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Are UK companies relocating here since Brexit came into effect?

1.UK companies have always considered Ireland as a good place to do business and since Brexit came into effect UK SMEs were advised by their accountants to have a contingency plan in place. In an article in the Guardian in early 2019 it mentioned that one in three UK firms planned for Brexit relocation.

2.As the only native English speaking member left in the European union post Brexit Ireland is ideally positioned to access the internal EU market of 500m people. Ireland has long been a location of choice for multinationals wishing to establish a holding company as either their EU head quarters or for the purpose of holding shares in subsidiaries and managing other investments. /p>

3.Over 100,000 UK firms have already registered their businesses in Ireland in a possible bid to secure future access to EU markets. UK firms are hedging their bets against worst-case scenarios.

The IDA reckon some 100 companies (mentioned in a Bloomberg News interview) have relocated or expanded into Ireland over the last four years, but there is a very obvious spike in interest since January now where you are seeing more and more enquiries from British companies.

1.We saw a spike pre Christmas as UK businesses were worried of the prospect of a no deal and we spoke on a seminar with the Brititish Irish Chamber of Commerece and Kmend network with UK firms who were rushing to get their Irish subsidary up and running quickly.

2.Since Christmas we have been inundated with queries and UK businesses looking to get set up as they are experiencing logistical and customs delays and increased paperwork and administration. Every business is different however.

3.Ireland has the youngest population in Europe with an average age of 34.4 years. A 2010 European Commission study of third-level education stated that Ireland produced “the most highly employable graduates in the world”. Collaboration between leading-edge scientists and industry researchers is fostering a new generation of world-class innovation. Our up and coming talent and bright young people combined with excellent education here is a big factor.

Why is Ireland proving popular over, say, the Netherlands, which has already seen it’s fair share of British relocations?

Perhaps it is its proximity and you can get on a plane when safe to do so and be here in an hour. Where I am based in Kinsale is only 20 miuntes from the airport so a lot of UK businesses like the fact they can set up in a nice area, the start of the wild Atlantic way, proximity to the airport and Ireland and is a great place to locate for a number of reasons. Kinsale has been names as Irelands most enterprising town in 2020 and a great location to do business.

Why set up a business in Ireland ?

  • We have helped a lot of SMEs from UK and other jurisdictions to set up in Ireland. Why choose Ireland ?
  • It is an ideal location for SMEs and Entrepreneurs with 12.5% Corporation Tax.
  • A young workforce (Ireland has the youngest population in Europe)
  • A 25% R & D Tax Credit
  • Fourth highest international workforce in the EU
  • Effective zero tax rate for foreign dividends
  • Fourteen of the world’s 15 top medical tech companies based here
  • Top 10 global pharmaceutical companies based here
  • Top 5 global software companies based here
  • Twelfth most competitive economy in the world and fifth for business efficiency
  • First in the world for high value foreign direct investments
  • The most educated population in Europe. Over half 30-to-34-year old’s have a third level qualification, an EU average of 40.7%.
  • Third highest quality of life in the world
  • Starting in Kinsale, Co.Cork. The Wild Atlantic Way -Ireland’s spectacular coastal route.2,600 km in length is one of the longest defined coastal routes in the world.

What is required of British companies in terms of moving here? you say some companies are renting hot desks to establish a base - is this an easy way to help companies get established here?

Every business is different in a sense but we set up Kinsale Digital Hub to provide safe co- working space with good connectivity and regional hubs are one of the ways rural towns can compete and this flexible space gives UK Businesses a footprint and from there they can grow and locate a premises. We have had international clients before start here in our hub and quickly scale and grow employing staff and finding a suitable commercial presmises. We are thrilled when they outgrow our space. In tandem with that we set up a free App called Doing Business in Kinsale to help businesses to digitally connect which is shortlisted for App of the year.

So with digital technology we can provide the quick, efficient and low cost entry point for businesses to get established quickly serviced by our professional team of CPAs. However, Kinsale has many attractions for those who might want to re-locate and enjoy the undoubted advantages offered by remote working. Hot desks and remote working facilities are available in the town. However safety is our priority now and the town is in hibernation at present.

West Cork is a great place to do business and west cork has 300 miles of fabulous coastline that is world famous and already popular with the UK as a destination . But please don’t visit us just yet ! When we are all vaccinated you will be very welcome. With Ludgate Hub and kinsale Digital hub tech firms have already relocated teams to split rusk with covid etc. and set up part of their operation here for eg their sales and marketing etc.We know there are huge requirements in terms of EU red tape when it comes to GDPR and having an EU entity - this is something British companies are really only beginning to grasp…

The cost of doing business in Ireland is also rising and hopefully the SME sector won’t get left picking up the bill for Covid-19 and this sector needs more supports in reality.Given the Covid-19 pandemic I guess Brexit got pushed aside in 2020 and firms had to adpapt quickly and reinvent their business model. No one could have foreseen this coming and I guess a lot got distracted with that. We are now seeing a surge of UK Businesses setting up in Ireland and other locations who quickly need a gateway to Europe but also there are other factors. Our knowledge development box regime has an effective tax rate of 6.25% - this advatangeous treatment complements the R & D tax credit system . As the first OECD compliant patent box system in the world it provides long term certainty to companies planning their irish R & D activities .

And of course, there’s still a bit of breathing room for companies who have until July to get their heads around additional import/export changes

But with every crisis comes opportunity so the more entrepreneurial minded have adapted quickly to survive. There is also increased awareness of having a sustainable enterprise and green credentials of course and with the global crisis we have witnessed it is hard for any business to forecast or plan more than a year out. As a CPA accountant in the coalface of business everyday I have never seen anything like this and there is a sense of uncertainty about and Ireland is a a nice place to live and work. Of course with modern technology all you need is good connectivity and you can do business globally from your spare room….

1. Ireland is a start-up friendly environment

Ireland is a low bureaucracy, low tax and stable environment that is very supportive of entrepreneurs. Ireland is traditionally ranked high in key ‘doing business’ rankings. Irish people are willing to share knowledge and to network. In addition, it is easy to find an affordable co-working space in nearly every corner of the country. One recent government initiative is ‘Knowledge Development Box’. It offers a preferential tax rate on assets such as patents which are managed from Ireland and located here.

2. Ireland is a world leader in key innovative sectors

Ireland is home to world-class companies and research centers in sectors such as ICT, life sciences, gaming, financial services and food & beverages. This gives start-ups locating in Ireland easy access to quality staff, experienced entrepreneurs, investors, suppliers, research institutes and other support services with deep expertise in these sectors.

What are the advantages of relocating to Ireland - is it the proximity to the UK ?

Ireland is a gateway to world markets Ireland is one of the most open and globally connected countries in the world. Its geographic position, easy transport links to Europe, the US and the Middle East; and membership of the EU and Eurozone provides easy access to international markets. I think that Ireland has a good reputation for doing business, we are friendly and now seen as a great place for research and innovation with our 25% R & D tax credit. If we have learned anything in this crisis it is the value of research and innovation and thanks to all the talented people creating vaccines and solutions I think there will be a huge shift towards R & D going forward to safeguard us against the next tsunami whatever that is.

I think it is our access to Europe is the main attraction for UK businesses to be honest. Lets face it the UK is our largest trading partner and we are joined at the hip so in all our interests to work together.

Why now? Why not look to move your company 12 months ago? We all knew this was coming down the line?

1. A lot have already done this 12 months ago and before that date. But I guess we are all last minute by human nature so a lot of businesses got distracted with Covid-19 so Brexit was the least of their worries. I think a lot didn’t think it would turn out to be so protracted and we saw a huge rush pre Christmas.

2. Ireland offers a combination of a highly skilled educated skilled and flexible workforce and it is a great place to do business work and live. An ambitions long term strategic blueprint for Irish SMEs and entrepreneurs reports of the SME task force with a national growth plan has just been launched and hopefully will be actioned and acted on as the sector I work in is the engine of the economy and as the Taniaste put it Smes are the backbone in every city, town and village across the country. To back that up with some data from the ecconomist Jim Power :SMEs account for 99.8% of private business enterprises in the economy, spread across Industry, Services & Distribution, and Building & Construction.There are 270,557 SME enterprises in the economy, employing 1.063 million people, which is equivalent to 68.4% of private business employment.

Some Silver Linings

With the availability of vaccines, falling case numbers that will hopefully allow a gradual reopening of business in a safe way and more internal travel, and safe new systems, including a “digital vaccination passport” that will allow people to fly again. Once safe to do so we look forward to working with SMEs to develop growth strategies.

IS YOUR BUSINESS PREPARED FOR BREXIT

What are the benefits of forming an Irish company?

Cross-border trade is not the only benefit of registering a company in Ireland. Some of the main advantages include:

  • Very favourable tax system for companies. Low corporate tax rate of 12.5%
  • Ireland will be the only English-speaking country in the EU
  • Euro currency, no exchange fees when dealing across the majority of EU countries
  • Excellent Holding Company Regime
  • One of the easiest and most efficient countries in the World to do business
  • No Withholding Tax (‘WHT’) on dividends from Irish Holding Company to EU/tax treaty countries
  • Reduced rate of corporate tax for R&D/intangibles

Ireland is the ideal country for foreign direct investment and an attractive market for a business aiming to establish an EU presence.

Formation options:

Irish Subsidiary Company – 51% or more of this company’s shares are owned by the existing UK or overseas company

Irish Branch Company – This company does not issue shares and is viewed as an extension of the parent company

Irish Holding Company – This is a parent company that typically exists to hold shares of various subsidiary companies

Stand Alone Irish Company – This would entail registering a company in Ireland and transferring all assets of the existing overseas company

Contact our F & P team today to learn more about the various options available to your business as part of your Brexit strategy. We have many years of experience in company formations, company secretarial and corporate services. We can also assist with other essential services for your business including setting up a Corporate Bank Account, Corporate Tax, and VAT Registrations. Call 353 21 4774500.

Irish SME Brexit. How can Irish SMEs prepare for Brexit?”