Foreword by Andrew Chilvers
Despite these uncertain times, expanding overseas can be a key driver for future growth for an ambitious business. International expansion can breathe new life into a company, drive huge value and set it on a path of continued success.
Expanding a business overseas is a strategic opportunity that will help diversify revenue streams, revitalise product development and give high returns on investment. But expanding a business into different jurisdictions takes time – this is a long distance run, not a sudden sprint to the finish line. Furthermore, expanding operations into a new jurisdiction can be fraught with challenges and risks that need to be addressed long before the first boots are on the ground.
For any company turning up in a foreign country, a multitude of tax and legal issues need to be addressed. This can be a labyrinthine experience and not for the faint hearted – but then faint hearted businesspeople seldom set their sights on overseas expansion.
Tax and compliance have to be at the top of any board’s agenda, ensuring the correct steps are taken the moment the company representatives land in-country. It’s pivotal to learn these issues to avoid any costly mistakes from the start.
What are the main government incentives available in your jurisdiction to attract multi- nationals and FDI investment?
Foreign Direct Investment (FDI) has and continues to play a pivotal role upon which Ireland’s economy has thrived. Ireland’s ability to attract and retain FDI is the result of a number of factors and consistent policy-making by the Irish Government over many decades, which has resulted in mutual success and benefit for the Irish economy and Foreign Investors alike.
Fundamental to this success is Ireland’s position with regards to global markets and working relationships, competitive taxation rates, various tax reliefs, invest- ment in education, membership of the European Union and a highly reputable standing on an international level.
Ireland offers very attractive incentives for FDI which include the following:
- A cornerstone of Ireland’s corporation tax policy is maintaining a corporation tax rate of just 5% on Irish trading income.
- Knowledge Development Box is a Corporation Tax relief on income from qual- ifying assets that are the result of qualifying R&D carried out by the company qualifying for the
- The Research and Development (R&D) tax credit is open to all companies in Ireland that are undertaking qualifying research and development activities in Ireland or within the European Economic
- New companies may qualify for start-up relief which could potentially shelter the taxable profits/gains of up to €960,000 in the first three years of
- Capital allowances
- A company may claim capital allowances for capital expenditure incurred on specified intangible assets such as patents, copyrights, trademarks and know-how against the income from ‘relevant activities’ of a
- A company can claim an Accelerated Capital Allowance (ACA) of 100% for the following:
- Energy efficient equipment including electric and alternative fuel vehicles
- Gas vehicles and refuelling equipment
- Equipment in a creche or gym provided by the company to its
- IDA Ireland is the State’s inward investment promotion agency that is tasked with growing and sustaining FDI in
What industries do you feel there are opportunities in for international investors / businesses in your jurisdiction? What factors do you think contribute to inward investment?
Ireland is home to the following:
- 8 of the top 10 global software companies
- 15 of the top 15 US technology companies
- 10 of the top 10 global pharmaceutical corporations
- 9 of the top 10 global medical technology companies
- 20 of the 25 leading financial services firms globally
- 9 of the 10 global aviation lessors.
There are many spinoff businesses that set up in Ireland linked to the above and we would work with many of these clients. We are particularly keen to work with software and technology companies that are looking to invest into their product or into new product ranges. With our attractive three-year Start Up exemption relief from corporation tax and our favourable “Knowledge Development Box” tax rate, it can be possible for such companies to have no tax liability on their first
€1M of profit and only 6.25% on the reminder of profits generated from qualifying activities if structured correctly.
We provide compliance and advisory services to overseas property investors that have Irish real estate investments. We can further assist with sourcing and iden- tifying property investment opportunities in Ireland up to mid-market levels, and we would have investor clients consistently earning double digit rental yields that are also holding large capital appreciation increases in their Irish asset portfolios.
Finally, we are working with many companies that have re-located to Ireland as part of their Brexit plans to enable them to continue to trade into the EU. In addition, we are also seeing many companies adapting to changes by choosing Ireland as the location for valuable IP which further bolsters substance and func- tions carried on in Ireland.
Why is it important to hire a local firm to support international expansion? How can you help smooth the process for your clients and overcome common pitfalls?
There are many advantages for hiring a local firm for the expansion into Ireland by global companies. These include the following:
- Knowledge of the market – instead of spending time doing research into the market, a local firm would already have this knowledge which could be a critical factor in saving
- Compliance – local firms will be able to ensure that the company will comply with all rules and regulations established in Ireland. This would include Com- pany Law, Irish Tax Laws, Immigration,
- Easier to build a network – as a local firm already has an established local network, this can be easily tapped into and They will be able to recom- mend other local businesses/suppliers that the company may be able to use.
- Knowing the culture – any business expanding into Ireland should be familiar with the culture in the country. Understanding a country’s culture is a sign of respect. It also helps to foster effective communication, a vital factor in business
Working with a local firm of our size and structure, can help smooth the process of expanding into Ireland. We have the experience of incorporating businesses, arrang- ing the opening of bank accounts, and the provision of bookkeeping, accounting and tax services. We have the expertise to assist companies in business plan models, forecasts, arranging finance and grant aid support in Ireland. With our inter- national client experience we can ensure that companies do not fall into the common pitfalls of international expansion such as underestimating the local competition, not doing enough research or having inadequate financing levels.
Malone & Co. are available to answer any queries that may arise during the expansion process.