FDI Sees Ireland Through Covid and Brexit, Solidifying its Reputation as a European Base for Multinational Corporations
Company Bureau Formations
29 March, 2021
It is no secret that Ireland's tech industry has grown quickly over the last decade thanks to Foreign Direct Investment (FDI). This Investment has helped to bolster Ireland's economy despite the threats of Brexit and a global pandemic.
The Republic of Ireland is now the only predominantly English-speaking country offering access and free trade to the single market as full a European Union Member State. Ireland continues to attract start-ups and large multi-nationals with its vibrant business landscape, favourable tax incentives, and qualified talent pool. Tech giants such as Google, Facebook, Slack, and Dropbox have European headquarters based in Dublin.
FDI in Ireland Remains Strong During Worldwide Pandemic
Despite a year of uncertainty and continuing challenges, Ireland's economy grew by 3% in 2020. According to the European Commission, it was the only EU economy to grow last year. Ireland's economic growth was supported by its reputation as a stable and reliable location for global investors. Inevitably, job losses were higher in 2020 as many local businesses struggled to continue operations during the lockdown and ongoing restrictions. However, some sectors were stable during this time; it has been reported that there were fewer job losses in Life Sciences and Technology. Many companies in these industries were able to increase their operations in response to the demand for Covid-related products.
IDA Ireland announced 246 new Foreign Direct Investments in Ireland in 2020. This was an impressive outcome, and only down slightly from the 250 investments in 2019. In 2020, the incoming investment accounted for the creation of 20,123 new jobs, helping to bolster Ireland's economy. The US was a major player with 67% of the investments coming from companies based in North America, the highest number on record and up 63% in 2019.
Brexit Pushes Businesses to Ireland
Now that Brexit is complete, Ireland has been dealt a slice of good fortune as it is now the main predominantly English-speaking country remaining in the European Union. Additionally, the corporate tax rate in the UK is set to rise from 19% to 25% from 2023, twice that of 12.5% in the Republic of Ireland. Many UK and multinational businesses are now registering Irish companies to maintain operations and cross-border trade with the EU while benefiting from the favourable tax environment. Amazon recently announced plans to open its first Irish fulfilment centre west of Dublin. Currently, the majority of Amazon orders for Irish customers are being shipped from the UK. Having an Irish base will allow Amazon sellers to bypass shipping delays and additional tariff charges brought on by Brexit.
Ireland Welcomes Multinational Corporations
Ireland continues to show its commitment to maintaining a welcoming business environment in which national and international businesses can thrive. IDA Ireland has announced the new stategy 'Driving Recovery and Sustainable Growth 2021-2024'. Over the next four years, the plan aims to bring in 800 new international investments and create 50,000 new jobs, 50% of which are to be in regional locations. The strategy targets leading multinational corporations operating in several industries such as autonomous vehicles, cell and gene therapy, Artificial Intelligence, and Big Data. IDA Ireland is responsible for delivering 19 purpose-built property solutions in regional locations to support incoming regional investment.
Over the coming years, Company Bureau looks forward to assisting many more multinational companies with establishing their operations here in Ireland. Please visit our website for more information about Starting an Irish Company for Non-Residents or contact us today! One of our qualified team members will be happy to assist you.
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