BDO LLP | INTERNATIONAL TECH HUBS SECOND EDITION
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11 INTERNATIONAL TECH HUBS SECOND EDITION | BDO LLP
to 6.25% on certain IP exploitation if developed within Ireland. The domestic tax legislation allows for generous exemptions on outbound withholding tax in relation to dividends, interest and royalties; Ireland also has an expanding network of over 70 double tax agreements, with several more under negotiation. Additionally, IDA Ireland– the nation’s FDI government support arm that provides R&D grant funding and employment grants – targets non-Irish businesses to encourage them to use Ireland as a springboard for international expansion. This resolves the problem of Ireland’s relatively small market, and establishes a supportive route for emerging technological companies to flourish. Businesses coming into the market - particularly American private corporations – should be aware that there is a requirement for audited accounts in Ireland and the filing of these at the Irish Companies Registrations Office makes this information publicly available for third parties.
OF THE CONTINENT OFFERS TECH BUSINESSES ACCESS TO IRELAND’S DISTINCTIVE POSITION AT THE DOORSTEP 250 MILLION PEOPLE ACROSS EUROPE.
THE INVESTOR ANGLE Despite its relatively diminutive size, Ireland commands an impressive level of interest from international capital. It is the first choice for foreign direct investment from US tech companies, leading to its reputation as a formidable European tech hub. With incubators, start-up funds, R&D support and more, angel investor groups are able to find well-supported tech innovators with ease. Aside from the US, the UK is also another source of funding; European investors primarily come from France, Germany, the Netherlands and Scandinavia. Whilst there is little doubt that Ireland’s attractive corporate tax rate brings in significant interest, the connections within the foreign direct investment scene are uniquely collaborative, and foster a strong sense of community within the space. DESPITE ITS RELATIVELY DINIMUTIVE SIZE, IRELAND COMMANDS AN IMPRESSIVE LEVEL OF INTEREST FROM INTERNATIONAL CAPITAL.
THE TALENT POOL Ireland’s distinctive position at the doorstep of the continent offers tech businesses access to 250 million people across Europe. Despite its relatively smaller population, Ireland’s connections have led to an influx of tech talent availability, even though there is significant competition for skilled employees. The Irish government offers investment and support for STEM- related college courses, and has put in place measures to reduce income tax rates for key staff who relocate to Ireland to join tech businesses. THE GOVERNMENT SUPPORT Ireland’s vibrant tech ecosystem is backed by several government bodies including, the IDA, Enterprise Ireland and the sovereign wealth fund ISIF. These organisations have seeded the majority of the venture capital and growth capital funds in Ireland over the last 25 years, providing fertile ground for tech innovation. Their interest has led to further investment from global funds, who in tandem with local investors are supporting the growing tech scene and widening the international institutional investor base. Businesses are likewise attracted by Ireland’s 12.5% corporate tax rate and a very solid R&D regime that allows for a refundable tax credit. The government has put in place tax depreciation for the acquisition of IP, and is also encouraging the use of the Knowledge Development Box, which can reduce the tax rate
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