Why UK Companies should Consider Establishing a Trading Company in Ireland
Most forecasts suggest that Britain will be a poorer country after Brexit, largely because trading with the European Union will become more difficult. (The Economist, July 19, 2018)
Bank of England governor Mark Carney emphasised the impact of uncertainty surrounding the UK’s future trading relationship with the European Union, saying it had “prevented what would otherwise have been a surge in investment in this economy”(BBC News, April 19, 2018)
What will happen to Britain if they leave the EU? – More than 100,000 British businesses export goods to the EU each year. At present they enjoy tariff-free trade with the country’s biggest export market. But all face uncertainty as Britain negotiates a new trading relationship with Brussels. Some fear disaster if the talks break down. British carmakers could face a 10% tariff to export to the EU market. Dairies might have to pay tariffs of more than 30%. These extra costs could make exporting uneconomic according to a new paper by Meredith Crowley, Oliver Exton and Lu Han from Cambridge University
Time to Relocate the Business? – In light of these issues many UK businesses are looking to relocate to minimise risk and guard against uncertainty. If the UK does leave the EU then Ireland will be the only English speaking country in the EU. Moving to Ireland allows British businesses to stay relatively close to their UK-based clients, while also ensuring they can continue to operate unrestricted in the single market.
Ireland itself is also a fast-growing economy, with strong trade links to much of the world. It was ranked eighth in Forbes’ 2017 list of best countries in the world to do business in. Thanks to high wealth per capita, opportunities for investment and expansive national GDP growth, it outstrips 135 other countries to claim its title.
Once you’ve made the decision to move to Ireland, there are a number of important steps you need to take to enjoy successful relocation. Moving your business to Ireland is currently far easier than most places outside of the EEA. You don’t currently need a visa or permission to start a company; you may simply move and register, thanks to the UKs current European Union membership.
Why it makes sense to relocate to Ireland?
1. Ireland is the frontrunner for Brexit relocation from the UK – “The reasons highlighted for Ireland’s popularity included common-law jurisdiction, protection of contracts, English-speaking and a relatively easy destination to access. While companies are preparing for Brexit, with many having made plans, they cannot hold off indefinitely to implement these plans. (Silicon Republic, March 26, 2018)
2. Corporation Tax Rate – Corporation tax is just 12.5%, comparative to 19% in the UK (plus dividend taxes) and 35%in the United States. In order to avail of the 12.5% rate of corporation tax your company must be actively carrying on a trade in Ireland.
3. R & D Tax Credit – Ireland also offers companies a 25% tax credit for qualifying research and development expenditure, and can be set against a company’s corporation tax liability.
4. English Speaking Workforce – Ireland will be the only English country in the EU post Brexit. Ireland’s educated, young, English-speaking workforce has long made it an attractive location for foreign companies. Ireland’s workforce is one of the most youthful and most highly-educated in Europe, so there’s is plenty of talent to choose from.
5. Highest European Growth Rate – The European Commission’s Summer 2018 Interim Economic Forecast predicts Ireland to have the highest GDP growth in the EU in 2018 at 5.6
6. Guaranteed EU Market Access – Ireland is a committed member of the European Union and provides companies with guaranteed access to the European market. The brightest talent from across Europe is attracted here, mixing with our own to offer a multinational and multilingual melting pot of skills with a positive attitude to match.
7. Export Driven Economy – Ireland is the 23rd largest export country in the world with systems and services in place to support business. (Index Mundi Jan 1, 2018)
8. Location – Dublin is conveniently located just an hour’s flight from London and most UK airports
If you are interested in setting up a company in Ireland please contact us here