Ireland’s inward investment promotion agency, the IDA, is a non-commercial, semi-state body promoting foreign direct investment into Ireland through a wide range of services. In an interview with BusinessLine , Martin D. Shanahan, CEO of IDA Ireland, talks about how the agency is trying to attract Indian companies to invest in his country, the impact of Brexit and changes in US policy on outsourcing.

What has been the outcome of your whistle-stop tour of India? How are Indian companies responding to your overtures?

My main purpose of visiting India is to meet companies which have already invested in Ireland and seek their feedback; talk to companies which are planning to invest there. At present, 70 per cent of direct investment into Ireland comes from the US, 20 per cent from Europe and the rest from Asia-Pacific. We want to grow that number. We have companies such as Mphasis, TechMahindra, Wipro and Mindtree and there are companies in the pharma space as well which have presence there. Currently, there are 40 Indian companies operating in Ireland and they employ about 5,000 people.

Are all the 5,000 employees Irish?

We have full mobility in the European Union and a flexible work permit regime. Many of the Indian companies, who start their operations in Ireland, get their senior management to work there for sometime, which is fine with us. But within two years, they need to hire 50 per cent of their staff from Ireland and Europe. We have made some changes to the work permit. Overseas students, post their studies, can work in Ireland for a period of two years. While other countries are putting restrictions, we want to continue to attract talent from outside. There are companies in Ireland which are there to get access to European markets. This helps them grow their companies. It is positive for Ireland, for the Europe and for them (companies) as well.

What is the impact of Brexit on businesses in Ireland?

What we have seen so far is that there has been a huge increase in enquiries from companies who are now concerned about how they will service the European markets from UK, post Brexit. They are looking at every aspect and it is a particularly true of financial services companies. We have seen a lot of companies coming to us looking at setting up in Ireland. Last week, JP Morgan announced they are acquiring a large building in the middle of Dublin. This can house upto 1,000 people. We expect more such announcements. Also, there has been some discussion on the possible impact of the US Administration on Indian companies and what it means for the European Union and Ireland.

Can you share more details with respect to the kind of measures companies are taking because of what is happening in the US?

We have received huge amount of investment in Ireland from firms in the US but that investment is for servicing a European market. The point is that, if they have to come to Europe, they will have to come to Ireland because that is the best location from which they can do it. We have any number of global companies such as Facebook, Google, Apple, Yahoo, Intel and Microsoft here. Ireland has one of the fastest growing economy in Europe. Currently, our economy is growing at 5-6 per cent, while employment is growing at 2-3 per cent. At the moment, we are not concerned about the US Administration. But we want to watch it closely. There isn’t a lot of details about the policies. As they get introduced, we will get to know.

Do you think Indian companies may want to look at Ireland as a near shore location if the issues become aggravated in the US?

I think that is a feasible option. There are many US companies which consider Ireland near shore. There are about 1,300 multinationals in Ireland and they have a large presence in Ireland. I think there are some Indian companies which are interested in partnering with those MNCs.

What kind of incentives does the Irish Government offer to foreign companies, particularly Indian companies, if they want to set up their centres there?

The first thing we do is to help the companies understand the Irish market. We have a presence in India who work with the companies to familiarise them with Irish operations. One can register a company in about 48 hours.

We also give support for setting up R&D centres. We have one of the most competitive, consistent and transparent taxation regimes in the world. There are of course no tax holidays for foreign companies. Everybody in Ireland pay 12.5 per cent tax. We don’t plan to either increase it or decrease it. We have a very attractive taxation regime if a company is investing in setting up an R&D centre and around the amortization of intellectual property and how you write it down.

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