26 January 1995

Legal And Tax Aspects Of Corporate Investment In Ireland - Development Agencies

Ireland Family and Matrimonial
To print this article, all you need is to be registered or login on
IDA Ireland (the "IDA") has been promoting industrial development in Ireland since 1949. It is a state sponsored agency which provides a service to industries based on considerable in-depth experience and a unique range of aids and incentives. In addition, the IDA assists investors intending to establish operations in Ireland to select sites (or alternatively may make available sites and/or an advance factory) and may help in work training. There are six IDA offices in the U.S.; in New York, Chicago, Los Angeles, Boston, San Jose and Atlanta. There are also offices in England, Germany, Holland and Japan.

Industrial Undertakings
The IDA has laid down certain preferred criteria against which it evaluates potential new investment. These criteria include the likelihood of fast growth on international markets, high technology, high added value in Ireland, investment per job created and potential for using local raw materials and supplies. On the basis of these considerations, the IDA can offer an extremely favourable package of financial incentives which includes non-repayable capital grants, training grants and research and development grants. The IDA also guarantees loans, subsidises factory rents and interest charges and on occasion takes an equity stake in new ventures. Its many ancillary services include advice on raising money, on labor and on all matters of key importance to a newly establishing overseas industry.

The following IDA grants are available:

Capital Grants
The IDA gives cash grants towards the cost of fixed assets, including site development, the scale of the grants depending on the type of industry and where it is located. Grant levels are calculated as percentages of fixed investment ranging up to 60% in the underdeveloped areas (largely the western half of the country) and to a maximum of 45% in other areas. For larger capital intensive projects, the grants are geared to the location and to the number of workers employed.

Grants for Worker Training
Training grants of up to 100% of the cost of training programmes for workers in new industries are available. The grants also cover the cost of sending personnel abroad for training, salaries, travel and subsistence expenses of training personnel, management training expenses and the cost of hiring training consultants.

Research and Development
The product and process development scheme actively encourages industrialists to examine and improve their methods of manufacture and their products. Grants are available in respect of the direct costs of specific R&D projects undertaken by manufacturers in amounts of up to 50% of the approved cost of a project. Grants are also payable towards the cost of acquiring fixed assets for R&D facilities linked to a manufacturing unit.

Advance Factories and Business Parks
Ready built advance factories, offices and available serviced sites save time on production start-up. The IDA owns approximately 2,500 acres of serviced industrial sites in Ireland. It builds advance factories on its own industrial estates or on single sites so that accommodation for new industry is readily available. Office developments have also been constructed for international service industries.

International Services
As payroll costs rather than capital are the principal financial outlay in the service industries, special incentives are available for this sector. The IDA's International Services programme covers the following businesses:-
  • - animation
  • - administrative headquarters
  • - commercial testing laboratories
  • - data processing
  • - film making
  • - healthcare services
  • - international financial services
  • - media recording and post production services
  • - publishing houses
  • - research and development centres
  • - software development services
  • - technical and consultancy services relating to either
  • data processing or software development
  • - telemarketing
  • - training services
provided they operate internationally or have experience not already available in Ireland. The key elements of the special International Services package are:

Low Taxes
Many services including computer services, qualify for a 10% rate of corporate profits tax, (dealt with under text search "Taxation"), until 31st December, 2010. Furthermore, patent royalty income from innovation developed in Ireland is completely free of tax.

Employment Grants
Cash grants are payable to service industries by the IDA on jobs created. These grants are negotiable and can vary with the characteristics of the employment being created.

Training Grants
Training grants of up to 100% of the cost of agreed training programmes for staff in new service industries are available. The grants can cover the cost of sending staff abroad for training, salaries and travel and subsistence expenses of training personnel on certain training courses.

Capital Grants
The full range of capital grants for industrial undertakings outlined above is also available to new service industries.

It is only in exceptional cases that the maximum grant levels will be approved.

Shannon Free Airport Development Company Limited And The Shannon Free Zone

Adjacent to Shannon Airport is one of Ireland's largest industrial estates, the "Shannon Free Zone". The body responsible for its administration is the Shannon Free Airport Development Company Limited ("SFADCo"). A unique package of tax and other incentives, including a grant aid package similar to that offered by the IDA, is offered to export orientated businesses locating there.

Generally, any person wishing to operate in the Shannon Free Zone must be the holder of a license granted by the Minister for Enterprise and Employment under the Customs-Free Airport (Amendment) Act, 1958. In considering any application for a license, the Minister for Enterprise and Employment pays particular regard to the extent to which the proposed trade, business or manufacture will contribute to the use and development of the Shannon Free Zone and the extent to which air transport will be used in, or in connection with, the carrying on of the trade, business or manufacture in the Shannon Free Zone.

A wide range of companies operate in the Shannon Free Zone and their activities include the manufacture of goods, aircraft maintenance and repair, aircraft and asset leasing and financial services.

Udaras Na Gaeltachta

Udaras na Gaeltachta ("Udaras") was established by the Irish Government to foster the economic development of those areas of Ireland where the population is bi-lingual, that is English and Irish speaking. Such areas are primarily located along the western seaboard. Udaras can make available a variety of grants which include employment grants, capital grants, rent subsidies, interest subsidies, feasibility study grants, training grants and research and development grants.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
26 January 1995

Legal And Tax Aspects Of Corporate Investment In Ireland - Development Agencies

Ireland Family and Matrimonial
See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More