growth Loan Scheme: for small and mid-cap companies engaged in agriculture or fishing
Leasing and Hire Purchase: flexible funding schemes for assets such as cars and commercial vehicles.
Energy Efficiency Loan Scheme: a funding scheme for primary producers, investing in the energy efficiency of their enterprises.
Term Loans: low-cost flexible loans dedicated to start-ups and micro-enterprises
Innovation Tax Credits
Innovation tax credit or R&D (research and development) tax credit is designed to encourage investment by Irish companies in a variety of science and technology areas. These typically include software development, engineering, medical devices, beverage production, pharmaceuticals, agriculture, and horticulture.
R&D tax credit operates by giving companies within the charge of Corporate Tax in Ireland up to 25% of their qualifying R&D expenditure in cash or as a tax credit. It can also be used to reduce the company’s CT obligations.
Access to Knowledge
Knowledge Transfer Ireland (KTI) is a national office that helps local businesses benefit from access to a wide pool of Irish talent and expertise by making it easier to connect with a local research base. The research base consists of universities, institutes of technology and research centres – all places where you can reach out to the talent needed.
Register a Company in Ireland to Access EU Market
As a member of the EEA, Ireland is part of a single market meaning that all goods and services produced by local companies can be traded from one EU country to another without barriers.
The free movement of financial products and services is known as “passporting”. There are two forms of passporting: “passporting in” and “passporting out” that differ by country of authorisation and the target country.
“Passporting in” is when a firm obtains authorisation from another EEA country (or in some cases from a country outside EEA) to provide financial goods and services in Ireland. Consequently, passporting out is the process of obtaining authorisation from the Central Bank of Ireland to sell financial goods and services in any EEA country.
Access to Talent
The Irish workforce is young, multilingual, and educated, while Ireland has always enjoyed a reputation of excellence in education. After Brexit, Ireland became the only English-speaking EU member state. This fact, alongside a high level of the educational system and one of the highest happiness index, makes Ireland a magnet for professionals worldwide.
Besides, as a director of an Irish company, you’re free to hire local talent or turn to outstaffing (engaging a workforce from abroad). Outstaffing is an excellent method to arbitrate business expenses since talents from a few popular outstaffing destinations typically charge lower hourly rates than employees in Ireland.
Irish Workforce Economic Output
Economic output is the total value of all goods and services produced in an economy. It is a common tool to determine whether the economy is growing or contracting by comparing the data between two different points in time. GDP (Gross Domestic Product) is the primary measure used today to measure national economic output. This is the market value of all goods and services produced by labour and property located in a particular country.
The World Bank put Ireland number 25 country by GDP in the world. So what does it mean for you as you register a company in Ireland? A strong economy changes the game for entrepreneurs serving for their establishment, growth, and expansion. Additional benefits include higher incomes, enhanced infrastructure and technology, lower interest rates by the World Bank, and stable and slow inflation.
Ease of Doing Business
Ireland is an established, tested, and trusted jurisdiction for setting up a regular company and SPV (Special Purpose Vehicle) as well. In fact, in 2021, IMD World Competitiveness Yearbook put Ireland 13th out of 64 countries for economic competitiveness. Ireland’s business-friendly environment is also validated by 23rd place worldwide according to the U.S. News Best Counties 2021 report.
Apart from a trustworthy reputation, Ireland has a business-friendly GMT zone. Irish business hours overlap with the business hours of other European countries with only a one-hour difference.
Principles of Common Law
Ireland shares a common legal heritage with the United Kingdom. Common law is one of the main sources of Irish law. It’s more flexible, reactive, and responsive than parliamentary law. Here are a bunch of reasons to register a company in a country whose legislation runs on principles of Common Law:
- Clear Legal System: a common law system provides a clear and predictable set of rules, making it easier for businesses to understand and comply with the law.
- Access to Specialised Legal Services: specialised lawyers and legal services can help businesses understand and interpret complex laws and regulations.
- Flexible Contract Laws: common law systems provide a flexible framework for businesses to create contracts and agreements, such as employment contracts and leases.
- Efficient Court System: common law systems provide an efficient court system to resolve disputes quickly and cost-effectively.
- Clear Property Rights: common law systems provide straightforward and secure property rights, ensuring businesses can protect their investments.
- Predictable Regulatory Environment: common law systems provide a predictable regulatory environment, allowing businesses to plan for the future.
- Established Precedents: common law systems provide set precedents that can be used to interpret and understand the law.
H2: Wrapping Up: Why to Register a Company in Ireland
Company formation in Ireland is more than accessing a low-tax environment. Registering a company in Ireland means running a business in a state with a transparent and reactive legislation system, access to the European Union market, access to knowledge, educated and progressive workforce, and various tax encouragement for businesses involved in research and development spheres. If you want to receive all the perks of an Irish-based company, contact Chern & Co. Since 2009, we’ve been helping businesses of all sizes establish a presence in Ireland in the most efficient manner. Check out our registration packages for Irish residents. Do you reside outside Ireland? Contact our customer success manager to learn about your business opportunities with us!