Doing Business In Ireland: Business Environment
Labour market
Ireland’s corporation tax rate of 12.5% is often seen as the main factor in foreign multinationals locating in Ireland. However the presence of some of the world’s largest and best-known companies – including Google, eBay, Twitter, HP, Intel and Facebook – is testament to the outstanding highly educated and skilled workforce available in Ireland.
Population trends
Ireland’s population has grown significantly over the past number of years and we now have one of the youngest populations in the European Union (EU). The availability and quality of our educated young people has been a key reason many companies started locating and recruiting employees in Ireland.
Education
The abolishment of third-level educational fees in Ireland increased the number of young people completing third-level education. Individuals with third-level education and professional qualifications are now the norm, not the exception. Ireland has a wealth of graduates and skilled professionals in the areas needed most by businesses – finance, engineering, IT, law and science. The availability of these individuals helps businesses here to grow and develop.
Language skills
As an English-speaking country located between Europe and the United States, Ireland is ideally positioned to help businesses trade with large global markets such as the US and the UK. Our educational system places a strong emphasis on language skills and inward immigration rates has created a population with a diverse set of language skills. Businesses trading with some of the largest markets in the world have located here partly due to the language skills of our population.
Unit labour costs
Labour costs and the costs of doing business have fallen in recent years and Ireland is now seen as a competitive place from which to operate.
Employment, human resources and labour law
Our strong labour relations structures ensure that labour disputes are resolved in an efficient and timely way. The two main bodies – the Labour Relations Commission (LRC) and the Labour Court – are responsible for the resolution of disputes. All employees are entitled to a contract of employment from their employer. Terms and conditions of employment should be outlined in greater detail in a company handbook including disciplinary matters and grievance procedures.
Payroll taxes
Employers are obliged to apply payroll taxes for all employees. This includes income tax collected through the pay-as-you-earn (PAYE) system, payrelated social insurance (PRSI) and the universal social charge (USC). These taxes are applied on wages, salaries and benefits at various rates and increments.
Pensions and benefits
There is no obligation on employers to establish an occupational pension scheme for employees or to make pension contributions. However, there is an obligation on employers to provide a mechanism through which employees can fund their own pension through a Personal Retirement Savings Account (PRSA). Some employers do provide access to occupational schemes but in recent years, the ‘defined benefits/final salary’ model has been restricted or closed completely due to the difficulty of meeting funding obligations during tough economic times.
Holiday entitlements
Statutory annual leave entitlements are 20 days per annum plus approximately 10 bank holidays that arise each year. Part-time workers are entitled to the same level of holidays but on a pro-rata basis.
Maternity leave and benefits
Female employees have a statutory entitlement to 42 weeks maternity leave. The employer is not obliged to pay the employee during this period but some employers choose to do so. Male employees are not entitled to paternity leave. However, unpaid parental leave is available to both parents up until the child’s eighth birthday.
Visas and permits
Those from outside the EU (or the EEA) may need a visa to enter Ireland, a residence permit and a work permit. See www.citizensinformation.ie for an overview of visas and permits.
Business schemes leading to residency
Business people seeking to live and work in Ireland can apply to participate in the Start-up Entrepreneur Programme and the Immigrant Investor Programme. These Government schemes are aimed at entrepreneurs with a proven record of success. The Start-up Entrepreneur Programme has been designed to enable non-EEA nationals and their families who commit to a high potential start-up business in Ireland to acquire a secure residency status in the country. The Immigrant Investor Programme offers a range of investment options that allow approved non-EEA investors and their immediate family to enter Ireland on multi-entry visas and remain in the country for up to five years.
Do you have any questions about Doing Business in Ireland?
Feel free to contact Edward on +353 (0) 1 677 9000 or by email for a complimentary confidential consultation.
Edward Byrne is a Corporate Finance Manager at Cooney Carey. His work includes business, financial and sectoral analysis and management of transactions for a number of clients. He specialises in banking and review projects and over the last 2 years, he has worked on a number of “review and recovery” projects with debt levels of over €2B. Edward is a member of both the Association of Chartered Certified Accountants and the Institute of Management Consultants & Advisers in Ireland.