Ireland: Investing

FDI in Figures

According to the 2011 World Investment Report published by the UNCTAD, Ireland currently ranks 13th among the world's largest FDI receivers. The structure of FDI has undergone through a transformation, the low value-added activities have been reduced to the profit of R & D and upscale services (engineering, information and communications technologies, pharmaceutical products, medical technology). After having obtained a strong backward flow in 2008 under the effects of the global recession, the FDI picked up again but it still remains weak. Some of the appealing assets of the country are an attractive fiscal and legal frame, a high-skilled and multi-cultural work force and a strong relationship with the United States. However, the country's appeal has been strongly deteriorated by the international crisis and the country has to affront a declining competitiveness.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	-20,030	25,960	26,330
FDI Stock (million USD)	168,332	247,446	247,097
Performance Index*, Ranking on 141 Economies	141	11	-
Potential Index**, Ranking on 141 Economies	20	-	-
Number of Greenfield Investments***	183	176	-
FDI Inwards (in % of GFCF****)	-34.8	7.1	-
FDI Stock (in % of GDP)	61.9	85.1	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2010, in %
Luxembourg	14.0
Netherlands	12.9
UK	12.9
USA	7.6
France	7.4
Germany	5.1
Canada	4.3
Italy	3.8
Switzerland	3.6

Main Invested Sectors	2010, in %
Financial intermediation	29.6
IT	8.9
Insurance services	6.2

Source: Central Statistics Office - Last Available Data.

Main Foreign Companies: Intel, Yahoo, Adobe, Apple, etc.
Sources of Statistics: Industrial Development Agency Ireland

Why You Should Choose to Invest in Ireland

Strong Points: Ireland's strong points are:
- A strong and thick industrial and tertiary fabric;
- The lowest corporation tax rate in Europe;
- A young and skilled workforce;
- A competitive economy; and
- Developed infrastructures.
Weak Points: Ireland's weak points are:
- A limited domestic market;
- Growing labor costs.
Government Measures to Motivate or Restrict FDI: For years, the Irish Government actively promoted foreign direct investment (FDI). Ireland provided an attractive taxation framework to foreign investors, by having one of the lowest taxation rates in the European Union. This strategy has fueled a robust economic growth since the late 1990s.
More recently, the Government has focused on Ireland’s international competitiveness by encouraging companies with foreign investments to increase their research and development (R&D) activities and to provide goods and services with higher added value. Nevertheless, the crisis has considerably impacted the country's appeal in terms of FDI. In effect, investors fear long term vulnerability of the Irish economy and a worsening of the unemployment level.

Several state organizations promote investment inflow:
- The Industrial Development Authority of Ireland (IDA);
- Enterprise Ireland;
- Udaras na Gaeltachta.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Ireland: More informations on www.bilaterals.org
Organizations Offering Their Assistance in Case of Disagreement: WTO , World Trade Organization
Member of the Multilateral Investment Guarantee Agency: Yes

Country Comparison For the Protection of Investors

	Ireland	OECD	الولايات المتحدة	Germany
Index of Transaction Transparency*	10.0	6.0	7.0	5.0
Index of Manager’s Responsibility**	6.0	5.2	9.0	5.0
Index of Shareholders’ Power***	9.0	6.8	9.0	5.0
Index of Investor Protection****	8.3	6.0	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Guaranteed.
Acquisition of Holdings: Authorized, except for some sectors of activity.
Obligation to Declare: Please consult the Industrial Development Agency of Ireland (IDA) website.
Competent Organization For the Declaration: IDA
Requests For Specific Authorizations: Potential investors are also required to examine the environmental impact of the proposed project and to meet with Irish Environmental Protection Agency (EPA) officials.

Office Real Estate and Land Ownership

The Possibility of Buying Land and Industrial and Commercial Buildings: Citizens of countries other than Ireland and other EU member states can acquire land for private residential purposes and for industrial purposes. Under Section 45 of the Land Act, 1965, all non-EU nationals must obtain the written consent of the Land Commission before acquiring an interest in agricultural land, though there are many stud farms and racing facilities in Ireland that are owned by foreign nationals. There are no restrictions on the acquisition of urban land.
Risk of Expropriation: Private property is normally expropriated only for public purposes in a non-discriminatory manner and in accordance with established principles of international law. State condemnations of private property are carried out in accordance with recognized principles of due process.

Investment Aid

Forms of Aid

Ireland retains significant scope to grant investment aid under a new Regional Aid Map approved by the European Commission for the period 2007-2013. Further information on the website of the Department of enterprise, trade and employment.

Privileged Domains

The Border Midlands and West Region are classified as “economic development regions” and qualified for regional aid throughout 2007-2013. The South East sub-region (Wexford, Waterford, Kilkenny, Carlow and Tipperary South) is also qualified for regional aid throughout 2007-2013 on the basis of unemployment criteria specified by the European Commission.

Privileged Geographical Zones

Consult the list of privileged geographical zones on the website of enterprise, trade and employment.

Free Zones

The Shannon duty-free Processing Zone: companies operating in the Shannon Free Zone are entitled to the following benefits: goods imported from non-EU countries for storage, handling or processing are duty-free; no duty on goods exported from Shannon to non- EU countries; no time limit on disposal of goods held duty-free; minimum customs documentation and formalities; no Value Added Tax (VAT) on imported goods, including capital equipment; choice of having import duty on non-EU product calculated on its landing value or selling-out price.
Foreign-owned firms in the Shannon Free Zone have the same investment opportunities as indigenous Irish companies. Duty-free exemptions are available also to companies operating in Ireland's major deepwater port at Ringaskiddy in County Cork..

Organizations Which Finance

The European Regional Development Fund IDA Ireland

Investment Opportunities

The Key Sectors of the National Economy: Household and Consumer Goods; Drugs and Pharmaceuticals; Electrical Power Systems; Building Products, Franchising, Medical Equipment, Computer Software, Agricultural Sector.
High Potential Sectors: Advanced manufacturing projects in the ICT, Pharmaceuticals and Biopharmaceuticals, Medical Technologies, Engineering and Consumer Products sectors.
High value Internationally Traded Services sectors in Software, Shared Services and Customer Support activities
Privatization Programs: Ireland does not have a formal privatization program, but the Government privatized in September 2005 the state-owned national airline, Aer Lingus.
Tenders, Projects and Public Procurement: Etenders, Irish Public Tenders
Tenders Info, Tenders in Ireland
Ted - Tenders Electronic daily, Business opportunities in EU 27

Sectors Where Investment Opportunities Are Fewer

Sectors in Decline: Net export contribution has declined due to some sector-specific issues (chemicals, ICT), the general deterioration in cost competitiveness in recent years and the strong Irish domestic demand. Since the Irish economy is not as diversified as large economies it is therefore particularly exposed to external risks.

Finding Assistance For Further Information

Investment Aid Agency: Arthur Cox (corporate and business law, expertise in mergers, acquisitions and corporate finance).
KPMG
Other Useful Resources: Industrial Development Agency of Ireland
Department of Enterprise, Trade and Investment, Northern Ireland
Doing Business Guides: Department on Enterprise, Trade and Employment
Ireland Commercial Guide 2010 - Buy USA

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