For over 50 years, companies originating from the USA have been key investors in Ireland. Today, almost 100,000 people are directly employed in over 600 US firms in Ireland including Intel, Hewlett Packard, Boston Scientific, Dell, Pfizer, Citi, Bank of America Merrill Lynch, Medtronic, Google, Johnson & Johnson, Facebook, LinkedIn, Abbot and PayPal. US investment currently represents 70% of foreign direct investment employment in Ireland and stands greater than the combined figure of US investment into China, Russia, India and Brazil.
Ireland is an attractive location for US companies primarily for 3 reasons:
- Tax
- Talent
- Gateway to Europe
Tax
Ireland has a business-friendly, common law, corporate tax system, which is in line with OECD norms. Its low corporate tax rate of 12.5% on trading profits provides the basis for companies to structure trading and holding company operations in Ireland, which, with appropriate planning, can provide an effective tax solution for many US multi-nationals.
Ireland also has a very beneficial Intellectual Property (“IP”) regime, which facilitates the application of the 12.5% corporate tax rate to profits from the exploitation of IP in Ireland. Furthermore, to help develop and sustain the Irish knowledge based economy, and to encourage companies which develop, own and exploit their IP from an Irish base, capital allowances are available for capital expenditure incurred on the creation and acquisition of “specified intangible assets”, including the acquisition of IP.
Ireland has also been the jurisdiction of choice for many companies which have been “migrating”, which has added more legitimacy to their tax status, whilst maintaining a low tax bill.
Ireland is a favourable platform for investment into China due to a combination of the Ireland / China Double Tax Treaty and the Irish holding company regime.
Talent
Ireland boasts a young, hi-tech, skilled and English-speaking workforce. Ireland also remains a vibrant and attractive place for younger workers within the EU, ensuring the pool of talent for investing companies is deep. Ireland is positioning itself as a “Smart economy” and given the problem-solving skills and creative and innovative thinking of its workforce, this will be achieved. The US companies already operating in Ireland have ensured that large clusters of innovation excellence in ICT, life sciences, pharmaceuticals, New Media, and other sectors, are already in existence.
Gateway to Europe
One of Ireland's key strengths and biggest opportunities is Europe. Global corporations based in Ireland can effectively reach Europe's 600 million consumers with excellent goods and services developed and built in Ireland by Irish workers.
“William Fry was instrumental in guiding us through all aspects of the complex transaction and due diligence. The expertise include Irish law, government contracting, tax, property, bank restructurings, real estate/leasing as well as general advice on the Irish business culture….Overall, the service provided by William Fry was excellent. At all times they approached matters with professionalism and with UPMC’s best interest……Our business objective was successfully completed. It would have been impossible without the counsel of William Fry. It was well worth the investment spend…..
(David Farner, Senior Vice President and Chief of Staff, UPMC)