A NEW report, released today, lauds Ireland’s recent performance in attracting foreign investment and asserts that this will be sustained over the remainder of 2010.
The report, published by the Vale Columbia Centre on Sustainable International Investment in New York, attributes an increase in inflows of foreign direct investment (FDI) in 2009 and early 2010 to a number of factors.
These include: higher reinvestment by foreign companies of the profits they book in Ireland; changes in business taxation in 2010; growing success in attracting knowledge-intensive investment; and lower business costs as a result of the recession.
On the latter point it states that “the current crisis has had the paradoxical effect of increasing Ireland’s attractiveness as a location for FDI”.
The report goes on to describe as “important measures” recent legislative changes which enhance the attractiveness of Ireland for companies involved in developing and managing intellectual property. Increased tax credits for research and development investment and the introduction of a payable credit are cited.
It also points to new measures that should allow Ireland to compete in attracting international holding companies.
It goes on to say that “while the country offers tax advantages for holding companies, it is not, unlike some other destinations, seen as a tax haven, thus increasing the attractiveness of Ireland as a sustainable location”.
The report says that as Ireland is a centre of “shadow banking” it has suffered the loss of some entities operating in that sector since the eruption of the financial crisis.
Overall, however, most of the internationally traded financial services niches in which Ireland specialises have suffered only to a limited extent according to the report.
