Ireland is the fastest growing economy in Europe today. It is amazing to think. That this is true after so many years of being a struggling nation and people. Forced to pay high taxes in order to keep the economy from collapsing. All that has changed since we joined the EC. A lot of people can now enjoy the high standards of living and many overseas company are now coming over to invest here because of our superior workforce and education system among others. We will look at what Ireland has to offer, some facts about the country, what makes companies come over to invest and what regulations and laws are applicable. Also we will look at the other information that is necessary.
Population of Ireland is approximately 3.6 million people. More than a third of that live in the Dublin area.
Language: English is the main language but Gaelic is learned in schools but only. Spoken in the remote parts of Ireland.
Currency: Irish Pound ( IR) IR 1 = US$1.36
The Republic of Ireland has been a free state since 1922 after winning independence from the UK. The Irish legal system is based on its constitution, domestic legislation and common law. Increasingly, the commercial law is being modified to conform to the directives of the EC of which Ireland is a member.
The president of Ireland is the Head of State and is directly of popular vote for a term of 7 years. The president’s role is primarily ceremonial although the president must sign all legislation into law. Political power is held mainly by the Prime Minister ( Taoiseach ) and the Parliament. The political system is considered stable with no wide policy changes between various administrators. There are 6 political parties in Ireland: Finna Fail, Fine Gael, and the Progressive Democrats are generally considered right-of-center maintaining conservative policies while the Labour Party, Democratic Left, and the Worker’s Party are considered left of center.
The country has natural resources of gas, lead, zinc and peat. The Irish economy is small, open and highly depependent upon international trade. A lot of American companies set up in Ireland and Ireland depends a lot on that. If American companies do bad on the stock exchange, then it can affect the Irish economy.
The entry of Ireland into the EC in 1973 was a significant event to promote the industrialisation of the country. Foreign firms especially Americans found that setting up a manufacturing base in Ireland behind the EC “tariff wall’ to avoid custom charges, provided a duty-free access to the Western European markets and also a skilled work force.
Ireland has prospered by offering investors a stable, profitable, English-speaking base to serve the European market and beyond. As a result, the ratio of trade to GDP rose by more than 50 percentage points in the 1990s. That ratio – 160 percent in 1998 – is one of the highest among all the members of the OECD. Ireland has experienced five straight years of stunning economic performance and today is a world leader in a number of aspects of economic performance.
No other OECD member country has been able to match its outstanding outcomes in a variety of dimensions. Output growth has averaged over 9% per year on a GDP basis in the period 1994-1998. Half of that growth has been reflected in considerable employment gains and the rest in impressive labour productivity growth. There have been substantial increases in the labour force, thanks to Ireland’s particularly favourable demographics and to an important reversal in migration flows. Unemployment has fallen by nearly 9 percentage points to 6.4%. Consumer Price Inflation has remained below 2% over the past year, despite the economic boom. (Source: OECD Economic Surveys – Ireland, June 1999)
Over 1,200 companies invest in Ireland as their base to serve the Eiuropean market and beyond. Here, these companies find a favourable tax environment, competitive operating costs and a productive and flexible workforce. Thses factors together ensure the highest reurns on investment for companies choosing to do business in Ireland. We will look at some of the factors and others that determine why companies set up here.
- Taxation: Ireland offers one of the most beneficial corporate tax environments in the world. Profits derived from eligble manufacturing and qualifying services are subject to tax rate of 10% until December 2002. From 1 January 2003, a corporation tax rate of 12.5% will apply to trading profits in all sectors.
- Education: Ireland has one of the best education systems in the world. Almost 1 million people are in full time education. 60% of the school leavers go on to 3rd level education. ( College )
- Labour Costs: Ireland has a competitive wage environment. The cost of employment in Ireland is among the lowest in Europe. A series of wage agreements between employers and employees ensures that wge inflation is low.
- Quality People: One of the reasons why so companies choose Ireland is because of its unique workforce – Ireland has the youngest population in Europe with over 40% under the age of 25 years. They are also so highly motivated and educated.
Foreign invetors consider the quality and the ‘can do’ flexible attitude of Irish investors to be two of the country’s greatest advantages. Ireland is the second largest exporter of software in the world, after the United States. The top 10 independent software companies in the world have significant operations in Ireland and today over 40% of all PC package software sold in Europe is produced here. The software industry in Ireland consists of 550 companies employing more than 15,000 people. Over 120 overseas software companies use their operation in Ireland to carry out a broad range of activities including core software development, product customization, software testing and fulfillment.
The software that is being developed in Ireland has a range of applications in mobile communications, electronics, engineering, enterprise resource planning, database management, banking and insurance solutions and Internet security systems for example. Consultancy service and systems integration companies use Ireland as a base to support international business clients in design development, customisation and implementation of total business systems and products. An increasing number of companies are also providing technical support to customers worldwide via toll-free call centres located in Ireland. A number of software companies in Ireland some of which originated as small start up companies, are today leading their markets with innovative middleware and Internet solutions.
With its success in attracting IT companies, Ireland has proved its ability to provide skills to match the needs of industry in a changing environment. Government, education and industry work closely together to ensure that the required number of IT professionals with the relevant skills are available to meet the needs of the software industry. College enrolment and graduate output in computer related disciplines is increasing in line with expected. A strong, high quality support structure has developed to meet the growing needs of software companies in Ireland. Almost all these support companies are accredited to the highest international standards, such as ISO 9000.
Services include translation and localisation, disk and CD ROM manufacture, DVD mastering and duplication, user manual printing, packaging, turnkey and fulfilment services and technical support. The costs of operating in Ireland, including employment costs, are lower than in most other European countries. This advantage is enhanced by a more productive and flexible workforce. Energetic partnerships exist between universities and industry. Researchers in Ireland are to the fore in work on neural networks, datacoms, imaging and multimedia technologies, for example.
Ireland is a member of the EU and all border controls between member countries have been eliminated. This created the Single Market which allows duty free importation of goods from other EU countries. Goods imported outside the EU are subject to customs duty at the appropriate rate specified by the EU’s Common Customs Tariff. The rate of duty is based on the international Harmonised System. The EU has preferential tariff agreements with certain countries and country groupings which will result in the rates being reduced or eliminated.
Ireland is a common law country and its laws governing business reflect that background.. As an active member of the EU, efforts to harmonise laws within member states have resulted in the introduction of domestic law based on EU requirements. From a legal perspective Ireland is a very open economy. There are no unusual restrictions or regulations placed on overseas business who wish to establish a business in Ireland, except certain specific industries who may require special licenses or clearances. Companies planning to invest in Ireland face little bureaucracy. The legal procedure for setting up a business are uncomplicated, inexpensive and quick. Overseas companies have wide flexibility to structure their investments in whatever way best suits their requirements, the principal determining factors being tax treatment, both locally and globally, disclosure regultions and funding requirments.
