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IDA Ireland
IDA Ireland (Irish: An Ghníomhaireacht Forbartha Tionscail) is the agency responsible for the attraction and retention of inward foreign direct investment (FDI) into Ireland. The agency was founded in 1949 as the Industrial Development Authority and placed on a statutory footing a year later. In 1969 it became a non-commercial autonomous state-sponsored body. Today it is a semi-state body that plays an important role in Ireland's relationship with foreign investors, with multinationals accounting for 10.2% of employment and 66% of Irish exports. The agency partners with investors to help them to begin or expand their operations in the Irish market. It provides funding support to research and development projects, and has a number of direct support mechanisms, including employment and training grants.
In the years following World War II, Ireland began moving towards a more open economic model, away from the old model characterised by import substitution industrialisation. As part of this wider push, the Minister for Industry and Commerce at the time, Daniel Morrissey, proposed the creation of a body to advise the government on industrial policy. The Industrial Development Authority was created to fill this role in 1949.
Throughout the 1950s, the IDA established its vision of 'industrialisation by invitation,' one which initiated the low corporation-tax system that remains in place in Ireland today. According to an article in a U.S. law journal in 1984, the IDA is 'probably the most powerful governmental agency in Ireland,' as it 'acts as both coordinator and lobbyist for all matters relating to manufacturing and service industries as well as the industrial infrastructure.' IDA Ireland has a large global network of branches/offices in the U.S., Europe, and Asia.
While IDA Ireland gets its funding from the Irish State (with costs circa €48m in 2017), as an autonomous non-commercial state-sponsored body, it maintains its own independent board and governance. IDA Ireland is authorised to issue grants and financial incentives to firms coming to Ireland (paying out €91 million in 2017).
The IDA has been successful in attracting multinationals to Ireland over decades. As of 2018, foreign multinationals pay 80% of all Irish corporate taxes, directly employing 25% of the Irish labour-force, and are responsible for 57% of the non-farm economic value-add in Ireland (40% of value-add in Irish services and 80% of value-add in Irish manufacturing). They comprise 14 of Ireland's top 20 firms (including tax inversions). Key "selling points" have been the young, English-speaking, flexible workforce, a strong educational system, commercially-aware third level institutions, a location which allows easy exporting into Europe, and the ability to tap into European talent in the wake of Brexit, and a 'clustering effect' in certain industrial and business sectors.[citation needed]
The IDA is strongly reliant on the U.S. as a source of FDI. There are no non-U.S./non-U.K. firms in Ireland's top 50 firms (by revenue), and only one by employees, the German retailer Lidl. The 14 foreign multinationals in Ireland's top 20 firms are all U.S-based (including tax inversions). The U.K. firms in Ireland, outside of retailers like Tesco who sell into Ireland (also like Lidl), are pre-2009 after which the U.K. changed its tax code (see U.K. transformation).
Up until 2018, the U.S. was one of the last few global jurisdictions not to run a "territorial" tax system (the U.K. switched in 2009–12). Jurisdictions with "territorial" tax systems have separate, and much lower, tax rates for foreign-sourced profits, and companies from such places therefore make less use of Ireland as a base. While the IDA market Ireland as a base from which to sell into Europe, Despite other features, some commentators see Ireland as a base for U.S. multinationals to shield themselves from the pre-TCJA “worldwide” tax system[citation needed] (Ireland is sometimes described as a corporate haven).
U.S. multinationals aside, Ireland's main attractiveness is for life sciences manufacturing, who have an optimal combination of intellectual property and tangible assets to use Ireland's main IP-based BEPS tool, the capital allowances for intangible assets scheme (which has an Irish effective tax rate of <3%).[citation needed] A key IDA Ireland target market is Japan, which is a large global source of life sciences manufacturing enterprises, and also has one of the highest corporate tax rates in the world.
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IDA Ireland
IDA Ireland (Irish: An Ghníomhaireacht Forbartha Tionscail) is the agency responsible for the attraction and retention of inward foreign direct investment (FDI) into Ireland. The agency was founded in 1949 as the Industrial Development Authority and placed on a statutory footing a year later. In 1969 it became a non-commercial autonomous state-sponsored body. Today it is a semi-state body that plays an important role in Ireland's relationship with foreign investors, with multinationals accounting for 10.2% of employment and 66% of Irish exports. The agency partners with investors to help them to begin or expand their operations in the Irish market. It provides funding support to research and development projects, and has a number of direct support mechanisms, including employment and training grants.
In the years following World War II, Ireland began moving towards a more open economic model, away from the old model characterised by import substitution industrialisation. As part of this wider push, the Minister for Industry and Commerce at the time, Daniel Morrissey, proposed the creation of a body to advise the government on industrial policy. The Industrial Development Authority was created to fill this role in 1949.
Throughout the 1950s, the IDA established its vision of 'industrialisation by invitation,' one which initiated the low corporation-tax system that remains in place in Ireland today. According to an article in a U.S. law journal in 1984, the IDA is 'probably the most powerful governmental agency in Ireland,' as it 'acts as both coordinator and lobbyist for all matters relating to manufacturing and service industries as well as the industrial infrastructure.' IDA Ireland has a large global network of branches/offices in the U.S., Europe, and Asia.
While IDA Ireland gets its funding from the Irish State (with costs circa €48m in 2017), as an autonomous non-commercial state-sponsored body, it maintains its own independent board and governance. IDA Ireland is authorised to issue grants and financial incentives to firms coming to Ireland (paying out €91 million in 2017).
The IDA has been successful in attracting multinationals to Ireland over decades. As of 2018, foreign multinationals pay 80% of all Irish corporate taxes, directly employing 25% of the Irish labour-force, and are responsible for 57% of the non-farm economic value-add in Ireland (40% of value-add in Irish services and 80% of value-add in Irish manufacturing). They comprise 14 of Ireland's top 20 firms (including tax inversions). Key "selling points" have been the young, English-speaking, flexible workforce, a strong educational system, commercially-aware third level institutions, a location which allows easy exporting into Europe, and the ability to tap into European talent in the wake of Brexit, and a 'clustering effect' in certain industrial and business sectors.[citation needed]
The IDA is strongly reliant on the U.S. as a source of FDI. There are no non-U.S./non-U.K. firms in Ireland's top 50 firms (by revenue), and only one by employees, the German retailer Lidl. The 14 foreign multinationals in Ireland's top 20 firms are all U.S-based (including tax inversions). The U.K. firms in Ireland, outside of retailers like Tesco who sell into Ireland (also like Lidl), are pre-2009 after which the U.K. changed its tax code (see U.K. transformation).
Up until 2018, the U.S. was one of the last few global jurisdictions not to run a "territorial" tax system (the U.K. switched in 2009–12). Jurisdictions with "territorial" tax systems have separate, and much lower, tax rates for foreign-sourced profits, and companies from such places therefore make less use of Ireland as a base. While the IDA market Ireland as a base from which to sell into Europe, Despite other features, some commentators see Ireland as a base for U.S. multinationals to shield themselves from the pre-TCJA “worldwide” tax system[citation needed] (Ireland is sometimes described as a corporate haven).
U.S. multinationals aside, Ireland's main attractiveness is for life sciences manufacturing, who have an optimal combination of intellectual property and tangible assets to use Ireland's main IP-based BEPS tool, the capital allowances for intangible assets scheme (which has an Irish effective tax rate of <3%).[citation needed] A key IDA Ireland target market is Japan, which is a large global source of life sciences manufacturing enterprises, and also has one of the highest corporate tax rates in the world.