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Ireland's Corporate Tax Attracts US FDI

May 2011 - Corporate & Commercial. Legal Developments by Hassans.

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Ireland's competitive corporate tax regime is a distinct advantage when it comes to US firms considering foreign direct investment, placing it ahead of rival jurisdictions, according to a new survey.

The findings, compiled by Amarch Research on behalf of the Irish law firm Matheson Ormsby Prentice (MOP), were released on May 22. They form part of the MOP FDI Index, launched by this research, which is to be updated on a six-monthly basis. This first survey involved 250 Irish American business leaders in the US, and took into account perceptions of Ireland as a place to invest, attitudes towards FDI, and the factors affecting it.

29% of those questioned said that Ireland's competitive corporate tax regime was a positive attribute when considering Ireland as a location for FDI. Moreover, Ireland scored ahead of other European, Asian, Middle Eastern and African countries when it came to corporate tax rates, and the regime in general.

Ireland was considered by 58% as a good place to do business, with 32% of those surveyed saying they would be likely to set up operations in Ireland.

However, the survey did show some key concerns pervading opinions of Ireland. While 37% indicated an improved attitude towards the setting out of operations in Ireland, 20% admitted that Ireland's national financial instability was a negative factor in decision making. Eurozone instability was highlighted by 15%, and, although government incentives were praised by 17%, the same proportion also cited inefficient government as an issue.

Nonetheless, MOP was keen to emphasize the positive overall picture presented by these findings, and stress that recent bad publicity and attention given to Ireland must not detract from what remains a very active FDI market.

Managing Partner Liam Quirke said: "FDI is the cornerstone upon which our economic recovery is dependent. Ireland?s profile and reputation has taken a real battering in the midst of the global financial and economic crisis. Both domestically and internationally many have focused on the negative; this does not tell the full story... despite the period of global recession over the past two years, Ireland's offering to US multinational corporations remains one of the strongest in the world".

All the negative publicity and attention should not detract from the very real achievements in the Irish economy over the last 20 years, primarily driven by our success in attracting FDI. Ireland has continued to provide the best business environment in Europe for US corporations looking to access the EU Internal Market. The growth and development of multinationals, with their strong focus on high-value goods and services exports, is fundamental to the Irish economy and is an essential component of Ireland's economic recovery. Ireland's future economic success will depend to a great extent on its ability to sustain an attractive habitat for FDI", Quirke added.

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