Irish Investment in the US Has Increased Tenfold in the Last Decade
Investing in Ireland
Over 1,050 overseas companies have chosen to invest in Ireland as their European base and are involved in a wide range of business activities in sectors as diverse as e-Business, engineering, information communications technologies, pharmaceuticals, medical technologies, financial and international services.
A Young, Well-Educated and Productive Workforce.
One of the reasons why so many companies choose Ireland is because of the unique workforce - Ireland has the youngest population in Europe with over 40% under the age of 25 years. Ireland's unique population and age structure that has fuelled much of Ireland's recent prosperity will continue for the next 15 years with a key focus on education and research in Ireland.
In a study of demographic trends, economists at NCB Stockbrokers forecast that projected population declines across much of Europe meant Ireland's already strong economy would look even more attractive in a European context over the next decade. The population of the Republic will grow by 30% to over 5.3 million by 2020 and to six million by 2050.
The population between the ages of 15 and 64 will rise by 700,000 in the next 15 years. Sustained strong growth in the labor supply will maintain a capacity for growth in Ireland that will far outstrip that in other EU countries where the demographic outlook is much less favorable the report states.
Tax in Ireland
The overall tax burden in Ireland is the lowest among all other EU member states. A focus of Ireland's strategy to attract investment is to create a favorable economic and fiscal environment, which is supportive of industry. This is evidenced by various investment incentives that are in place, creating a unique business opportunity in Ireland.
- One of the most beneficial corporate tax environments in the world. A corporation tax rate of 12.5% applies to all corporate trading profits.
- Tax credits for incremental expenditure on Research and Development.
- A favorable holding company regime.
- Double taxation agreements with 45 countries.
Corporate Tax Rate in Ireland
The corporate tax regime in Ireland combined with competitive operating costs and availability of highly skilled labor continues to provide investors with a uniquely high return on their investment. The corporate tax rate in Ireland is 12.5%. Corporation tax is charged on the profits of a company. "Profits" for corporation tax purposes consist of income (business or trading income comprising active income, and investment income comprising passive income) and capital gains. Capital gains arise on the disposal of capital assets.
Ireland operates a classical system of company taxation. Under this system, tax payable on corporate dividends is independent of the tax paid by the company paying the dividend and no credit is available to shareholders for tax paid at the corporate level. A company resident in Ireland for tax purposes is subject to corporation tax on its world-wide income. With some exceptions, a company incorporated in Ireland is automatically considered to be Irish tax resident. A company is also considered to be Irish tax resident if it is managed and controlled in Ireland.
Ireland's educational system has reflected, benefited from and reinforced some important cultural characteristics: creativity, flexibility, agility, nimbleness, pragmatism and informality. The education system in Ireland is one of the best in the world according to the 2006 independent IMD World Competitiveness Report. Almost 1 million people are in full time education.
Ideas and knowledge have transformed business and industry and have been crucial in the development of the Irish economy. The Irish Government's economic policies are directed towards the creation of a stable economic environment that is supportive of the needs of business. Ireland's economic growth rates in recent years have consistently been among the highest of the OECD countries.
The forces of growth are firmly rooted in Ireland's economy, through favorable demographics, increasing investments in education and a high rate of technology-oriented investments.
Ireland is a small, open, trade-dependent economy and is one of the fastest growing economies in the developed world. Its openness is reflected both in the international mobility of its labor and capital reflected by strong migrationary flows and high levels of foreign direct investment.
Its high level of external trade is signaled by a high share of combined exports and imports of goods to GDP that was just under 150% in 2004.
In recent decades, the Irish economy has transformed from being agrarian and traditional manufacturing based to one increasingly based on the high technology and internationally traded service sectors. In 2004, the services sector accounted for 66% of employment in Ireland, industry for 28% and agriculture for 6%.
(Industrial Development Agency) is an Irish Government agency with responsibility for securing new investment from overseas in manufacturing and internationally traded services sectors. It also encourages existing investors to expand and develop their businesses. If you would like further information about investing in Ireland go to www.ida.ie