Ireland is emerging as an enticing destination for startups and businesses seeking to establish their presence in Europe. With a pro-business environment, a highly skilled workforce, favorable tax regimes, and a strategic location, Ireland is fast becoming the go-to choice for entrepreneurs looking to expand their operations.
Here are the main reasons why Ireland is a prime destination for startups looking to tap into the European market:
Favorable Business Environment
Ireland is an exceptionally favorable location for startups, particularly in sectors like energy and environment, health, software, and data. Forbes magazine has recognised Ireland as one of the top 15 best countries in the world for business. The attractive features of Ireland’s tax regime include a low corporate tax rate of 12.5%, and extensive double taxation agreements, which make it an appealing choice for businesses of all sizes.
30% R&D Tax Credit
The R&D tax credit is a valuable tax-based incentive that is designed to encourage investment in research and development (R&D) by companies in Ireland. This initiative has been instrumental in attracting startups and businesses to the country’s innovative landscape. Notably, with Ireland’s Budget 2024, the R&D tax credit was increased from 25% to a remarkable 30%, making it even more enticing for companies looking to expand their R&D activities.
This tax credit program operates by providing companies with up to 30% of their R&D expenditure, which includes both revenue and capital expenses, in the form of a tax credit or cash rebate. The incentive comes in addition to the already attractive corporate tax rate of 12.5% that Ireland offers. This combination of a low corporate tax rate and a substantial R&D tax credit makes Ireland a prime destination for companies committed to innovation and technology advancement.
Skilled Workforce
Ireland’s highly skilled workforce is a key factor drawing businesses to the country. Over 50% of 25-34-year-olds in the country possess higher education, which is 17% above the European average. The country takes pride in its education system, which ranks 10th globally for its quality. Additionally, Ireland continually attracts international talent, making it a hub for career progression across various industries.
EU Membership
As the UK grapples with the complexities of Brexit, Dublin has emerged as one of the notable beneficiaries of the situation. Many firms are choosing Ireland as their new home due to concerns related to Brexit. The city’s well-established financial services sector has been a significant draw for companies seeking stability in the post-Brexit landscape. In fact, Dublin had welcomed more than a quarter of the firms that left the UK as of Spring 2021.
Businesses operating in Ireland can continue to enjoy the benefits of EU membership, such as passporting rights for financial services firms. The access to the EU’s 460 million-strong market ensures that Ireland remains a strategic location for companies looking to establish a presence in Europe.
Proximity to the United Kingdom
Ireland’s close proximity to the UK makes it an attractive choice for businesses that want to remain connected to the world’s fourth-largest economy. Despite Brexit, the relationship between Ireland and the UK remains a key factor for companies that value access to the UK market. Some barriers to trade and travel are expected to ease, making Ireland an even more critical partner for the UK in a post-Brexit world.
High Quality of Life
Apart from its business advantages, Ireland offers a high quality of life. The country is known for its stunning landscapes, vibrant cities, and reasonable living costs. Ireland’s infrastructure, including international airports and deepwater docks, supports business logistics.
In conclusion, Ireland’s combination of a skilled workforce, EU membership, proximity to the UK, business-friendly environment, and a high quality of life make it a top choice for startups looking to expand into Europe. Ireland’s great business track record and educated workforce further solidify its status as a prime destination for companies seeking success in Europe.
