6 Reasons US Companies Should Expand Their Business To Ireland
When it comes to business expansion strategies, globalisation and the Internet have both removed barriers to entry and opened up most of the world to competition. In business standing still is not an option. Although the following quote is attributed to Benjamin Franklin hundreds of years ago, the sentiment still holds true today.
“How do you become better tomorrow? By improving yourself, the world is made better. Be not afraid of growing too slowly. Be afraid of standing still. Forget your mistakes but remember what they taught you. So how do you become better tomorrow? By becoming better today.”
Why expand your business into Europe?
From the Treaty of Rome in 1957 that created of the European Economic Community to the Maastricht Treaty in 1992 that created the European Union, Europe has steadily been attempting to integrate economic policies of independent nations.
As you can see from this animation, economic cooperation has been growing steadily in Europe as more and more nations recognise the benefits for their local economy and the wider area.
By Kolja21 - Own work, CC BY-SA 3.0, Link
If you have been considering an international expansion strategy for your company, here are 6 reasons why setting up in Ireland makes sense.
1. Access new markets
Ireland is frequently referred to as the 51st State of the United States. As then Irish Minister for Enterprise, Mary Harney famously remarked in 2000,
“Geographically, we are closer to Berlin than Boston. Spiritually, we are probably a lot closer to Boston than Berlin."
Having said that our EU membership gives us the benefit of tariff free trading with almost 30 other European countries and access to a huge consumer market. If the US and Europe are the circles in a Venn diagram, Ireland represents that coveted middle piece between the two economic powerhouses.
Over 500 million people live in the 28 states of the EU. These member states benefit from trade agreements that allow free movement of people, goods, services and capital across borders. Ireland is in a particularly strong position as it has a common currency, the euro, with 18 other EU nations.
2. Embrace the positive changes
Europe has enjoyed waves of positive changes over the last few decades. After the collapse of the Berlin Wall in 1989 and subsequent end of the Cold War and fall of communism, Western European markets have opened to trade with other countries.
By the late 1990s the EU member states had converged towards a common economic policy that allowed them to share common currency, the euro from 2002. Since then another seven countries have joined the euro with more waiting in the wings.
From a communication stand point, Internet penetration levels across the continent of Europe are some of the highest in the world, particularly in Western Europe. This has made Europe highly adaptable to technological innovations such as workflow and HR software. This has made it easy to manage a workforce that is spread around the world. Added to that, e-commerce has revolutionised how companies sell to their consumers.
In short, as the world has become more interconnected, with Europe to the fore in this regard; it has never been easier to establish a global footprint for your business.
3. Challenge your competitors
Success away from your domestic market could result in the capital injection required to make gains at home. Given the changes we’ve outlined above, it certainly has become easier to expand into overseas markets. If your company has been considering a move into foreign territories, chances are your competitors have too.
If your company has achieved steady growth at home, it’s highly probable you could achieve similar growth in overseas markets. The rise of the emerging market consumer has given more scope for companies to expand and prosper.
This video from the Harvard Business Review from 2015 highlights the need for companies to think globally.
4. Build your brand
As the HBR video outlines, the global consumer market has grown massively in the last 20 years as emerging economies have become more developed. For example, much of the economic development in the last 20 years has occurred in Asia. Considering this is the most populous place on earth (60% of the people in the world live in Asia), consumers in this part of the world have now begun to demand western products and services. Why not put your company in the mix?
5. Leverage skilled labour force
For decades the technology and pharmaceutical industries having been coming to Ireland to avail of lower labour costs. In addition to this, there is also the opportunity to tap into a workforce with a set of skills that might not be so readily available in your domestic location.
For example, Ireland has a high proportion of its youth continuing their education to third level. Almost 30% of third level students enrolled in Science, Technology, Engineering and Maths (STEM) courses. A further 25% of students enrolled in Social Sciences, Business and Law courses.
6. Favourable tax laws
To complement the tremendous achievements of the IDA in attracting Foreign Direct Investment to Ireland, the Irish government has created a business-friendly set of tax rates for corporations. This tactic has been a cornerstone of success over the last 30 years. Companies such as Google, Apple, Facebook and LinkedIn to name but a few have all thrived in Ireland under the favourable tax laws. Some of the beneficial aspects of the Irish tax regime include:
- 12.5% corporate tax rate
- 25% Research and Development tax credit
- Excellent Intellectual Property regime
- Attractive Holding Company regime
- Effective zero tax rate for foreign dividends
Would you like to hear more about how to expand your business overseas?
Smart MBS can help.
Our core business solution is helping companies expand internationally.
If you have any queries on expanding your business, please also get in touch today.
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