Central Bank warning for UK firms planning relocation to Ireland
Banks, insurers and other financial firms will only be allowed to relocate to Ireland in the wake of the Brexit vote if they're going to have a real and substantive presence here, the Central Bank has warned.
Ireland is regarded as a potential contender for London-based firms looking to shift business to a location that will continue to allow them to sell into the EU.
The Central Bank said it is ready to engage with new business, but signalled that operations bringing little activity or staff here will not be tolerated.
Gerry Cross, Central Bank's director of policy and risk, stressed that when asked to authorise a firm in Ireland, the Central Bank will only give the green light to a business, or a line of a business, that will be run from Ireland. "We will expect there to be substantive presence," Mr Cross said.
Mr Cross said the regulator will want to ensure that the board and management of the business are located here. He said officials in Dame Street will want to be satisfied that the "mind and will" of the entity are based in Ireland, and that decisions are being made from here.
"It would not make much business sense to place a disconnected head in Ireland while the operations are run and the business is conducted elsewhere," Mr Cross told a Brexit briefing organised by Deloitte last night.
Competition has been growing among certain EU capitals looking to lure firms from London as a result of the referendum result, with Paris, Frankfurt, Luxembourg and Dublin among the contenders.
The French government pledged within days of the result to make its tax regime for expatriates among the most favourable in Europe. And last week the 'Financial Times' reported that French authorities will simplify the process of registering financial companies, with officials accepting legal applications which are written in English.
Central Bank deputy governor Sharon Donnery has defended the regulator's authorisation process, saying it is not slower at processing authorisations for new financial firms than EU rivals.
Mr Cross said the length of time differs depending on the firm.
For funds licensing, the turnaround is a matter of days. Other areas could take months, he said. And he said just because a firm is already licensed in the UK doesn't mean it can simply be fast tracked in Ireland.
"This is not a process that can be short circuited simply because the entity may previously have been authorised elsewhere," Mr Cross added.
It came as UK Chancellor Philip Hammond attempted to reassure businesses and investors in the UK by pledging the British government would do whatever is necessary to protect the country's economy from "turbulence" during the Brexit negotiations.
Mr Hammond sought to reassure businesses and consumers - whose continued investment and spending fuels economic growth - that he would act to if needed. The pound hit a three-year low against the euro yesterday in the wake of the prime minister's comments that Article 50 would be triggered by March.