Wednesday 23 January 2019

IDA confident of getting Brexit spoils despite deterrent of high personal tax

IDA CEO Martin Shanahan. Photo: Mark Condren
IDA CEO Martin Shanahan. Photo: Mark Condren

Gretchen Friemann and Ellie Donnelly

HOUSING shortages and high personal taxes are among the principal turn-offs for international companies considering investing here, according to the IDA.

However, Martin Shanahan, the agency's CEO, said multinationals were "overwhelmingly positive" about Ireland and insisted that the country was "well placed" to win more financial-services jobs in the wake of Brexit.

The IDA said that new investments attracted in the first six months of 2017 would lead to the creation of 11,000 jobs, despite persistent uncertainty about the structure of the UK's divorce from the EU and potential tax changes in the US.

Just under 2,200 direct new jobs in IDA-supported firms were announced in the first half of the year, split roughly 50-50 between Dublin and the rest of the country.

Launching its interim results, Mr Shanahan said the investment figure was at the same level as the first half of 2016, but that job-creation was 22pc higher.

However, the agency provided little clarity on how many firms will enter the country on the back of Brexit. Mr Shanahan said many companies were likely to eschew any publicity, preferring their arrival in Ireland to remain unheralded.

He also provided little insight into the calibre of the Brexit-related jobs, despite mounting fears that Ireland is largely attracting lower-paid, back-office roles, while the more upscale, capital markets jobs flow to cities like Frankfurt and Brussels.

At the launch of the agency's mid-year results and annual report, the Tánaiste and Minister for Enterprise and Innovation, Frances Fitzgerald warned against complacency over Ireland's relatively high levels of FDI, stressing: "We must continually up our game".

But she added that in the face of the twin challenges from Brexit and possible US tax changes, the IDA had managed to maintain the same "high level" of investment as in 2016.

She also dismissed suggestions that the Central Bank's attitude had weighed on Ireland's ability to win Brexit spoils, saying the country had learned the "hard way" about "the importance of regulation."

Mr Shanahan added that after an initially slow start to the year in response to the geo-political uncertainties, multinationals were now pressing ahead with decisions.

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