Investing
in Ireland
Issue 22
March 2015
Happy St. Patrick’s Day and welcome to the
22nd edition of PwC’s newsletter on foreign
direct investment (“FDI”) in Ireland.
The strong pipeline of new Irish investments by
first time and existing investors continues in
2015 (see pages 2&3), with Dublin being
recognised as one of the world’s most vibrant
cities.
On the legislative front, the entry into law in
June 2015 of Ireland’s Companies Act 2014
(page 4), as well as planning for the “Knowledge
Development Box” to be introduced in 2016
(page 6), will be of interest to new and existing
investors alike.
For companies in the online/B2C sector, the new
2015 VAT rules (see page 5) should mean that
Ireland is an even more attractive location for
such businesses to locate centralised EU hubs
which can manage all EU VAT obligations.
Please do not hesitate to contact myself, any
member of our team, or your usual PwC Ireland
contact at any stage. We would be happy to tell
you more about the topics raised in this issue or
to include any interested parties on our mailing
list.
Remember to visit our FDI website for more
updates and detailed information
(www.pwc.ie/fdi), including a range of recent
publications.
Liam Diamond
+353 1 792 6579
+353 86 405 6965
[email protected]
Recent FDI
announcements
1E, the global leader in IT efficiency
software, announced the opening of a
software development office in Dublin as a
strategic move to invest in Ireland and tap
into the country’s IT talent pool, with plans
to employ up to 40 people over the next 2
years
ABEC, a company which provides
integrated solutions for biopharmaceutical
manufacturing, announced plans to
expand its global operations at the former
FCI facility site in Fermoy, Co. Cork, and
will create 100 jobs over the next two years
Accenture, the leading management
consulting and services company, is set to
hire 250 people into its workforce in
Ireland by September 2015
Airbnb, the world’s leading communitydriven hospitality company, announced
that it has started hiring for 200 new
positions at its Dublin operation to meet
the needs of its growing community of
hosts and guests
Allianz Worldwide Care, a leading
international health and life insurer, has
announced it is to create 100 new positions
in Dublin
AMAX, a leading computing solutions
provider, announced the opening of its
European manufacturing facility at
Western Business Park in Shannon which
will provide 100 jobs over the next five
years in production, warehousing, finance
and sales
Apple, the leading consumer electronics
company, has announced a €850m
datacentre to be built in Galway – the
company’s largest datacentre project in
Europe will provide 300 jobs during
multiple stages
Johnson & Johnson, the multinational
medical devices, pharmaceutical and
consumer packaged goods manufacturer,
plans to create up to 100 new jobs through
the creation of a Development Centre at
the National Technology Park, Limerick
Calypso Technology, a leading
provider of capital markets software
solutions, is to establish a Managed
Services Centre in Dublin with plans to
create up to 150 skilled roles
MDS Global Technologies, a
technology manufacturing company and
SWG Inc, a company which buys, sells
and repairs wireless and network
equipment, have both officially opened
their international headquarters in Kells,
Meath, creating a total of 50 jobs over the
next three years
Danone Nutricia Early Life
Nutrition, a company which specialises
in the delivery of advanced medical
nutrition, concluded a €180m expansion
programme with the opening of a €26m
production line in Wexford and the
creation of 50 new jobs
Fidelity Investments, one of the
world’s largest providers of financial
services, celebrated the opening of its
second Dublin office with plans to hire up
to 200 new employees
Guidewire Software, a global provider
of software products to the general
insurance industry, announced the
expansion of its operations in Ireland with
the leasing of additional office space to
handle its growing team, expected to
increase by 60-80 new staff in 2015/2016
Horizon Pharma, a specialty
biopharmaceutical company, announced
that it has formally opened its new Global
Corporate Headquarters in Dublin, with
plans to add sixty highly skilled jobs over
the next three years
Nelipak Healthcare Packaging,
a leading provider of custom
thermoformed packaging to the Medical
Device and Pharmaceutical markets,
announced the expansion of its Irish
workforce with an increase of 10
employees
Phenix Jewellery, an insurance claims
validation and fulfilment provider, will
establish an International Operations
Centre in Galway creating 30 jobs
Storyful, the first social news agency of
the social media age (acquired by News
Corp in late 2013) announced the creation
of 30 new jobs at its Dublin headquarters
viagogo, the world’s largest ticket
marketplace, intends to double its
workforce in Ireland over the next three
years, taking it from 100 to over 200
employees
Zimmer, a worldwide leader in
musculoskeletal healthcare, will create up
to 250 new manufacturing jobs over the
next 5 years at its facility in Galway
Dublin ready to celebrate
this St Patrick’s Day
With St Patrick’s Day nearly upon us, the theme for
this year’s Dublin parade will be ‘Celebrate Now’ – a
very fitting title for the city, considering Dublin is
currently celebrating its recent recognition as one of
the world’s fastest-growing and most welcoming cities.
Dublin has recently been recognised as:
Best place
outside of
North America
for Americans
to live
“We are very impressed with the economic
progress Ireland has made in recent years
and we believe the outlook for the economy is
very positive. Dublin is widely recognized as
a leading center for the pharmaceutical
industry and has a deep pool of talented
young people who can join our team and
help us to grow our operations.”
Timothy P. Walbert, chairman, president and chief executive officer,
of Horizon Pharma plc.
(ECA International)
One of
the world’s
fastest-changing
cities and the
world’s number
one city for
growth
“We are delighted to be adding a new location to
our Ireland operations. We are constantly
assessing our worldwide operations and logistics
network and this project is a direct result of that
process. Zimmer has had a very positive
experience of doing business in Ireland.”
Adrian Furey, General Manager for Zimmer Ireland
(JLL’s Top 20 Global City
Momentum Index)
Top
Eurozone
city
(FDI Magazine’s Global Cities
of the Future)
14 new start-ups established by entrepreneurs
from overseas across a range of sections, with
founders who have moved t o Ireland from
Singapore, Indai, Switzerland and Germany,
have established business in Ireland in 2014.
From the Enterprise Ireland High Potential Start-Ups programme 2014
Companies Act 2014
The Companies Act 2014 will consolidate and reform Irish
company law to meet the needs of business for the first time in over
50 years. This modernization of Irish company law should make it
easier for companies to do business in Ireland.
It is the largest single piece of legislation that Ireland has ever
introduced and will implement a number of changes to ease the
administrative burden on Irish companies (for example, reducing
scenarios where Court approval is required for certain transactions,
permitting majority written resolutions and allowing the new
simplified private limited company (LTD) to have a single director).
New types of company
The Act provides for two new types of private
company and recognises the continued existence
of the current company types. Under the new
system, a company of any type may be
incorporated with a single member.
Existing private limited companies should convert
to the most appropriate new entity type before the
end of the transition period. The options are:
The Act was signed into law on 23 December 2014 and will come
into effect in June 2015. A transition period of 15/18 months will
begin once the Act is commenced.
• Private Company Limited by Shares (LTD) –
this is a much simplified format of the current
private limited company
Key measures
• Designated Activity Company (DAC) – this
model is required for certain companies
including regulated financial institutions
Introduces procedures to
allow private companies to
merge or divide without
Court approval – saving time
and money
Provides clarity for directors
and companies in relation to
the keeping of financial
records and the preparation
and audit of financial
statements
Codification of
Expands the audit
directors’ duties,
exemption to include
giving clarity for
group companies and
directors
guarantee companies
and also expands the
thresholds
Changes to the requirements relating
to directors’ loans – encouraging
loans to directors to be properly
documented
Introduces the Summary
Approval Procedure to
simplify the procedure for
certain restricted activities
During the transition period, an existing private
limited company will be deemed a DAC unless
converted to an LTD. If no conversion is made
during the transition period, the company will
default to an LTD once the transition period is
over.
Check our our recent
PwC publications and
webpage for more
information...
Companies Act 2014
Reducing Cost and Complexity Entity
Governance and Compliance webpage
www.pwc.ie
Ireland
Companies Act
2014
At last, the long awaited
Companies Act, 2014 has come into
law on 23 December 2014 with
commencement likely to be June,
2015. This is the largest piece of
legislation lreland has ever seen,
comprising a total of 25 Parts (over
1440 sections) and 17 Schedules.
The Act consolidates and reforms
Irish Company Law and every
Company, director and shareholder
will be affected and will have
choices to make.
In this bulletin we aim to give an overview
of the Act, which will assist you to
understand, in simple terms, how the Act
will affect you. We will look at the options
available to you in order to comply with
the Act, in a practical and cost effective
manner.
VAT – “B2C online”
Why Ireland for online...
• Young talented workforce
• English speaking Eurozone location
Ireland has proved a successful international hub for many
‘online’ businesses, being home already to:
• Easy access to EU market
• The top 10 ‘born on the internet’ companies
• All of the biggest names in social media
• Leading MOSS location for managing EU VAT
obligations
• 3 of the top 6 games companies
• Excellent location for data hosting/datacentres
Ireland’s competitive position has been enhanced further in
2015 as a result of changes to EU VAT rules for B2C
electronically supplied services. From 1 January 2015, the
’place of supply’ of such services is where the consumer is
located.
• Robust data privacy laws
As a result, the VAT rate to be levied on supplies of B2C
online/e-services is the rate applying in the consumer’s
jurisdiction, not that of the supplier. This means a level
playing field from a VAT perspective as the location of the
supplier no longer determines the applicable VAT rate. VAT
rates, therefore, should no longer be a significant driver in
EU hub location decisions.
Ireland is already an attractive location in which to locate a
hub to manage such services across the EU (talent, tax,
business environment, etc). Ireland now has the added
advantage of also being one of the leading locations for EU
and non-EU suppliers because of our best in class “MOSS”
(Mini One Stop Shop) regime which facilitates efficiently
dealing with all EU VAT compliance obligations centrally in
Ireland.
• Competitive tax regime
Economic update
• Ireland will be the European Union’s fastest-growing economy
in 2015, with GDP growth of 3.5%
• Ireland’s debt to GDP ratio -which stood at 123.3% of GDP in
2013 - is expected to fall to 110.3% of GDP in 2015 and 108%
next year
• Unemployment in Ireland reached 10.5% in January 2015, the
lowest rate in 6 years. It is expected to fall to 9.6% by the end of
the year and 8.8% in 2016
• Ireland reduced its deficit to 4% of GDP in 2014, down from
5.7% in 2013 thanks to buoyant tax revenues
Ireland continues in No.1 position in
a range of FDI rankings
1 in Western Europe for ‘best to invest’
st
1
1st in Western Europe for ‘best to invest’1
1st in the World for flexibility and adaptability of
workforce and availability of skilled labour2
1st in the World for attitudes towards globalisation2
1st in the World for investment incentives2
1st in Europe for ease of paying taxes3
1st in the World in the overall Good Country Index and
for Prosperity and Equality4
1st in the World as a destination country for FDI
(based on average value of investment projects)5
1st in the Eurozone for ease of conducting business6
1st in the Eurozone for trading across borders7
Site Selection Magazine Global Best to Invest Report 2014
IMD World Competitiveness Yearbook 2014
3
PwC/World Bank Group – Paying Taxes 2015
4
Good Country Index 2014
5
IBM Global Location Trends 2014
6
TMF Group Global Benchmark Complexity Index 2014
7
World Bank Group – Doing Business 2015
1
“Paying Taxes” report
Ireland has the most effective and efficient tax system for
businesses among EU member states, and the sixth best in the
world. The PwC/World Bank report, which covers 189
global economies, also shows that businesses are affected not
only by tax rates, but also by the procedural burden of
compliance.
A typical Irish company will spend two weeks dealing with its
tax affairs; globally firms spend over seven weeks dealing
with their affairs.
The survey demonstrates that having simpler tax systems
with competitive business tax rates gives countries like
Ireland a real advantage in the market for attracting foreign
direct investment. The straightforward and transparent Irish
tax system is much less bureaucratic compared to other
countries.
The transparency of the country’s taxation regime, together
with its 12.5% statutory corporate tax rate, world class R&D
tax credit offering, competitive IP and Holding Company
regimes and extensive tax treaty network, is a key factor in
Ireland’s status as a leading global FDI destination.
2
Knowledge
Development Box
The Department of Finance has launched a consultation
process on a competitive income-based tax regime for
intellectual property, to be known as the ‘Knowledge
Development Box’. The incentive will offer companies a
reduced tax rate (i.e. less than the statutory rate of 12.5%) on
earnings generated from qualifying intellectual property,
with benefits linked to the extent of R&D activities carried on
by the company.
The Irish scheme will represent a best in class offering in
order to enhance Irelands competitiveness. Ireland is also
committed to ensuring that the design of the Knowledge
Development Box complies with international standards,
which are currently being finalised.
The introduction of the Knowledge Development Box should
be of particular interest to new and existing businesses
carrying out R&D activities in Ireland, and will further
strengthen Ireland’s competitive position for IP (e.g. 12.5%
tax rate, 25% refundable R&D tax credits, IP amortisation
regime, etc.)
Tax treaty update
Ireland has signed comprehensive double taxation agreements with
72 countries, of which 68 are in effect.
New agreements have been signed with Ukraine, Thailand,
Botswana, Ethiopia, Uzbekistan, Egypt and Qatar. The legal
procedures to bring these agreements into force are now being
followed.
Ireland has also completed the ratification procedures to bring the
protocol to the existing agreement with Malaysia into force, with
Malaysian ratification procedures awaited.
Protocols to the existing agreements with Belgium, Denmark,
Luxembourg and Germany were signed and the legal procedures
to bring these protocols into force are now being followed.
Negotiations on a new agreement with Turkmenistan and
agreements to replace the existing agreements with Pakistan and
Zambia have concluded and are expected to be signed shortly.
Negotiations for new agreements with Azerbaijan and Jordan
continue while negotiations are ongoing for the revision of the existing
agreement with the Netherlands and for a protocol to the existing
agreement with Mexico.
Would you
like
to know
more?
Should any of the topics covered in the
newsletter be of particular interest to
you, please do not hesitate to contact
any member of the FDI team, or your
usual PwC Ireland contact. If any of
your colleagues would like to be
included on our mailing list, please let
us know.
Please click on our website
www.pwc.ie/fdi for additional
information. Various topics of interest
for foreign investors can be found in
the publications link in the tax
section, including:
Companies Act 2014
Tax Facts 2015
Are we there yet?
Finance Bill 2014
Budget 2015
Why Ireland?
2014 CEO Pulse Survey
Previous edition of
“Investing in Ireland”
Contacts
Jean Delaney
+353 1 792 6280
[email protected]
Mary Honohan
+353 1 792 8609 [email protected]
Terry O’Driscoll
+353 1 792 8617
[email protected]
Liam Diamond
+353 1 792 6579
[email protected]
Susan Kilty
+353 1 792 6740
[email protected]
John O’Leary
+353 1 792 8659
[email protected]
Enda Faughnan
+353 1 792 6359
[email protected]
Ronan MacNioclais
+353 1 792 6006
[email protected]
Feargal O’Rourke
+353 1 792 6480
[email protected]
Denis Harrington
+353 1 792 8629
[email protected]
Joe Tynan
+353 1 792 6399
[email protected]
Garrett Cronin
+353 1 792 8807
[email protected]
Andy O’Callaghan
+353 1 792 6247
[email protected]
James McNally
+353 1 792 6844
[email protected]
www.pwc.ie/fdi
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2015 PricewaterhouseCoopers. All rights reserved. PwC refers to the Irish member firm, and may sometimes refer to the PwC network.
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