What the future looks like for FDI in Ireland

Joanne McEnteggart, Managing Director, First Names Group, takes an in-depth look at emerging trends in FDI.

PARTNER CONTENT IN ASSOCIATION WITH FIRST NAMES GROUP

Ireland has a long and successful track record in attracting foreign direct investment (FDI). In 2018, the nation has continued to lead the world, for the seventh consecutive year, in attracting high-value investment, generating substantial inward investment with strengths in key high-value sectors such as ICT, financial and business services and life sciences, according to IBM’s 2018 Global Locations Trends report. The IDA has also reported strong results for the first half of 2018, with the number of projects increasing from 114 to 139 compared to the same period of the previous year.

More broadly, the role of Ireland in facilitating investments was highlighted in a research report by SEO Amsterdam Economics, commissioned by the Investment Facilitation Forum, in May, which identified Ireland as a large player in global FDI stocks in 2016, comprising 3% of the global total in inward and outward stock terms. The country’s appeal as an investment destination has also received a recent boost from buoyant economic forecasts, with the Bank of Ireland revising its GDP growth forecast upwards to 6.5% in July.

In terms of emerging trends this year, at First Names Group we’re seeing a lot of technology companies – primarily from North America – coming in and providing complementary services to the big players who already have a presence in Ireland, as well as new entrants in pharmaceuticals, who are outsourcing their manufacturing to Irish firms. So what are Ireland’s prospects for the year ahead?

Preparing for challenges ahead

Tax is always an important issue on the investment landscape, and Ireland now has to take account of the implications of President Trump’s sweeping tax reforms on the one hand, and a possible digital sales tax on the other, emanating from either the EU or the OECD. It is welcome news, therefore, that Facebook has just confirmed its expansion in Dublin, with Gareth Lambe, Head of Facebook Ireland, saying that “Ireland is one of the best places in the world to be a technology company and we’re investing here for the long term”.

Providing certainty to investors is vital, and the Corporation Tax Roadmap adopted in September will reassure investors that Ireland’s longstanding 12.5% rate will not be changing.

Riding the waves of Brexit

As Brexit day looms closer, Ireland is in pole position to make gains. The fDi Report 2018 shows that the number of sales offices set up in Ireland in 2017 increased by 78.6%. In the funds industry, recent adjustments to the popular Irish Collective Asset-Management Vehicle (ICAV) are enabling Irish alternative investment funds to pursue expanded strategies, while the ongoing reform of the Investment Limited Partnership (ILP) holds future promise. Meanwhile, Ireland’s continued membership of the EU means that asset managers can continue to avail of the benefits of marketing funds across borders through the EU ‘passporting’ regime, a European talent pool and a harmonised data protection regime.

Keeping on the right track

So what can we do to keep the FDI flowing in Ireland’s direction? For me, human capital is one of the most critical factors that will keep investors coming to our jurisdiction. In a rapidly changing environment, where rules and regulations are constantly in flux, it is important to have the right people lined up to effectively service client demands.

In our own case, at First Names Group, we are better placed than ever before to support the corporate service requirements of our increasingly globalised clients. Following our recent acquisition by SGG Group, we are now part of the world’s fourth largest independent investor services firm with a global network of offices in 22 jurisdictions worldwide.

As the market continues to consolidate, the race is on to provide high quality services to international investors and firms to keep them coming to our shores. We look forward to playing our part in accompanying investors on their Irish journey to continued success and we predict a bright future ahead.

First Names Group is a leading independent provider of trust, corporate, real estate and fund administration services, operating in multiple strategic locations worldwide. We deliver bespoke structuring and administration solutions to an international client base including multinational companies, institutional investors, entrepreneurs and ultra-high-net-worth families.