The global business landscape constantly evolves, and companies always look for new markets. One such promising market is Ireland. Over 1,000 multinational companies have expanded and even headquartered in the Emerald Isle in the past decade.
This decade of growth has increased digital transactions and the Irish internet economy, almost more than €20 billion in value on Stripe alone. So the big question is, why are so many companies moving to Ireland?
Ireland has been ranked as one of the best countries for business. Ireland also stands out in Western Europe for innovation. Ireland has consistently ranked in the top 30 in the Global Innovation Index.
Curious about start-up companies, technology companies or IT companies in Ireland? More importantly, how are these companies setting up an entity in the European market, specifically Ireland? For startup owners, you may even be wondering how incorporating a company in Ireland works. As a job seeker, you may wonder, is Ireland a good country to work in?
Ireland has become a hotbed for global expansion with its robust economy, skilled workforce, and strategic location.
In this blog, we’ll glance over the why and how. Then, we’ll dive into the work culture, strategic moves by global companies expanding into the Irish market, and how they have leveraged their global presence to succeed in this new territory.
Ireland's appeal as a destination for global expansion is multifaceted. The country boasts a strong economy, with a GDP growth rate consistently outperforming the European average. It also has a young, educated workforce, with over half of the population under 35 and a high percentage holding a tertiary degree. What are Ireland’s other key advantages?
Ireland's geographical location is a gateway between Europe and North America. This makes it an attractive hub for global companies. Its membership in the European Union also provides access to a market of over 440 million consumers – the largest single open market in the world.
According to a recent Economist Intelligence Unit report, 46% of respondents highlighted access to European markets as the key competitive advantage of doing business in Ireland. Companies prioritize Ireland's strategic location over other advantages, such as access to local talent and a low corporate tax rate.
Brexit has complicated things for the European Union (EU). It has raised questions like can UK companies hire EU citizens post-Brexit and how?
Nonetheless, it has also opened new opportunities for English-speaking EU countries like Ireland. Ireland and Malta are now the EU’s only two official English-speaking countries. With English as the primary and official language of business, Ireland is attracting companies from the US and beyond because there is no language barrier.
Furthermore, due to Brexit, London is no longer the de-facto European financial capital. Consequently, many global companies have moved headquarters from the UK to Dublin. The Irish finance sector, in particular, has taken advantage of Brexit.
Between 2016 and 2021, Dublin welcomed nearly 135 finance companies, including Barclays and JP Morgan. This made up about a quarter of all Brexit-related moves. Europe’s Lowest Corporation Tax Rate
Ireland lowered its corporation tax rate to 12.5% in 2003, which remains the same today. This corporation tax rate is the second lowest in Europe, making Ireland a great place for businesses looking to sell. Did you know, Hungary has the lowest corporate tax rate at 9%.
This rate is below the average of 21.7% among European countries in the Organization for Economic Co-operation and Development (OECD). The low corporation tax rate makes Ireland desirable for global companies looking for a cost-efficient operations base in Europe.
The following businesses are among many global companies with production facilities, research and development centers, or administrative offices in Ireland:
Ireland has tax treaties with several strong markets worldwide, including the United States, United Kingdom, China, Japan, Australia, and Canada. In addition to European markets, international and Irish companies have access to other markets beyond the European continent.
Ireland also offers a 25% research and development tax credit. This is why many pharmaceutical companies have made the move to Ireland. Recently, Ireland introduced the Knowledge Development Box (KBD), which offers more corporation tax relief.Companies that qualify for KDB get a 50% tax deduction on income earned from assets as a result of research and development in hopes that companies will continue to reinvest in Ireland.
Altogether, the Irish tax environment is beneficial to global organizations. Low corporation tax is a big reason why companies are moving to Ireland.
Over years of experience in attracting international companies, Ireland has created ideal conditions for innovation to take place and to move talent to Ireland. First of all, Irish law protects intellectual property rights well. The Irish Trade Marks Act 1996 and the Copyright and Related Rights Act 2000 are considered best-in-class and even better than many other EU members.
The Irish government has also made it easier for companies to acquire, develop, and license intellectual property (IP). Ireland's history of serving as a base for overseas companies and talent makes it easy for foreign businesses and talent to move and work in Ireland on work visas.
The Employment Permit issued by Ireland’s Department of Enterprise, Trade, and Employment (DETE) is the most common pathway to employment visas in Ireland.
To apply for a visa, you must apply at least three months before arriving in Ireland. Fees must be paid, and applicants must provide supporting documents in either English or Irish. Supporting documents include:
Ireland is known internationally for its strong workforce. The country's education system encourages talent development for multinational corporations, such as tech and medicine. Many universities and colleges have started AI or tech programs in recent years. Some have partnered with companies such as Trinity College and Huawei. Other institutions, like University College Cork and Tyndall National Institute, have recently launched accelerator programs for Irish startups. On top of this, many university graduates from other parts of Europe and the world have also come to Ireland in search of job opportunities, especially if they have studied fields related to tech or medicine. Over 32,000 international students are studying at Irish universities. Companies get to tap into European and international talent in Ireland.
Ireland's skilled workforce has the skills to compete in the digital world, especially in AI and IT. Facebook, Google, LinkedIn, Microsoft, and many other global tech companies have established a European base in Ireland because of its strong talent pool.
Several global companies have made strategic moves to establish a presence in the Irish market. These companies have leveraged their global presence and adopted unique strategies to succeed in Ireland.
Tech companies like Google, Facebook, and Apple have established significant operations in Ireland. They have leveraged the country's favorable corporate tax rates and its pool of skilled tech workers to expand their global presence.
Google, for instance, has its European headquarters in Dublin, employing over 8,000 people. Facebook has also invested heavily in Ireland, with its international headquarters located in Dublin. Apple has also been in Ireland since the 1980s and employs over 6,000 people in its Cork facility.
Ireland is also home to many global pharmaceutical companies. Companies like Pfizer, Johnson & Johnson, and Novartis have leveraged Ireland's robust life sciences sector and skilled workforce to establish significant operations there.
Pfizer, for instance, has been in Ireland for over 50 years and employs over 3,500 people across six sites. Johnson & Johnson employs over 3,000 people in Ireland, while Novartis has a strong presence with over 1,500 employees.
To establish a base or a separate legal entity in Ireland, you need stakeholders (director, company secretary, and shareholders), a legal address in Ireland, share capital, and a company name. Depending on the size of your company and whether shares are public, you may need a partner in Ireland.
The most common type of company registered is private company limited. Many tech and pharmaceutical companies are private companies. To apply to register your business name online, you have to use the CRO’s search facility to check whether your business name is already used by someone else. This is free of charge. Then, you must register and receive a certificate of registration. This business name must be shown on all business letters.
After this, draft, complete, and submit Form A1 and a constitution (also known as Memorandum and Articles of Association, MoA) to the Companies Registration Office (CRO) in Ireland. Applicants should also have these other supporting documents:
All applicants must pay a fee of €50. Once approved, companies must also register for tax. Taxes for international and Irish companies include corporation tax, value-added tax (VAT), employers PAYE, and relevant contracts tax (RCT).
Then, the final steps are to open a corporate bank account and appoint directors, company secretaries, and shareholders. The number of shareholders may be limited to 99. Furthermore, subsidiaries must set up payroll and ensure compliance with employment and taxes.
There are many benefits to setting up an Irish subsidiary. Here are a few examples worth considering:
Parent companies can maintain more control over their Irish subsidiaries. These branches must report to the parent company and involve the parent company in all its decisions. The policies and culture of the parent company will also be easy to implement since they wrote the MoA.
There is minimal set-up costs. The amount of corporation tax relief the parent company will receive also offsets any financial and time costs involved in setting up.
This is often the simplest and safest way for a company to expand its brand into a foreign country and explore new markets. Other company types require more regulation, documentation, and compliance measures.
When setting up a subsidiary, you could also explore other business structures in Ireland, such as public limited companies, companies limited by guarantee, and designated activity companies.
The strategic moves by these global companies highlight the potential of the Irish market. These companies have established successful operations in Ireland by leveraging their global presence and adopting unique strategies.
The Irish market presents a unique opportunity for global expansion. With its strong economy, skilled workforce, and strategic location, Ireland is an attractive destination for global companies looking to expand their reach.
The strategic moves by global companies into Ireland serve as a testament to the country's potential as a hub for global business.
As more companies look to expand their global presence, Ireland is likely to continue attracting significant foreign investment. Looking to pull off this strategic move?
Expand to Ireland with Borderless. Incorporating your company in Ireland can be time-consuming. If you’re looking for a quick and compliant move, you should work with an Employer of Record (EOR).
Borderless AI enables businesses to compliantly hire and manage talent worldwide without establishing a foreign entity. We alleviate the complexities and risks associated with hiring global employees with zero deposits, dedicated in-house support, and AI-powered global employment law resources.
We’ll handle the behind-the-scenes and extra admin while you focus on scaling and growing. Speak with us today.
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