Starting a Business in Ireland
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Why Start A Business In Ireland?
With an economy expanding at a consistent rate above the European Union (EU) average, Ireland is one of the most favoured locations for business in Europe. This can be seen by the fact that nearly 1,400 companies from all over the world have chosen Ireland as their base to do business. Over the last twenty years, Ireland has invited investment from a wide range of business sectors, including electronics and engineering, pharmaceuticals and healthcare products, computer software, financial services, and a range of internationally traded services.
The unceasing success of Ireland as an investment nation has been based on the positive commitment of successive Irish governments to the development of businesses. This commitment has created a favourable tax environment, competitive operating costs, a productive, well-educated and versatile workforce, and a well-developed infrastructure with outstanding support services.
The expeditious rate of development and industrialisation in recent decades has been due, quite overwhelmingly, to policies initiated to make Ireland an attractive environment for foreign investment. Companies based in Ireland have success not only throughout, but globally too. Ireland is acknowledged as having a secure economy that has enjoyed record levels of output growth. The country is well known for its brilliant quality of life, sanitary environment, and open and supportive relationship with businesspeople.
Economic policy is generally directed towards the establishment of a sound economic environment that is attentive to the needs of business. Recently, Ireland's economic growth rates have been consistently among the highest of the OECD (Organisation of Economic Cooperation and Development) countries.
How is the climate?
Ireland's climate is generally mild and temperatures are consistent throughout the country. The coldest months are January and February, with average daily temperatures between 4C and 7C. Like the UK, July and August are the warmest months (14C to 16C). Ireland's location off the west coast of Europe, with high annual rainfall and prevailing winds from the South, contributes to the high quality of its environment.
What is the population?
The population of Ireland is roughly 4.68 million. Including citizens of Northern Ireland, the population is just over 6 million.
What is the currency and exchange rate?
Ireland, like the rest of the European Union, uses the Euro.
What is the time difference?
There is no time difference in Ireland. It is on GMT.
What are the languages of Ireland?
Two languages are spoken in Ireland: English and Irish (Gaelic). During the time of British control, Irish fell out of use except in parts of western Ireland. In 1922 the government sought to re-establish Irish as an active language throughout the country. However, English remains the language most in use.
Ireland is a small, contemporary economy with growth averaging 6%. Agriculture, once its most valuable sector, is now overshadowed by industry and services.
The exports sector is dominated by foreign multinationals. However, it remains a key component of Ireland's economy, and construction has most recently propelled economic growth along with strong consumer expenditure and business investment.
A consequence of its small size, the Irish economy is highly dependent on foreign trade. A population of four million offers restricted opportunity for industrial expansion based on the domestic market. Furthermore, a drought of natural resources means the importation of fuels, raw materials and other fundaments are a necessity. Despite this, the value of exports has exceeded imports since the 80s and exports now account for three quarters of national output.
Ireland's business attitude, today, stems from resolutions made in the mid-1950s to achieve economic expansion by fostering export-based industries. Subsequent governments have, indeed, nurtured these policies and have placed an encouraging emphasis on inward investment.
Ireland is the only English speaking member of the EU, offering an enviable gateway to trading in the EU without exchange-rate risk. Simultaneously, this also lets companies take advantage of all the benefits it has to offer as a business location.
Government promotional agencies have targeted specific areas of industry, in particular those which produce sophisticated and high-value added products and services. These also offer the best growth potential and the best prospects of generating long-term sustainable employment. The targeted sectors are:
- Chemicals and pharmaceuticals/ biopharmaceuticals
- Information and communications technology
- Internationally traded services, including financial services, call centres and shared services centres
- Medical devices
- UK Trade Investment website highlights that sectors that are particularly attractive, also, are:
- Energy - market deregulation
- Environment - upgrading to EU standards
- Food and drink - specialist foods, etc
- Healthcare - to coincide with an increase in government spending
- Transport - various opportunities in a 34 billion Euro, ten-year infrastructure project
- Ireland's main commodity exports are:
- Machinery and equipment
- Live animals
- Animal products
- And their primary commodity imports are:
- Data processing equipment
- Other machinery and equipment
- Petroleum and petroleum products,
Are there any government incentives?
Ireland is an abiding member of the EU, offering businesspeople ready access to a market of over 455 million people; one of the largest markets on Earth. Despite Ireland's geographical location on the west border of Europe, the well-developed infrastructure combined with competitive operating costs, low corporate taxes and financial incentives make it one of the most lucrative places in Europe for foreign investment.
The country has also used tax measures as a way of accommodating the creation and expansion of home-grown and alien businesses. Indeed, the taxation policy for businesses is currently being changed from an incentive regime to a single low-rate. Following discussions with the European Commission, Ireland has a single low-rate tax on trading income of 12.5%. This rate applies to income from all business activity and creates many new opportunities for foreign businesses that may not otherwise have met the criteria for a low-rate of tax.
Incentives available to inward investors consist of tax incentives and financial aid. Financial assistance - commonly in the form of grants - is administered by various government agencies, each with its own area of specific interest. The availability and level of assistance mostly depends on the geographical location of the venture and is defined by both Irish and EU legislation. The largest grants available are on the border, midlands and western regions of Ireland.
Other contributing factors are the activities that will be carried out in Ireland, and in particular the skill level of the people that will be employed.
IDA is the top government agency responsible for the promotion of foreign direct investment into Ireland and the development of the existing foreign companies. The IDA's portfolio includes an impressive 1,100 overseas companies, which employ approximately 130,000 people directly. Over half of these businesses have resided in Ireland for more than a decade and two-fifths for over two decades. IDA Ireland has its base in Dublin and maintains other offices in various countries across the globe.
Grants are available for manufacturing and internationally traded services. Generally, the IDA can provide much monetary assistance for new business, including capital and employment grants. Also available is capital toward investment in research and development facilities and other training initiatives.
Labour and workforce
Labour costs in Ireland are among the most competitive in the western world. With such increase in the economy, recruitment is slowly becoming problematic.
However, there is an efficient recruitment sector and many specific agencies for all sectors (including admin and secretarial). There is a drought of skilled staff in some sectors (predominantly in electronics and information technology). The Irish government has introduced various programs to increase the number of skilled workers in these sectors.
Local labour costs are generally similar to the United Kingdom. Keep in mind, however, there is a currency distinction.
The national minimum wage is 9.80 Euros per hour.
Ireland has one of the longest average industrial working weeks in Europe (40 hours including overtime) and, because of fewer public holidays, the longest working year. There are nine public holidays which, when added to average holidays of four weeks, gives total non-working days of 29. This compares with the European average of 36 days.
As aforementioned, the Irish government recognises the importance of inward investment as a provider of high quality employment. It has, therefore, invested sufficient resources to recognise potential skill shortages and provide a business-conscious education and training system .There are strong connections between industry and educational establishments, and further education is geared toward the future necessities of Ireland's business sector.
Contract of employment
A contract of employment in Ireland does not need to be written. However, the employer must provide the employee with a written statement of the terms and conditions of employment. This must set out minimum information as specified under the Terms of Employment Act. Additionally, this must be within two months from the start of employment.
How can I get my goods to the market?
Air - Ireland's transport infrastructure strives to offer rapid, efficient and cost-effective access to international markets. With exports accounting for three-quarters of national output, Ireland has had to develop a highly reliable distribution network; making its European market accessible within hours. Central features of the infrastructure are:
- Three international airports located in Dublin, Shannon and Cork, plus regional airports at Donegal, Galway, Kerry, Knock, Sligo, and Waterford
- Frequent air services from the airports make most European locations accessible within two or three hours
Road and rail - The motorway system is in constant improvement. The railway network connects all the major cities and ports of Ireland.
Sea ports - Numerous ports, most having roll-on/roll-off facilities; the major ports are Dublin, Cork, Rosslare and Waterford. Shipping times to Europe are cut by travelling via the United Kingdom land bridge. Versatile work ethic in the transport sector and frequent night sailing ensure the utmost time efficiency.
What can you tell me about advertising?
The predominant advertising outlets are:
- The Press
- Outdoor ads - billboards, etc.
Ireland has roughly 60 newspapers and 150 periodicals or trade magazines. Media from the is also very popular and widely circulated.
Any other regulations I should know about?
Environmental issues - Environmentalism is an admirable concern of the Irish government, and the EU as a whole. Additional to its innate value and contribution to quality of life, a clean environment is acknowledged as a vital economic factor. It is of particular importance in the development of natural resource-based industries and tourism and in the overseas marketing of products and services.
Legislation to protect the environment is closely modelled on EU directives, overseeing matters such as planning and building regulations, public safety, and the issue of pollution control licences. This legislation is implemented predominantly by local authorities and by the Environmental Protection Agency (EPA).
This is a government body responsible for monitoring and licensing those industrial operations that are prone to environmental pollution.
Organisations that can assist with Starting a Business
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PEO Worldwide is an international PEO offering employer of record, payroll, employee benefits management, HR and compliance services throughout the world.
More Group is an international accounting firm specialising in tax accounting, business incorporation, and trustee services. Contact us today to book your free initial consultation.
IrishCompany.EU is an outsourced and a referral facility in Ireland facilitating and advising companies and non-resident directors who want to incorporate in Ireland and move their operations from abroad into Ireland. Our team has extensive knowledge in corporate structures and cover compliance for any company formation for directors within and outside of EEA.