There are a many reasons to start a business in Ireland. The strength of the economy, the quality of the labour market, the high standard of education and the ease of doing business all contribute to make Ireland an excellent place to set up a company.

Economy of Ireland

The economy of the Republic of Ireland is a highly developed knowledge economy, focused on services in high-tech, life sciences, financial services and agribusiness including agrifood. Ireland is an open economy (6th on the Index of Economic Freedom), and ranks first for high-value foreign direct investment (FDI) flows. In the global GDP per capita tables, Ireland ranks 4th of 186 in the IMF table and 4th of 187 in the World Bank ranking.

Ireland ranks first for high-value foreign direct investment flows

Foreign-owned multinationals continue to contribute significantly to Ireland’s economy, making up 14 of the top 20 Irish firms (by turnover), employing 23% of the private sector labour-force, and paying 80% of corporation tax collected.

Ireland continues to de-leverage its domestic private sector while growing its US multinational-driven economy. Ireland became the main destination for US corporate tax inversions from 2009–2016 (mostly pharmaceutical), peaking with the blocked $160bn Allergan/Pfizer inversion (world’s largest inversion, and circa 85% of Irish GNI*). Ireland also became the largest foreign location for US “big cap” technology multinationals (i.e. Apple, Google, Microsoft, Facebook), which delivered a GDP growth rate of 26.3% (and GNP growth rate of 18.7%) in 2015. This growth was subsequently shown to be due to Apple restructuring its “double Irish” subsidiary (Apple Sales International, currently under threat of a €13bn EU “illegal state aid” fine for preferential tax treatment).

Ireland Economic Indicators

Ireland GDP Growth Rate

Irish economy is based on foreign trade, industry and investment. The country is major high-tech manufacturer and is one of the world’s biggest exporters of pharmaceuticals and software. On the expenditure side, household consumption is the main component of GDP and accounts for 44 percent, followed by gross fixed capital formation (19 percent) and government expenditure (17 percent). Net exports adds 19 percent to total GDP as exports account for 114 percent while imports for 95 percent.

Ireland Interest Rate

Ireland is a member of the European Union which has adopted the euro. Ireland’s benchmark interest rate is set by the European Central Bank. The official designation for the rate is main refinancing operation.

Ireland Inflation Rate

In Ireland, the most important categories in the consumer price index are: housing, water, electricity, gas and other fuels (17 percent of total weight); transport (15 percent); restaurants and hotels (14 percent) and food and non-alcoholic beverages (11 percent). The index also includes: recreation and culture (8 percent); clothing and footwear (5 percent); alcoholic beverages and tobacco (5 percent); health (5 percent) and communications (4 percent). Furnishings, household equipment, education and other goods and services account for the remaining 16 percent.

Ireland Unemployment Rate

In Ireland, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force.

Ireland Government Dept to GDP

Ireland recorded a government debt equivalent to 58.80 percent of the country’s Gross Domestic Product in 2019. Generally, Government debt as a percent of GDP is used by investors to measure a country ability to make future payments on its debt, thus affecting the country borrowing costs and government bond yields.

Ireland Currency Euro

The euro is the official currency of Ireland, which is a member of the European Union. The Euro Area refers to a currency union among the European Union member states that have adopted the euro as their sole official currency. In Ireland, interest rate decisions are taken by the Governing Council of the European Central Bank.

Ireland Stock Market (ISEQ)

The Ireland Stock Exchange Overall Index (ISEQ) is a major stock market index which tracks the performance of all (excluding UK registered) companies listed on the Irish Stock Exchange. It is a capitalization-weighted index. The ISEQ has a base value of 1000 as of January 4, 1988.

Ireland Ease of Doing Business

Ireland is ranked 24 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of Ireland deteriorated to 24 in 2019 from 23 in 2018. The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operationstronger protections of property rights. Economies with a high rank (1 to 20) have simpler and more friendly regulations for businesses.

Ireland Business Confidence

Business Confidence in Ireland increased to -58 points in the second quarter of 2020 from -77 points in the first quarter of 2020

The ISME Quarterly Trends Survey measures the level of optimism that people who run small and medium companies in Ireland have about the performance of the economy and how they feel about their organizations’ prospects. The survey is based on responses from around 1000 SME owner managers across all sectors of the economy and is presented as a balance of sentiment for twelve indicators including: business expectations and environment, profitability, employment, sales, investment, exports and economic uncertainty. The result is a simple balance between positive and negative answers.

Ireland Consumer Confidence

Consumer confidence in Ireland fell to 52.6 in October of 2020 from 60.7 in September, reaching the lowest since September, amid growing concerns about the impact of COVID-19 restrictions on household finances and jobs. “The largest weakening was seen in consumers’ expectations for their financial circumstances over the next 12 months and likely reflects increased nervousness about the lasting impact of the coronavirus and related restrictions”, KBC Ireland chief economist Austin Hughes said.

In Ireland, the Consumer Sentiment Index survey covers a minimum of 1,100 households across all regions of the country. The questionnaire assesses respondents’ perceptions on the general economy in the previous 12 months as well as expectations for next 12 months; perceptions of recent trends in unemployment and inflation; recent trends and likely future evolution in the household’s financial situation as well as savings and major purchases intentions. The Consumer Sentiment Index is calculated as the percentage of favourable replies minus the percentage of unfavourable replies, plus 100. The indicator varies on a scale of 0 to 200; a value of 0 indicates extreme lack of confidence, 100 neutrality and 200 extreme confidence.

Ireland Bank Lending Rate

Bank Lending Rate in Ireland increased to 1.10 percent in April from 0.90 percent in March of 2020. In Ireland, the Clearing Banks Prime Rate is the rate of interest charged on loans by clearing banks to large commercial customers for short-term borrowing.

Ireland Corruption Rank

Ireland is the 18 least corrupt nation out of 180 countries, according to the 2019 Corruption Perceptions Index reported by Transparency International. The Corruption Perceptions Index ranks countries and territories based on how corrupt their public sector is perceived to be. A country or territory’s rank indicates its position relative to the other countries and territories in the index.

Ireland Credit Rating

Standard & Poor’s credit rating for Ireland stands at AA- with stable outlook. Moody’s credit rating for Ireland was last set at A2 with stable outlook. Fitch’s credit rating for Ireland was last reported at A+ with stable outlook. DBRS’s credit rating for Ireland is A (high) with stable outlook. In general, a credit rating is used by sovereign wealth funds, pension funds and other investors to gauge the credit worthiness of Ireland thus having a big impact on the country’s borrowing costs. This page includes the government debt credit rating for Ireland as reported by major credit rating agencies.

Taxation in Ireland

Ireland’s successful “low-tax” economy opens it to accusations of being a “corporate tax haven”, and led to it being “blacklisted”.  A 2017 study ranks Ireland as the 5th largest global Conduit OFC (conduits legally route funds to tax havens).

Ireland’s economy was transformed with the creation of a 10% low-tax “special economic zone”, called the International Financial Services Centre (or “IFSC”), in 1987. In 1999, the entire country was effectively “turned into an IFSC” with the reduction of Irish corporation tax from 32% to 12.5% (the birth of Ireland’s “low-tax” model). This accelerated Ireland’s transition from a predominantly agricultural economy into a knowledge economy focused on attracting US multinationals from high-tech, life sciences, and financial services industries seeking to avail of Ireland’s attractive corporate tax rates and unique corporate tax system.

Corpo- rate tax	Perso- nal income tax	VAT or sales tax	Social Security Rate for Companies	Social Security Rate for Employees
12,5%	48%	23% (goods) 9%–13.5% (services) 0% (certain items of food)	11,05%	4%

How to Start a Business in Ireland

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