Guidance

Overseas business risk: Ireland

Updated 17 February 2021

Updated February 2021

1. Political and economic

1.1 Economic

Ireland is a small and open economy with a strong reputation for attracting foreign direct investment. Ireland ranks 24th in the World Bank’s Ease of Doing Business Index 2020 (UK 8th).

Companies have been drawn to doing business in Ireland for a number of reasons including: access to the EU single market, its well-educated and English speaking workforce, low corporate tax rate, common law legal system and strong regulatory system.

Prior to onset of the coronavirus pandemic in 2020, Ireland was one of Europe’s fastest growing economies. Since then, lower tax revenues and COVID-19 income supports have resulted in a spike in public indebtedness. GDP growth in 2020 was 3% and projected GDP growth for 2021 is 3.4%. However, most economists look at the employment rate as a more accurate economic trend indicator because of the large FDI inflows that can skew GDP. The unemployment rate rose from 5% in 2019 to 16% in 2020, and is forecast to be 11% in 2021.

The UK is Ireland’s largest trading partner. Some supply-chain challenges and non-tariff trading barriers have also emerged during the transition to UK-EU Trade and Cooperation Agreement terms in early 2021. Respected sources forecast that the Consumer Price Index may increase by up to 2% as a result.

A reopening of the economy in 2021 would alleviate the pressure on the sectors hardest hit by COVID-19, thereby setting the public finances on the right track and generating the breathing space to boost trade and investment. In the interim, Ireland’s economy will be supported by lower sovereign yields and resilience in both corporate tax receipts from multi-nationals and income taxes (accounting for 60% of tax revenue combined in 2020). In addition to COVID-19 business support schemes, the Government will also establish a €3.4 billion recovery fund with a focus on infrastructure projects, reskilling and training to support investment and jobs.

Overall, Ireland has made substantial economic commitments to public infrastructure in the areas of healthcare (€22 billion in 2021) and transportation (€116 billion through to 2040) over the next years. In addition, the Government has ambitious energy targets to generate 70% of electricity from renewable sources by 2030; providing investment and commercial opportunities for sectors such as offshore wind.

Ireland’s Department of Finance produces regular macroeconomic forecasts and reports regarding the potential impact of COVID-19 and the UK’s departure from the EU on the Irish economy.

1.2 Politics

Ireland is a stable democracy. The last general election took place in February 2020 and resulted in Sinn Féin, Fianna Fáil and Fine Gael winning 24.5%, 22.2% and 20.9% respectively. In June 2020, Fianna Fáil, Fine Gael and the Green Party entered coalition on the basis of their Programme for Government: Our Shared Future. Fianna Fáil leader Micheál Martin was appointed as Taoiseach and formed a new government. The parties agreed that on 15 December 2022, the Fianna Fáil leader would resign and be replaced as Taoiseach by the Fine Gael leader. Sinn Féin is now the largest opposition party. The next general election must be held by February 2025.

2. Human rights

In June 2014, the Irish government committed to developing a National Plan to support the implementation of the UN Guiding Principles on Business and Human Rights and to provide Irish companies with guidance on how to ensure respect for human rights in their activities. Updates on the National Plan are provided by Ireland’s Department of Foreign Affairs and Trade.

In 2016 the UN Human Rights Commission conducted a Universal Periodic Review (UPR) of Ireland’s human rights record. The UPR review process allows countries to highlight the steps they have taken to fulfil their human rights obligations and to promote human rights in their countries. States also offer recommendations to other States with a view to improving their human rights situations.

In its opening statement Ireland identified a number of human rights priorities for the country: tackling homelessness; creating more non-denominational schools; reviewing legislation for hate crime; developing a national action plan on trafficking; improving early years for children; introducing paternity leave and producing a national women’s strategy to reduce discriminatory pay and gender systems.

The Irish Human Rights and Equality Commission (IHREC) is Ireland’s national human rights and Equality institution. It is an independent public body that has an ‘A’ status as a national human rights institution. The purpose of the IHREC is to promote and protect human rights and equality in Ireland and build a culture of respect for human rights, equality and intercultural understanding.

3. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial organisation carrying out business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

According to Transparency International’s Corruption Perceptions Index, Ireland ranked 20th in 2020 (the UK was 11th).

4. Terrorism

See the relevant page of the FCDO’s travel advice for Ireland.

5. Protective security

Most visitors to Ireland experience no difficulties during their stay, providing they take sensible precautions as would be advisable in any developed country. See the FCDO’s travel advice for more details.

6. Intellectual property

See Irish Patents Office for information on intellectual property in Ireland.

7. Contact

Contact the Department for Business and Trade (DBT) team in Ireland for further information.

You can also view DBT’s exporting to Ireland guide.