IRELAND: Useful Info

Ireland and Britain share a long history and culture, and until this century, even the same king. The country only gained independence from London in the early 1920’s, after many years of violence and unrest. Though relations were strained for several years, the two countries have closely worked together to form a mutually beneficial relationship—which was formalised in the Good Friday Agreement on the future of Northern Ireland in 1998.

The end of the political crisis opens new doors to British firms who wish to do business in what can easily be considered a “sister state”. Investment opportunities are also great, with the UK being the country’s third largest investor after the USA and Germany.

Ireland has made great strides since it joined the European Community in 1973, developing its agricultural society into a modern, technologically-enabled Tiger economy.

Quick Facts

Population: 4 million (Source: UN, 2004)
Capital: Dublin
Area: 70,182 sq km (27,097 sq miles)
Major languages: English, Irish
Monetary unit: 1 Euro = 100 cents
Main exports: Machinery and equipment, chemicals, foodstuffs
GNI per capita: US $34,280 (World Bank, 2005)

Economic Background

Ireland is a small market, but large in potential. Its GDP figures indicate strong economic growth—3.7% in 2003, 5.6% in 2004, and 5.7% forecasted for 2005 and all indicators point to a pick up in world trade and exports.

Ireland also has a very young population, with almost a third falling between 25 to 44 years old. This is a strong consumer base, and there is high demand for products and services from the UK. In fact, it is the only major world market where the UK is the dominant supplier—particularly in clothing and footwear as well as building materials. Ireland is the UK’s fourth largest export market.

The country has also positioned itself as a “knowledge economy” which can use information in a quick, flexible and creative way. It has invested heavily in public and private higher education, increasing its spending by 10% in the last decade (more than triple the average amount of other EU countries). This technical skill, coupled by the flexible and hardworking attitude of the Irish people, makes them some of the most productive work forces in the European Union.

The Irish government has also worked to create a favourable economic and fiscal environment for potential investors. It has one of the world’s best corporate tax environments; since January 2003, a tax rate of 12.5% is applied to all trading profits. Companies engaged in Research and Development Activities in the European Economic Area are also given a 20% tax credit in addition to a tax deduction of 10% to 12.5%. This gives a potential tax write-off of 32.5% for incremental R&D. Other laws create exemptions from stamp duties for the transfer of Intellectual Property and exemptions from capital gains tax.

This favorable business environment has turned the country into a the hub of the European Operations of many multinationals such as Pfizer, Kelloggs, and Google, who have transferred financial shared services, marketing and administrative functions to their Ireland offices.

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