05 Jan 2011   |   News

Low corporation tax continues to lure companies to Ireland

Although somewhat tamed by the economic crisis, the 'Celtic Tiger' kept winning winning significant foreign investment in 2010.

Despite its economic bust, Ireland continued to win significant foreign direct investment in 2010, with overseas companies creating 11,000 jobs, and making a total investment of Euro 500 million in R&D and Innovation. The average number of jobs per investment was double the 2009 level, when 4,615 were created, according to the annual review of the inward investment body IDA Ireland published this week.

This is despite the fact that globally foreign direct investment declined by 8 per cent, according to the OECD. In total, there were 126 investments, with 47 companies, including the telecoms company Telefonica, investing in Ireland for the first time, while HP, Accenture, Citi, Google, Facebook and Eli Lilly recruited new staff.

However, Ireland’s dire economic state did take its toll, with foreign companies cutting 9,545 jobs leaving an overall increase in jobs at IDA-supported companies of 1,352.

In total, companies that the IDA has attracted to invest in Ireland directly employ 139,000 people and account for €110 billion, or over 75 per cent of total Irish exports in goods and services. These companies contribute over €19 billion in direct expenditure to the Irish economy.

Minister for Enterprise, Trade and Innovation, Batt O'Keeffe O’Keeffe cited Ireland’s 12.5 per cent corporate tax rate and the government’s strategy of investing in science as the main attractions. “Despite the period of global recession over the past two years our value proposition to multinational firms, either operating here or choosing to hub in Ireland for the first time, remains one of the strongest in the world,” O’Keeffe said, adding, “It is clear from these results that the government’s investment strategy for science, technology and innovation is the right one to create high-quality jobs and support export-led economic recovery.”

Horizon 2020

In March 2010, IDA published Horizon 2020, its strategy for the next decade, giving its view of how the environment in which it operates will change over the next ten years, and the opportunities for foreign direct investment created by global trends.

One aim of the strategy is to encourage more companies to invest in high value R&D operations, which the IDA believes will encourage inward investors to plant deeper roots. “It has been encouraging to see that a large number of existing clients announced expansion and diversification investments. These involved skills uplift, technology uplift, RD&I in product and process, and energy initiatives or taking on new mandates in order to increase their Irish operations’ strategic importance within their parent corporations,” says the annual review.

Companies that announced expansion and diversification investments in 2010 included, HP, SAP, Google, PayPal, eBay, AOL, Eli Lilly, Merck, Stream Global Services, ServiceSource, Salesforce.com, and Accenture

Research, Development & Innovation

In 2010 the IDA won a number of high-value RD&I projects for Ireland, with over €500 million in new investment from companies including IBM (Smarter Cities), United Technologies Research Centre (Renewable Energies), Alcatel-Lucent /Bell Labs, HP, Biotrin, and Accenture’s Global Analytics Centre. Many international investors are collaborating in initiatives funded by Science Foundation Ireland.

More information: http://www.idaireland.com/news-media/press-releases/ida-ireland-end-of-year-s-4/index.xml

Never miss an update from Science|Business:   Newsletter sign-up