While Ireland is currently enjoying a period of significant economic growth, Brexit – the UK's decision to exit the EU – poses a number of challenges and risks, and continues to dominate any assessment of the Irish economy. With Brexit still a 'known unknown' in terms of the timing and manner of its conclusion, Ireland has been keen to position itself as a location of choice for UK companies and new entrants seeking access to the EU post-Brexit.

This guide will identify those issues that are currently of note in the market across a number of practice areas and that are relevant to companies wishing to do business in and through Ireland.


Ireland was the fastest growing economy in the Eurozone in 2018 and is predicted to reach close to full employment 2019. 81,000 new jobs were added to the Irish economy 2018-19, with Ireland recording 27 consecutive quarters of reducing unemployment. Inward investment continues to be a key driver of economic growth, with core support from the Irish government and its inward investment promotion agency, IDA Ireland. The USA, in particular, remains an important source of foreign direct investment in Ireland, with US companies alone accounting for over 155,000 jobs in Ireland and a further 100,000 indirect employees are estimated to be supported by US companies. 2018 was also the second consecutive record-breaking year for new company start-ups in Ireland. The most popular start-up industry was professional services, which accounted for 4,575 of all company start-ups, with the financial sector a close second.

While the value of Ireland-linked M&A activity fell significantly in the first three months of 2019 to just EUR2.1 billion from EUR20 billion in the first quarter of 2018, reflective of a sharp decline in global M&A activity, activity in M&A almost doubled in 2018 from the previous five years. There were 162 deals completed in 2018 in Ireland compared to 83 completed in 2013. Financial services accounted for 45% of the EUR7 billion worth of deals that were concluded in 2018 (a welcome Brexit dividend), up from 10% of the total value of all M&A activity in 2013. Other industries showing robust levels of M&A activity in Ireland in 2018 included the pharmaceuticals, medical devices, life sciences, agrifood, betting and gaming sectors.

Activity in private equity has also continued to ramp up in recent years, with 34 transactions completed in 2018 compared to the 15 registered in 2013. Mid-market activity (deals between EUR5 million and EUR250 million), despite Brexit uncertainty, continued to be a key driver in M&A activity in 2018 in Ireland. Debt was the primary source of deal funding in 2018 in Ireland, with attractive terms, flexible instruments and the presence of new lenders in the market.


A key component in attracting inward investment into Ireland is Ireland's competitive corporation tax regime. Ireland's international tax strategy focuses on three pillars: certainty, stability and transparency – key elements that multinationals look for in business planning. Ireland's stable and low corporation tax rate (12.5% trading rate) is one of the cornerstones of Ireland's strategy for attracting foreign direct investment and has applied to all trading activities since 2003. It is a key factor in creating employment and generating economic activity. Successive governments have reaffirmed Ireland's commitment to its 12.5% corporation tax rate on an annual basis in clear and robust terms.

The international tax landscape has changed considerably in recent years as jurisdictions, including Ireland, take co-ordinated steps to address mismatches in the international tax system and counteract aggressive tax planning. As an active participant in the Organisation for Economic Co-operation and Development (OECD) and an EU member state, Ireland, along with all other EU member states, is undertaking a process of corporation tax reform to ensure that its corporation tax code is in line with international best practice.

At EU level, member states have worked together to agree legally binding instruments to introduce key actions identified in the OECD BEPS (base erosion and profit shifting) project of corporation tax reform in a consistent manner. Similar to all EU member states, Ireland has signed up to two Anti-Tax Avoidance Directives (ATAD) that require the implementation of a number of new measures into the Irish tax code. To date, Ireland has introduced an ATAD-compliant exit tax and controlled foreign company (CFC) rules, with legislation for hybrid mismatches (and potentially an interest limitation rule) expected in Budget 2019. An announcement as to the implementation date for the interest limitation rule in Ireland is expected in July 2019 and is likely to be either 1 January 2020 or 1 January 2021. From the perspective of multinationals setting up operations in Ireland, these measures will provide further comfort that Ireland's corporation tax system continues to be transparent, stable and in line with international best practice.

Much of the OECD's BEPS project was focused on substance and seeking to align where profits are generated with where they are taxed. As part of the BEPS project, the OECD developed a Multilateral Convention (MLI) to tackle treaty abuse that became effective on 1 July 2018. The MLI transposes a number of measures countering treaty abuse into thousands of bilateral tax treaties across the OECD network. Increasingly, businesses are seeking to ensure that substance is evident throughout their global operations. Ireland offers stability, EU and Eurozone membership, a highly skilled workforce and an internationally recognised common law legal system, each of which bolsters the case for locating substance in Ireland.

Enhancing substance in Ireland is evident in recent moves by companies such as LinkedIn, which announced in June the creation of 800 new jobs in its Dublin EMEA (Europe, Middle East and Africa) headquarters; Stripe, which, following the March 2019 acquisition of an e-money licence, plans to create hundreds of new engineering jobs; and Boston Scientific, which has recently invested EUR60 million in its Galway operations, with an expected 250 people to be in place by the end of 2019.

Meanwhile, a critical issue for UK-based financial services organisations is the real potential of losing the ability to sell services across the EU post-Brexit. From a tax perspective, Ireland is well positioned to facilitate such businesses and the Irish government in its IFS 2025 Strategy reaffirmed its commitment to maintaining Ireland's position as a top-tier location of choice for specialist international financial services. By way of example, the Irish funds industry services over EUR4.1 trillion of assets under administration, 18 of the top 20 global asset managers have Irish-domiciled funds and Ireland is the No 1 location worldwide for alternative investment funds. The success of Ireland's position as a leading global fund jurisdiction has been supported by a specific tax regime that treats Irish regulated funds as tax neutral.

Ireland is also an attractive location for the development, holding and exploitation of IP, with a developed IP tax regime that encourages both the creation and management of IP through access to the 12.5% corporation tax rate, tax deductions for IP costs, availability of the 25% R&D tax credit and an OECD-compliant patent box regime, the Knowledge Development Box (KDB). The KDB provides for an effective 6.25% corporation tax rate in respect of income arising from certain qualified assets, comprising mainly certain patented inventions and copyrighted software.

Furthermore, Ireland too is widely recognised as a leading centre for aircraft financing and leasing. Fourteen of the top 15 global aircraft lessors are based in Ireland and Irish leasing companies manage assets valued at over EUR159 billion, which is equivalent to 63% of the world's fleet of leased aircraft. The availability of the 12.5% corporation tax rate, an extensive double tax treaty network, tax-efficient deductions, broad exemptions from withholding tax and an aviation-specific exemption from stamp duty all contribute to maintaining Ireland's position at the forefront of the global aviation industry.

Financial Regulation

Brexit continues to dominate activity in the financial regulatory sector as international financial service providers consider their contingency and relocation planning. Companies seeking to avail of or retain the benefits of an EU financial services authorisation see Ireland as an obvious choice. The ability to seamlessly exercise the right to 'passport' regulated financial services into other EU and EEA member states is a key driver of the Central Bank of Ireland's receipt of over 100 Brexit-related authorisation applications, spanning all sectors of EU-regulated financial services activity. These include applications for authorisation as credit institutions, Markets in Financial Instruments Directive (MiFID) investment firms, fund management companies, insurance undertakings and E-money/payment services (including FinTech) firms.

This ability to passport financial services, together with retaining the benefits of a familiar common law system, an educated English-speaking workforce and a favourable tax environment combine to make Ireland an attractive base of operations for 'Brexit migrant' UK-based firms seeking to maintain EU access.

Firms establishing in Ireland take comfort in the country's commitment to the EU. There is no credible 'leave' movement in Ireland and there is strong public support for long-term continued membership of the EU. The increased number, scale and complexity of financial services firms operating in the Irish market creates a large number of opportunities for professional advisory firms also, with new complex business models such as large broker-dealers and multilateral trading facilities now establishing in Ireland.

The regulatory requirement for these 'Brexit migrant' firms to demonstrate sufficient substance in Ireland has led to a further increased inflow of highly skilled financial service professionals, along with significant demand locally for financial service professionals, particularly in areas such as risk and compliance.

Brexit aside, the past 12 to 18 months have seen clients faced with an unprecedented level of regulatory change. Regulated financial service providers have been managing the implementation of a range of EU-driven financial services legislation, including MiFID II, the second Payment Services Directive and the fourth and fifth Money Laundering Directives, as well as the General Data Protection Regulation (GDPR). Firms are already beginning to look towards upcoming changes to the prudential frameworks for investment firms and credit institutions, and new outsourcing rules that will inform future regulatory change projects.

Each of the above directives and regulations has required regulated firms to undertake detailed and complex regulatory change projects to ensure that compliance with these new rules can be achieved and demonstrated. However, regulated financial service providers are not the only entities impacted. The continued expansion of regulation into areas of financial services activity that would have traditionally been seen as 'unregulated' in Ireland (such as commercial lending and asset finance) has driven increased focus and upskilling on compliance issues by firms operating in this space. The implementation of GDPR and the fourth and fifth Money Laundering Directives are two examples of regulation impacting beyond the traditional regulated financial services sector. Other relevant examples include the establishment of Ireland's Central Credit Register and the expansion of Ireland's domestic credit servicing regime with entry into force of the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018.

Greater scrutiny from regulators is also a fact of life, with the Central Bank of Ireland undertaking more regulatory investigations and issuing more and larger fines and sanctions than ever before. Recent examples include a record-setting fine of EUR21,000,000 for consumer protection breaches by a domestic credit institution. Other areas of focus include anti-money laundering, conduct risk, outsourcing, the fitness and probity of senior staff in regulated financial services firms and the related upcoming introduction of a Senior Executive Accountability Regime that will mirror a similar regime in the UK.

Litigation and Dispute Resolution

International focus on the efficiency of the Irish courts system has increased as a result of Brexit, with a noticeable increase in the utilisation of the Irish courts for EU cross-border merger applications. Irish governing law and jurisdiction clauses are also increasingly being added in commercial contracts as an alternative to English law and the jurisdiction of the courts of England and Wales.

The Irish judiciary has an international record of integrity, commercial awareness, fairness and impartiality. The changing nature and demands of international business have been recognised in recent years through the set-up of a fast-track Commercial Court in 2004, a dedicated Competition list and the adoption of the UNCITRAL Model law in the Arbitration Act 2010. Irish judicial decisions are recognised and enforced throughout the EU and as an EU member state Ireland benefits from the uniform interpretation of rules regarding jurisdiction and choice of law, and the ability for other legal procedures in Ireland to be recognised and enforced throughout the EU, including insolvency proceedings where the debtor's "centre of main interests" is in Ireland. Investment is being made in the Irish Commercial Court to reduce wait times, with the number of Court of Appeal judges set to increase from nine to 15.

In 2018 the Bar Council of Ireland, the Law Society of Ireland and various commercial law firms launched an initiative aimed at promoting Ireland as a leading centre globally for international legal services. Formal recommendations made to government through this initiative include the establishment of dedicated specialist courts and judges such as an Intellectual Property court and a Financial Services court (similar to those in London), and increased investment in the Courts Service, in particular on the IT side for users of the court system. The Minister for Justice and Equality announced at the beginning of 2019 that this initiative had the formal support of government and would form a key component of its Brexit strategy.

Access to third-party professional litigation funding for large commercial litigation cases is also needed if Ireland is to compete with other common law jurisdictions. Commercial litigation is costly, particularly having regard to the cost of discovery of documents. Currently, third-party professional litigation funding agreements are unlawful in Ireland on grounds of maintenance and champerty. However, recent judicial comments have stressed the need for the legislature to examine this area urgently and the President of the Irish High Court is currently chairing a committee reviewing the civil justice system, including issues relating to access to justice, which is expected to report in late 2019 or early 2020.

Ireland's statutory advisory expert body, the Company Law Review Group (CLRG), has also recommended that Ireland sign up to the UNCITRAL Model Law on cross-border insolvency. Ireland is one of the few common law jurisdictions that has not yet signed up to this important convention, which deals with insolvencies that span several jurisdictions. Enforcement and recognition of insolvency proceedings as between the other EU member states and Ireland is provided for under the European Insolvency Regulation (Recast). Nevertheless, as the UK is Ireland's closest trading partner, Brexit has accelerated the importance of Ireland signing up to this convention. It is anticipated that the government will heed the recommendation from the CLRG and adopt the convention in the near future.

Real Estate

The resurgence of the Irish real estate sector has been a notable development since its collapse in the wake of the global credit crisis in 2008. Office and student accommodation have been particularly strong in recent years, with the flourishing tech sector accounting for 50% of office take-up in 2018. Facebook, Google and Salesforce led the charge on this front as they sought out new EMEA headquarters in Dublin. The burgeoning co-working sector also expanded its foothold and, according to the Deloitte Crane Survey 2019, accounted for 14% of take-up, with further growth expected in 2019. The entry of the WeWork brand into the Irish market introduced strong competition to the other domestic and global service providers already present in the market.

Interest in private rental, or Build-To-Rent (BTR) schemes, is a notable trend in 2019. This is the development of purpose-built rental accommodation designed for the long-term rental market and professionally owned and managed by institutional landlords. The combination of high rents, high property prices and strict Central Bank of Ireland rules on borrowing have created prime conditions for the establishment of BTR schemes. This is highlighted in Dublin, where the average house price has been reported in the national media to be nine times the average annual salary, forcing first-time buyers to rent for longer periods. Investors are attracted to the BTR model as it provides a stable and secure real estate asset that does not suffer from the cyclical nature of the more traditional office and retail sectors. It has been reported that an estimated EUR7 billion has been earmarked for investment in this area.

While the first six months of 2019 have seen house prices decrease, there has been a dramatic increase in planning applications for BTR developments. It was reported that over five days in May 2019 more than 6,000 residential property applications were made, with the vast majority being for the BTR space. This represents one third of the total residential units built in Ireland in 2018.

Various measures taken by the Irish government have facilitated the expansion in this area. The vacant site levy was introduced in the Urban Regeneration and Housing Act 2015 to encourage property owners to bring vacant sites back to the market. The Planning and Development (Strategic Housing Development) Regulations 2017 allow developers to fast-track large-scale housing developments of 100 units or more and the Urban Development and Building Heights Guidelines published in December 2018 have lifted the restrictions on building heights, allowing for high-density residential developments in urban areas. To add to this, the government has avoided introducing any long-term rent controls that might act as a deterrent to the BTR investors, although it did introduce rental increase restrictions in rent pressure zones in the Planning and Development (Housing) and Residential Tenancies Act 2016. The Residential Tenancies (Amendment) Act 2019 that was signed into law on 24 May 2019 brings further change to the sector with the introduction of penalties for non-compliance with rent increase restrictions in rent pressure zones as well as rules on Airbnb-style lettings. The availability of high-quality office space and residential accommodation in Dublin is also a consideration featuring in companies' Brexit planning.


Finally, in the context of employment, a number of trends and developments are apparent as a result of continued economic growth and increased employee mobility.

With the Irish economy predicted to reach close to full employment in 2019, the growth in highly skilled job creation and full-time employment in particular has been significant. As recruitment and retention becomes more difficult, there has been a shift in focus towards flexible working arrangements, work-life balance, long-service sabbaticals, diversity and inclusion, and a reassessment of compensation and benefits packages. A reverse 'brain-drain' is taking place, with highly educated and skilled migrants returning to Ireland. Employers are having to offer relocation packages, sign-on bonuses and, sometimes, housing in order to attract talent from overseas.

As Brexit and other factors could lead to an economic slow-down, Irish employers still need to exercise caution. Creative approaches such as seconding existing employees within organisations during growth phases rather than permanently increasing headcount is an increasing practice. Improving employee benefits, on a discretionary basis without contractual guarantees, is becoming the norm. To reduce fixed labour costs, an increasing number of larger employers are offering employee participation in tax-efficient share option/profit-sharing schemes that lapse at the end of the employee's retention period.

According to Ibec, on the basis of 2016 census data, just over 47% of the Irish population is aged 35 or below. Thus, managing 'millennials' in the workplace has become a hot topic. Learning and development, mentoring programmes and training employees how to receive and give performance feedback are recent features. Money is not everything for this demographic and employers are offering flexible hours, corporate social responsibility programmes, gym membership, corporate discounts, the ability to buy extra days paid leave through salary deductions and other voluntary benefits that employees can tailor to their personal circumstances.

Flexible working means increased use of technology to connect outside the workplace. Irish employees cannot opt out of the maximum average working week of 48 hours and employers are required to have appropriate mechanisms in place to record time worked and rest breaks taken by their employees. The fact that an employer is unaware or ignores that an employee is working more than the maximum hours is irrelevant. In order to demonstrate compliance, employers are introducing policies on working time, flexible working arrangements, after-hours working and the right to disconnect.

The Employment (Miscellaneous Provisions) Act 2018 commenced in March 2019 and makes a number of significant changes to employment rights legislation. For example, under the Act, five core terms must be communicated to employees within five days of commencing employment, with full written terms to be provided within two months of the commencement date. Separately, the Act prohibits 'zero hours' contracts (except in very limited circumstances) and employers can no longer demand employees be available for work as and when required without providing them with a specific band of weekly hours. Guidance is expected but in the meantime employers must proceed with caution.

The Gender Pay Gap Information Bill 2019 is another notable development and, once enacted, will require employers to publish information relating to the remuneration of their employees and to show whether there are differences referable to gender, and, if so, the size of such differences. If there are pay gaps, employers will need to explain the reasons and the measures taken (or proposed measures) to eliminate or reduce the gaps, with the cost of doing so taken into account. It will be interesting to see how this will affect the extent of reporting in practice.

In general, Ireland continues to have a business-friendly legal regime without works councils and minimal obligations to collectively consult employees, except in collective redundancy and TUPE situations. There is no automatic obligation on Irish employers to recognise or negotiate with trade unions although employees have the right to join them. While the threat of injunctions to restrain investigations, disciplinary processes and dismissals continues to be a feature of Irish employment law, overall, Irish employment or labour law is considered to be more balanced than the laws of many other European jurisdictions.


Looking forward to 2020, the impact of Brexit, as well as the specifics of many new entrant firms' 'go-live' planning, will hinge on Brexit developments after 31 October 2019, the UK's current scheduled departure date from the EU. In the meantime, Ireland continues to position itself as a location of choice and the themes of strong economic growth, political stability, a robust legal system and regulatory frame-work, and a competitive tax regime, along with a continued commitment to the EU, are core elements of Ireland's value proposition to investors.

Originally published in Chambers Global Practice Guide 2019.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.