Ireland continues to draw foreign investment for one particular reason: it's one of the best countries in the world to do business.
While there are a variety of reasons corporations decide to invest in Ireland, one of the biggest benefits is its corporate tax rate of 12.5 percent, which, according to KPMG, trails only Bulgaria and is well ahead of the U.S. corporate tax rate of 35 percent.
In addition, labor costs and cost of living are on the lower end of the EU and global scale, adding up to make Ireland a smart country to invest and grow in. It's why Apple continues to invest and expand in the country, having set up shop there in 1980. In fact, and to its cagey credit, Apple has reportedly operated almost tax-free in Ireland since it started operations there, succored by a government eager to bring jobs in. It has not, however, gone unnoticed by the EU, which earlier this year ruled that Apple must pay up to €13 billion in unpaid taxes.
At the time, Apple’s CFO Luca Maestri said of the matter, “We have an outstanding relationship over the years with the Irish Government and we are very committed to Ireland. We have recently made additional investments in the country, and our plans to invest in Ireland have not changed.”
That was made clear when, in August, Apple was given the green-light to build an €850 million data center in Co Galway.
Ireland, therefore, remains attractive to foreign direct investment for reasons such as outlined by Roberts Nathan: availability of skilled labor; taxes; reliefs available to staff assigned from abroad (the Special Assignee Relief Programme (SARP) provides relief from income tax on part of the income earned by employees who are assigned to work in Ireland); research and development tax credit (in Ireland, a company can avail of a 25-percent tax credit against their current year corporation tax liability. The credit available is available to those companies engaged in in-house qualifying research and development activities, including plant, machinery and buildings); attractive holding company regime; technology; and language.
Globally, Ireland is recognized as one of the best places to do business. In 2013, Forbes ranked Ireland as the top country to do business in, and in 2015, Ireland clocked in at No. 4 on the list, behind Denmark, New Zealand and Norway.
Real estate companies, too, have and are taking notice, via a robust transactions market in Ireland. The latest asset to be acquired by a foreign firm is The Temple Bar Hotel, in Dublin, which was acquired by Singapore-listed real estate company Ascott Limited for €55.1 million.
Ascott Limited's CEO, Lee Chee Koon, made it clear that one of the bigger reasons it made the acquisition was because of Ireland's pro-business-operating climate, which has attracted the likes of the aforementioned Apple, along with Google, Facebook, LinkedIn and Microsoft.
“Ireland is also used as a launch pad to the European Union by many U.S. companies and the U.S. is amongst Ascott’s top source markets globally," he said. “Ascott’s entry into Ireland will cater to this rising demand for accommodation by corporate and leisure travelers."
The first half of 2016 saw nearly €140-million worth of deals in Ireland, largely driven by activity outside Dublin, according to DTZ Sherry FitzGerald. And the good news is only expected to get better.
DTZ noted in the past how much Dublin needs new hotels and how appealing the market is for investors. With that in mind, deals in the sector worth more than €420 million are set to close before the year is out.
A robust transactions market and overall Ireland investment should continue as long as Ireland maintains its pro-business stance, something IDA Ireland, whose main objective is to encourage investment into Ireland by foreign-owned companies, is an obvious proponent of. In September, Martin Shanahan, CEO of IDA Ireland, talked about the importance of maintaining a pro-business environment in the nation amid European Union scrutiny of its tax laws.