IRELAND
Ireland Cian McCourt and Lyndsey Falconer, A&L Goodbody
1. Overview of FDI in the jurisdiction
1.1. Which countries are the principal sources of FDI into your jurisdiction? The principal source of FDI into Ireland are the US, the UK and Germany. The US is, however, the largest investor in Ireland with approximately 50% of all FDI investment being American. As the only English speaking country in the eurozone, Ireland has been a beneficiary of US investment to the extent that the US has invested more than $165 billion in Ireland; this equates to more than the total invested in the BRIC [Brazil, Russia,India, Russia] countries combined.
While all of Europe experienced a decline in FDI in 2012, Ireland performed better than other countries, with a much smaller decline in FDI. As a result, Ireland increased its market share of FDI in Europe to 3.78%. Ireland’s performance reflects the growing stabilisation of the Irish economy and strong growth in repeat investments by existing investors, especially from the US.
In recent years, Ireland has also been targeting newer emerging countries such as the People’s Republic of China and India with frequent government trade missions to these jurisdictions and to other emerging markets. There are also signs that Chinese companies are placing larger projects in Ireland.
1.2. What are the key sectors in your jurisdiction which attract, or the government is seeking to attract, FDI? The Irish government is focused on high-quality investment projects that generate long-term economic value and employment. The following table from the Industrial Development Authority (IDA) Ireland’s annual report for 2012 indicates the key sectors attracting FDI in Ireland, measured as the total employment in IDA-supported companies.*
Sector
Pharmaceuticals Computer, Electronic & Optical Equipment Medical/Dental Instruments & Supplies Metals & Engineering Miscellaneous Industry International & Financial Services (incl, Software)
Total Number
22,154 15,884
24,438
10,474 4,986 74,849
152,785
% Change 2011/2012 0.0% +1.8%
+4%
+1.8% -0.3% +7.4%
+4.5% * Including part-time, temporary and short-term contract employees
1.3. Is the government generally supportive of FDI? Which government, and regional, bodies are responsible for driving FDI in your jurisdiction? The Irish government is wholly supportive of FDI, and it has been a cornerstone of national economic development since the 1960s. As a result of this emphasis on FDI, Ireland has become an important base to some of the most significant global companies, and the government is constantly working to make Ireland as attractive as possible for FDI. In recognition of
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Ireland’s efforts in this regard, the IMO World Competitiveness Yearbook 2012 ranked Ireland first in the world for investment incentives for attracting foreign investors.
IDA Ireland is the government agency responsible for attracting and supporting FDI into Ireland. It has offices throughout Ireland, six offices in the US, and others in Western Europe and in Asia, to support FDI into Ireland.
2. Investment vehicle
2.1. What are the most common legal entities and (pass-through) vehicles used for FDI in your jurisdiction, and how long do they take to become operational? Ireland ranks very highly in the various global tables for ease of doing business. As a small country, Ireland is flexible and can be responsive to the needs of investors; it seeks to avoid bureaucracy and red tape whenever possible.
The most common form of investment vehicle is the private company (limited or unlimited). Incorporation of a private company takes approximately five days. Certain foreign investors may also register a branch of a company incorporated in another country, and registration takes place in a matter of days.
2.2. What are the key requirements for establishment and operation of these vehicles which are relevant to FDI? (a) Private company limited by shares There are no FDI-specific rules regarding the establishment and operation of a private company limited by shares. Incorporation is a straightforward process.
A private limited company must have one secretary and a minimum of two directors. At least one of the directors is required to be resident in a member state of the European Economic Area (EEA). However, this requirement does not apply to any company which holds a bond, in the prescribed form, in force to the value of €25,394.76 ($34,538). The bond provides that, in the event of a failure by the company to pay the whole or part of a fine imposed in respect of an offence under the Companies Acts 1963-2012 or the Taxes Consolidation Act 1997, or a penalty under the latter legislation, an amount of money up to the value of the bond will be paid by the surety in discharge of the company’s liability. The secretary may be one of the directors of the company.
Directors must prepare annual accounts to be submitted to the Companies Registrations Office (CRO) once a year, and these must generally include a profit and loss account, balance sheet, directors’ report, business review report, a directors’ remuneration report and an auditors’ report.
(b) Branch Any company which is incorporated outside of Ireland and establishes a branch in Ireland must be registered with the CRO. A branch is a place of business, which has the appearance of permanency, has a management structure in place, and is materially equipped to negotiate business with third parties without resource to the parent body. The registration must take place within one month of the establishment of the branch in Ireland. There
IFLR REPORT | FOREIGN DIRECT INVESTMENT 2014 33
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