IRELAND
are some differences between the requirements imposed on a company from a member state of the EU, and companies from other countries.
Any company incorporated abroad, that establishes a branch in Ireland, must file certain papers with the CRO. All companies are required to file accounting documents.
3. Investment approval
3.1. For foreign investment approval (including national security review) explain the following: a) The regulator/s’ name, factors it must consider when making its deci- sions, and how much discretion it has; b) Any investment caps and other legislative restrictions; c) Which party must notify and when/if notification is mandatory or vol- untary; d) What information must be included with notification and what is the review fee; e)How long does the review and approval process take, and are there any fast-track options; f) Is there the ability to consult on a named or unnamed basis; g) Does notification/review occur pre- or post-closing, and are there any pre- or post-filing requirements unique to FDI; h)What is the position if no response is received on an application for approval and are there any rights of appeal from disapprovals?
Not applicable in Ireland
3.2. Briefly explain the investment restrictions for any special/restricted sectors. There are no legal or regulatory restrictions specific to FDI into Ireland; generally speaking, the same rules apply to overseas owners of, and investors in, businesses as apply to Irish owners and investors. However, a number of sectors require businesses to obtain appropriate permits or authorisations to operate. Although there is no particular prohibition on FDI into these sectors, the terms of the permits or authorisations may well contain consent rights for the relevant regulator or other provisions which will be relevant for consideration in connection with FDI. Examples include:
• Energy: the gas and electricity industries in Ireland are regulated by the Commission for Energy Regulation (CER), and companies involved in these sectors will require a CER licence. This is likely to contain provisions relevant when considering an investment in, or acquisition of, a licence holder.
• Broadcasting: a licence from the Commission of Communication Regulation (ComReg) will be required by any entity which is providing television or radio services. These licences are likely to contain an obligation to notify ComReg of a substantial change of shareholding or a change of control. However, any restrictions on ownership of a broadcasting company apply equally to domestic and foreign acquirers, and there are no FDI specific considerations.
• Water and sewage: companies in Ireland are regulated by the Environmental Protection Agency (EPA). The EPA grants both Integrated Pollution Prevention and Control (IPPC) licences and EPA waste licences for certain activities. IPPC licences are generally open- ended, subject to compliance with their conditions, although a time limit can be included as a condition. Waste licences often have a limited time span. IPPC and EPA waste licences can only be transferred with the EPA’s prior consent. The EPA will not consent to such a transfer unless it is satisfied as to both the technical and financial competence of the proposed transferee.
While certain industries (such as media and banking) have specific tests, as a general principle, the Competition Act will only apply where all of the following thresholds apply: • the worldwide turnover of each of two or more of the undertakings involved in the acquisition in the most recent financial year was not less than €40 million;
• each of two or more of the undertakings involved in the acquisition carries on business in any part of Ireland; and
• the turnover in Ireland of any one of the undertakings involved in the acquisition in the most recent financial year must not be less than €40 million.
The notification regime is mandatory, and mergers, acquisitions or joint ventures coming within the scope of the Competition Act must be notified within one month of the conclusion of a binding agreement or the making of a public bid.
The Competition Act provides for a two-phase examination process for mergers. In Phase I the Competition Authority has an initial period of one month in which to decide whether to allow the merger to be put into effect on the grounds that it would not substantially lessen competition, or to carry out a more detailed investigation. If, at the end of Phase I, it is unable to form that view, an eight-week Phase II investigation is initiated. Phase II gives the Competition Authority an additional three months to further investigate the merger and decide whether it should be cleared (including subject to conditions) or blocked.
4. Tax and grants
4.1. Are there tax structures and/or favourable intermediary tax jurisdictions that are particularly useful for FDI into the country? One structure we commonly see used by US multinationals investing into Ireland is what is referred to as the double Irish structure. This can be used by US multinationals to exploit intellectual property (IP) outside the US. Briefly, this structure involves the non-US IP being held by an Irish incorporated entity resident for tax purposes in a low-tax jurisdiction such as the Cayman Islands, Bermuda or Isle of Man (IrishCo 1) with a cost sharing agreement in place with the US entity. IrishCo 1 licenses the IP to a second Irish incorporated entity resident in Ireland for tax purposes (IrishCo 2) for which IrishCo 2 pays a royalty fee to IrishCo 1. The royalty income of IrishCo 1 is subject to the low rate of tax in the jurisdiction in which it is resident, and is normally not treated as Subpart F income in the US. Further, IrishCo 2 gets a deduction for the royalty fee paid to IrishCo 1, which, in effect, reduces the taxable profits of IrishCo2. The taxable profits of IrishCo 2 are then generally subject to Irish corporation tax at the rate of 12.5%.
4.2. What are the applicable corporate tax rates? Income derived from trading activities is subject to Irish corporation tax at the standard rate of 12.5%, one of the lowest in Europe. Income derived from non-trading (or passive) activities is subject to Irish corporation tax at the higher rate of 25%.
3.3. Which authority oversees competition clearance, when is notification mandatory, and briefly explain the merger clearance process. Irish competition law rules and the Irish Competition Acts 2002 to 2012 (the Competition Act) require that certain mergers, acquisitions and joint ventures are notified to the Irish Competition Authority for approval, prior to completion. Unless the necessary approval has been obtained from the Competition Authority under the Competition Act, an acquisition for which such approval is required will be void.
34
IFLR REPORT | FOREIGN DIRECT INVESTMENT 2014
WWW.IFLR.COM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68