Ireland has been one of the biggest victims of the global financial crisis but in the years preceding the crisis, Ireland, dubbed the Celtic Tiger, grew at unprecedented rates. Between 1995 and 2000, the Irish economy grew at an average rate of 9.5% and 5.5% between 2000 and 2008. The rapid growth was fuelled by low corporate tax rates, EU aid, supportive industrial policy and favourable demographics. Ireland company incorporation attracted foreign entrepreneurs due to its appeal as a financial hub in the region.
But with the onset of the global financial crisis in 2008, the economy plummeted and by 2010 GDP had contracted by 14% and unemployment soared to 14%. According to The Economist, in terms of economic development, Ireland has lost 10 years and gone back to 2002. However Ireland’s Economic and Social Research Institute is more positive. They expect Ireland’s economy to grow moderately at 3.75% a year over the next decade with exports of business and financial services seen as the major driver.
Future economic growth will depend a lot on a crucial referendum about the EU’s fiscal treaty, which mandates tight debt and deficit rules. If the Irish voters reject the fiscal compact, the economic and financial consequences would be severe. Ireland would not be eligible for support from the Eurozone’s fund, there’d be havoc in bond markets and it would even cast doubts about Ireland’s membership in the Eurozone.
In spite of all this, Ireland remains a world-class jurisdiction and popular choice for offshore companies. The quality of Irish institutions and infrastructures has largely been unaffected by crisis. In the World Bank’s Ease of Doing Business, Ireland ranked 10th in 2012 with particularly high rankings in paying tax (5th), protecting investors (5th) and getting credit (8th). Ireland’s economy is the 9th freest in the world according to Heritage’s 2012 Index of Freedom. And in terms of standard of living, Ireland is still one of the best places to live in with a HDI ranking of 7 as of 2011. With an extremely low corporate tax rate of 12.5%, double taxation treaties with more than 48 countries (including China, India , US and Australia) and a gateway into the European market, Ireland will continue to be an ideal tax-efficient jurisdiction to incorporate in.
The 3 most popular forms of incorporation in Ireland are limited liability companies, stock corporations and branches. The choice of corporation will depend on your business needs but in all 3 cases, 100% foreign ownership is permitted and incorporation only takes 3 to 5 days. There is no withholding tax for dividends exiting the country. If a foreign owned company does not conduct business in Ireland, then it can enjoy legally tax-exempt status. All types of corporations require 2 directors but they need not be Irish. There are other advantages of Ireland company formation, such as the geographic location to the UK and Europe.
For entrepreneurs, or established businesses, Ireland can be an effective corporate structure that gives legitimate tax efficiency, along within a reputable jurisdiction.
Healy Consultants Group is a leading corporate services firm that assists entrepreneurs and investors with the processes required complete offshore company registration in many jurisdictions around the world including Ireland companies. More information on company incorporation can be found by visiting our website.