Business Development in Ireland
is, in many ways, a bridge between Europe and the USA. Over the last few decades Ireland has come from being one of the poorest countries in Europe to one of the richest. In fact, only Luxembourg now has a higher per capita income in the EU, and current Irish growth rates are such that Ireland should soon overtake them.
About 40 years ago, the then Irish Government recognised that Ireland was an economically poor, peripheral country with very little indigenous industry. So they established the IDA (the Industrial Development Authority) and gave them a clear mandate to attract foreign industry. At the time, this was a pretty unique step, but the success of the IDA has been such that their modus operandi has been copied world wide and continues to be so copied.
The IDA has been a vital part of Ireland’s economic success and they are still a good starting point for any business coming to Ireland. They will give a lot of general advice and will grant aid to business’s which they believe will benefit the wider economy. The IDA is especially keen on technology based companies which will provide high skill level jobs and good linkages to the local economy. However, they will try to push them to less well developed parts of the country and the infrastructure, although improving rapidly, is not always what it should be in those areas. Ireland does not yet have a road network of highway standards. On the positive side the infrastructure is being rapidly improved, and there now exist good flight connections to most of Europe and the US.
Ireland is not competing with the US for Inward Investment because it is attracting a completely different type of company. From the US, Ireland typically attracts large multinationals wishing to set up a European headquarter. Those companies that set up in Ireland do so for a number of reasons, including: (1) a benign tax environment, with a basic rate of Corporation Tax of as low as 10%, (2) availability of a highly skilled and well educated workforce (3) grant assistance (4) lifestyle reasons and (5) cultural fit. The lifestyle reasons are quite simply that Ireland is a good place to live, with a very friendly population. The cultural fit relates to the fact that the Irish are English speakers, and are very at ease and comfortable with other nationalities which have come to live in Ireland. Ireland also has some of the best golf courses in the world! Of course these reasons are just as valid for smaller companies as they are for larger companies, and Ireland does indeed also attract a lot of inward investment from smaller companies.
For those companies seeking funding in Ireland there are a number of possibilities. The grant environment is good and the venture capital environment is as well developed as anywhere. However, as with anywhere else, people with money are slow to part with it, and tend to be very wary of taking equity positions in companies with management they do not know. Realistically, foreign start ups in Ireland have to set up in Ireland and get a trading record before VCs will invest. However, once that track record exists, there remains many funding possibilities from state organisations such as Enterprise Ireland, Invest Northern Ireland, and Intertrade Ireland, as well as local VCs and private Equity.
Not surprisingly, for international success, it is very important to have the assistance of a reputable local commercial firm that knows the cultural differences, the unique local business environment, and the regional resources.
Margate Investments Ltd. an affiliate of International Subsidiary Development Inc.