In honor of Saint Patrick’s Day, we wanted to take a look at why startups are opening offices in Ireland as part of expansion plans into Europe. Facebook, Linkedin, Google, Apple have all gone ahead and done it, so it must be good right?
After the financial crisis of 2008 Ireland was one of the first countries to deal with the fallout from its over-stretched banks and as a result has recovered much quicker than other countries in the Eurozone, with GDP growing at around 6% a year vs 0.3% for the Eurozone as a whole. The ability of Irish lawmakers to deal with the crisis, to accept global realities and to adjust their tax policy, has enabled Ireland take advantage of the huge wave in US tech companies expanding eastwards, using Ireland as a stepping stone.
That said, whilst corporate tax rates of 12.5 % on traded income are very competitive, there are several other reasons to head to Ireland:
At the top of any list, is the work force that it offers. With more than 50% of the country’s population under 25 years of age, a sizeable chunk of people in the 18-25 age group are completing their tertiary education, thus making skill availability high. Much of the talent is geared towards businesses that specialize in engineering and technology that require sales / marketing and customer support centers in the Eurozone market.
Ireland has had an R&D Tax Credit scheme since 2004. Qualifying R&D expenditure generates a 25% tax credit for offset against corporation tax, in addition to the tax deduction at 12.5%. Its purpose is to encourage both foreign and indigenous companies to undertake new and/or additional R&D activity in Ireland.
The “Google” effect: Innovative tech companies from Silicon Valley are not only transforming the world we live in by changing the way we shop, communicate and learn, they are changing the workplace itself. A culture of innovation, flexible working hours, inspiring office spaces and architecture has combined with the young population to create a really vibrant place to live and work and which has generated its own gravitational pull – further enhancing the reputation of Ireland in the eyes of business and employees on the world stage.
The IDA (Irish Development Authority) has been instrumental in marketing the country to business leaders globally by leveraging these attributes and a global network of well-placed Irish expats. The friendly nature of the people, the regulatory framework and the Government has resulted in impressive growth.
Lastly, it’s not just the land of potatoes, rain and Guinness…it also has world class surf!