With the onset of Brexit, the importance of Ireland within Europe, is likely to grow. A host of Financial Services companies, including Bank of America and Barclays Bank have chosen to address potential issues thrown up by Brexit by either expanding their existing, or setting up new, operations in Dublin.
This year Ireland’s International Financial Services Centre (IFSC) celebrates its 30th anniversary. The importance of the IFSC to the Irish economy is indisputable. Since its humble beginnings in a troubled Irish economy in the late 1980s, the IFSC has become one of the world's leading Financial Services centres.
Ireland is currently home to 20 of the top 25 global Financial Services companies including Allianz, Bank of China, Berkshire Hathaway, BNP Paribas, Citibank, HSBC, JP Morgan, Santander and Wells Fargo.
Some stats on Financial Services in Ireland
There has been lots of changes in the makeup of international Financial Services jobs in Ireland. A loss in banking jobs resulted in increases in the fund administration, insurance, aircraft leasing and payments sectors.
There are over 500 international Financial Services companies currently operating in Ireland, including 200 Irish owned companies. The total employment from these companies is approximately 38,000 with 10,000 people employed outside Dublin docklands hub.
Those companies pay over €1 billion in corporate taxes each year, with a further €1 billion going to the exchequer in payroll taxes.
Ireland currently ranks…
- 1st in the world for the flexibility and adaptability of people (IMD World Competitiveness Yearbook 2016)
- 1st in the world for finance skills (IMD World Competitiveness Yearbook 2016)
- 4th largest exporter of Financial Services in the EU
- 1 location worldwide for Alternative Investment Funds
- Over 1,100 funds, and promoters from 50 countries
- €3.8 trillion of assets under administration
- Highly for Global Aviation Leasing with 8 out of the top companies based in Ireland
Ireland has come a long way in the Financial Services community. In 1987 there were 60 people employed in companies connected to the IFSC when it first opened. This has been down to the ambitious goals set by the Irish government and agencies like the IDA.
“Ireland’s key competitive advantage is our young, highly skilled and talented workforce with expertise across all of the key areas of International Financial Services, both long-established activities and more recently emerging ones. We are also the only English-speaking country in both the EU and Eurozone with a strong track-record of working closely and successfully with businesses at Government and State Agency levels."
Eoghan Murphy TD, Minister of State for Financial Services
Dublin: destination on the rise
Based on reports since Brexit was announced, Frankfurt and Dublin seem to be the main destinations for Financial Services companies looking to relocate out of London.
According to Statista, a provider of market and consumer data, “Frankfurt is seen as attractive in terms of supervisory stability and influence, with the presence of the European Central Bank and Deutsche Bank. The city has already attracted UBS, JPMorgan and Goldman Sachs. Predictably, the take-up of office real estate in Frankfurt is growing fast.”
However, they go on to say that
“Dublin has the potential to surpass Frankfurt in the end, due to its tax advantages and earlier success in bringing in the European headquarters of big tech companies such as Microsoft, Facebook and Google. However, its location is deemed less convenient than the London City. Barclays has already announced plans to expand into the Irish capital.”
In 2017 several global Financial Services companies announced they were expanding operations in Ireland. And it’s not just financial companies that are considering Ireland for expansion. In previous articles on our blog we’ve discussed technology companies and pharmaceutical companies that have set up and expanded their operations here.
Financial Services Companies Expanding to Ireland in 2018
Below are some of the Financial Services companies that are furthering their global business expansion in Ireland in 2018.
- Company – S&P Global Ratings
- Location – Dublin
- Announcement – S&P Global Ratings announced it has chosen Dublin as a post-Brexit European hub
The ratings agency, S&P Global confirmed that it plans to open a Dublin unit by December 2018. This is required to ensure it continues to meet European Union regulations for ratings agencies. The company has created S&P Global Ratings Europe (SPGRE), a new Dublin-based entity to oversee all European operations.
Since Brexit was voted in by the public, several international companies have announced plans to shift their European focus away from the UK. This makes sense from a regulatory and currency point of view.
“S&P Global Ratings is working hard to minimise Brexit’s potential impact on the markets and our staff and operations. To achieve this, our Brexit plan features the creation of a corporate structure centred on a new EU-based entity. We have selected Dublin as the location for this new entity. All our existing EMEA offices (including London) will operate as branches of the new entity.”
The actual number of jobs that would move has yet to be announced.
“We hope to have SPGRE up and running by December 2018, well in time for Brexit” the company said.
- Company – Travellers
- Location – Dublin
- Announcement – Travelers Europe to create a European subsidiary in Dublin in response to Brexit
In a similar move to S&P Global Ratings, US insurance company Travellers Inc. are set to expand their operations into Ireland to ‘Brexit-proof’ their business.
Commenting on the decision Travelers stated the new Irish operation means the company will “seamlessly serve” its customers and intermediaries in Ireland and across Europe if/when the UK does leave the EU. The new Irish operation won’t affect Travellers’ existing UK-based operations, the company said.
“Ireland is a natural choice for Travelers to establish its EU-based subsidiary. We have been present in the Irish general insurance market for more than 20 years, and our new company will utilise our existing branch resources. We look forward to deepening our relationships with brokers, customers and regulators in Ireland, as well as continuing to serve our policyholders who have assets throughout Europe.” said Matthew Wilson, CEO of Travelers Europe.
The Smart MBS solution
In truth, there are lots of reasons why you would explore an expansion program. Brexit is topical and has created some regulatory reasons for businesses locating in Ireland. But there are plenty of other valid reasons for choosing Ireland.
You can find out more about Ireland as a location and how Smart MBS can help your expansion plans by downloading the eBook below.
We pride ourselves on being able to provide a turnkey solution at a predetermined cost. If your company is considering a business expansion, please contact us today and organise a call with one of our consultants.
Smart MBS can make it happen for your company.