The Investment Climate Statement Chapter of the CCG is provided by the State Department.
The U.S. Department of State Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.
Topics include Openness to Investment, Legal and Regulatory systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
These statements highlight persistent barriers to further U.S. investment. Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy. To access the Ireland ICS, visit the U.S. Department of State Investment Climate Statement website.
The COVID-19 crisis has already had a serious impact on Ireland’s economy and will continue to do so in 2021. Since March 2020, the Irish government has implemented varying degrees of lockdown measures in response to the COVID-19 pandemic, including restrictions to close non-essential businesses and services for extended periods of time. Ireland’s official unemployment rate has remained around five percent (currently at 5.8 percent as of January 2021) due to the unprecedented pandemic related assistance programs to businesses and workers furloughed due to COVID-19. Due to the high number of individuals receiving pandemic wage subsidies, the official unemployment rate is still roughly five percent, much lower than what the Irish government expects without these programs. Including workers furloughed by the pandemic, the real unemployment rate has fluctuated in line with the three separate nationwide lockdowns in 2020 and 2021, increasing the unofficial unemployment rate to average at an estimated high of 20 percent. Despite the prolonged difficulties, Ireland’s economic projections remain positive and the strongest among the Eurozone countries with three percent economic growth in 2020. This is due to continued growth in exports by technology, pharmaceutical, and other large multinational companies headquartered in Ireland. The government is hopeful its emergency measures will help businesses and its once-sound economy to quickly return from its COVID-19 enforced hibernation.
The Irish government actively promotes foreign direct investment (FDI) and has had considerable success in attracting U.S. investment, in particular. There are over 900 U.S. subsidiaries in Ireland operating primarily in the following sectors: chemicals, bio-pharmaceuticals and medical devices, computer hardware and software, internet and digital media; electronics, and financial services.
One of Ireland’s many attractive features as an FDI destination is its 12.5 percent corporate tax (in place since 2003). Firms also choose Ireland for the quality and flexibility of the English-speaking workforce; the availability of a multilingual labor force; cooperative labor relations; political stability; and pro-business government policies and regulators. Additional positive features include a transparent judicial system; transportation links; proximity to the United States and Europe; and Ireland’s geographic location making it well placed in time zones to support investment in Asia and the Americas. Ireland benefits from its membership of the European Union (EU) and a barrier-free access to a market of almost 500 million consumers. In addition, the clustering of existing successful industries has created an ecosystem attractive to new firms. The United Kingdom’s (UK) departure from the EU, or Brexit, on January 1, 2021, leaves Ireland as the only remaining English-speaking country in the EU and may make Ireland even more attractive as a destination for FDI.
The Irish government treats all firms incorporated in Ireland on an equal basis. Ireland’s judicial system is transparent and upholds the sanctity of contracts, as well as laws affecting foreign investment. Conversely, Ireland’s ability to attract investment are often marred by: relatively high labor and operating costs (such as for energy); skilled-labor shortages; Eurozone-risk; a sometimes-deficient infrastructure (such as in transportation, housing, energy and broadband Internet); uncertainty in EU policies on some regulatory matters; and absolute price levels among the highest in Europe.
A formal national security screening process for foreign investment in line with the EU framework is still being developed. At present, investors looking to receive government grants or assistance through one of the four state agencies responsible for promoting foreign investment in Ireland are often required to meet certain employment and investment criteria.
Ireland uses the euro as its national currency and enjoys full current and capital account liberalization.
The government recognizes and enforces secured interests in property, both chattel and real estate. Ireland is a member of the World Intellectual Property Organization (WIPO) and a party to the International Convention for the Protection of Intellectual Property.
Several state-owned enterprises (SOEs) operate in Ireland in the energy, broadcasting, and transportation sectors. All of Ireland’s SOEs are open to competition for market share.
While Ireland has no bilateral investment treaties, the United States and Ireland have shared a Friendship, Commerce, and Navigation Treaty since 1950 that provides for national treatment of U.S. investors. The two countries have also shared a Tax Treaty since 1998, supplemented in December 2012 with an agreement to improve international tax compliance and to implement the U.S. Foreign Account Tax Compliance Act (FATCA).