There is a lot of good news in the Irish tech industry. To start with, Dublin University of Technology will start courses, becoming the largest university in the country. This goes hand in hand with the fact that there are more than 100,000 people in Ireland who work in technology companies. Amazon, for example, has doubled its presence there by adding 1,000 jobs to the more than 2,500 already existing. And that’s not all, but companies of all sizes are establishing and expanding in Ireland.
Why do they choose Ireland?
These are some figures:
- There are 9 of the top 10 software companies in the world.
- 9 of the top 10 US technology companies are located.
- There are the top 3 business software companies in the world.
- And 4 of the top 5 IT service companies are located in Ireland.
Benefits Ireland offers to tech companies
Long-established tech community.
Since IBM arrived in 1956, other big-name tech firms have also arrived. The boom came when Google was established in 2003. Then came Microsoft, Dell, Intel, IBM, SAP, Facebook, LinkedIn, Twitter, HubSpot, and PayPal, to name a few. There are almost 1,000 technology companies from the superpowers to developing countries.
Even some Irish companies are also expanding beyond Green Island, such as Stripe and Intercom. They don’t just do this by taking advantage of low corporate tax rates, but for many other benefits.
Ireland has a young and highly skilled workforce: one third of the population is under the age of 25. There are approximately 1 million people in the education system full time. Three-quarters are in elementary education, and the rest are in colleges and universities. 52% of Irish aged 25-34 have a university degree, compared to an OECD average of 43%.
Its educational system is of the highest level worldwide. The WEF Global Competitiveness Report for 2016-2017 and the IMD Competitiveness Yearbook (2017) rank it in the top 10. This means that said educational system meets the needs of maintaining a competitive economy. This is because it shows a strong link between schools and companies. Graduates are expected to have the necessary skills to cover job opportunities available in the technology sector.
Access and ease of doing tech business in Europe
A great advantage of settling in Ireland is its membership in the European Union (EU) since 1973. This gives companies access to more than 500 million potential consumers. Furthermore, the EC has evolved to provide more benefits to member states. There is the free movement of goods, capital, people and services. In addition to the customs union with a common external tariff on all incoming goods.
Any company incorporated in Ireland can enjoy the free trade and customs union agreement that exists between the EU states. The euro as a single currency was established in 1999, and has grown to 19 countries. This has greatly facilitated trade within the eurozone. This is because the value of the goods and services traded is not exposed to variables or fluctuations in the currency market.
Research, development and innovation
Ireland encourages business R&D and innovation activity. This is due to the following:
- Tax credits: A 25% tax credit is available for companies that carry out R&D activities that meet the requirements. These activities include investigations or experiments in science or technology. The tax credit (which is calculated as 25% of the qualified activity expense) can be claimed in Ireland even if the work was carried out in another country.
- Tax incentives for the development of intellectual property: In 2016, the Knowledge Development Box was created to encourage the development of intellectual property assets. A tax rate of 6.25% is applied to the benefits derived from this type of activity. Any research and development activity that meets the requirements, that results in patented inventions or copyrighted software, is eligible.
- Centers of excellence: Some industries in Ireland are supported by innovation centers to help push the boundaries of progress. They are found throughout the country and range from bioengineering, IT, and communications to nanotechnology and marine science.
Are your tech business considering expanding abroad?
ISEA (Ireland-Spain Economic Association) emerged in 1989 and encourages greater openness of trade and investment between both nations. If you are interested in learning more about this topic or being a member of ISEA, contact us through our website.