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Country Risk Report: Ireland


Table of Contents

General Info Interesting Facts Risk Assessment
Location and Size Economy Business Protocol
Government Comparative Indicators Other Sources of Info
Legal System Credit and Collections

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General Information

Official Name: Republic of Ireland

National Symbols: Irish Harp, shamrock, Celtic cross

Internet Domain: .ie
International Dialing Code: +353

Location and Size

Ireland is a western European country, occupying five-sixths of the island of Ireland in the North Atlantic Ocean, west of Great Britain. Its land area is 68,883 sq. km., making it slightly larger than the U.S. state of West Virginia. The capital city of Dublin is on the country’s east coast on the banks of the Liffey River.

Government

Ireland's government is a republic, parliamentary democracy including 29 counties and 5 cities.

Branches:

Executive: chief of state President Michael D. Higgins; head of government Prime Minister Enda Kenny; cabinet: Cabinet appointed by the president with previous nomination by the prime minister and approval of the lower house of Parliament.

Legislative: bicameral Parliament consists of the Senate with 60 seats; 49 members elected by the universities and from candidates put forward by five vocational panels, 11 nominated by the prime minister; members serve five-year terms and the lower house of Parliament with 166 seats; members elected by popular vote on the basis of proportional representation to serve five-year terms.

Judicial: highest court(s): Supreme Court or Court of Final Appeal (consists of the chief justice and 7 judges); judges are nominated by the prime minister and Cabinet and appointed by the president; judges serve until age 70. Subordinate courts: High Court, Court of Criminal Appeal; circuit and district courts.

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Legal System

Ireland has a common law system based on the English model but substantially modified by customary law with judicial review of legislative acts in the Supreme Court.

The country has not accepted compulsory International Court of Justice (ICJ) jurisdiction declaration. 

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10 Interesting Facts About Ireland

  1. The Tara mine near Narvan is the largest zinc mine in Europe, and fifth largest in the world.
  2. The word “boycott” originated in Ireland after an Irish landowner, Charles Boycott refused to drop his rents.
  3. The Polish are the largest group of non-Irish living in Ireland.
  4. The Irish drink an average of 1,184 cups of tea per year, making it the greatest tea drinking nation per capita. It is fourth in the consumption of beer.
  5. According to the Irish birthday traditions, people hold the birthday child upside down and bump the head slightly on the floor. The bumps correspond to the age of the child. It is believed that this tradition brings good luck.
  6. There are more tourists than residents living in Ireland. Five million people visit Ireland every year and live in a country of 3.8 million people.
  7. The average temperature in the city of Dublin is 41°F in January and is 63°F in July.
  8. There are only 26 land mammal species native to Ireland and fewer plant and animal species than Britain or mainland Europe.
  9. Ireland's Wild Atlantic Way is the longest defined coastal drive in the world.
  10. Ireland was the last country in Europe to permit divorce. The first divorce granted was in 1997.

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Economy

Ireland is a small, modern, trade-dependent economy whose economic activity has dropped sharply since the onset of the world financial crisis. Agriculture, once the most important sector, is now dwarfed by industry and services. The export sector is dominated by foreign multinationals, and has become a key component of Ireland's economy. Sectors, such as chemicals, IT and telecoms, have made productivity gains which will boost export performance. Services exports, in particular business and IT services, make up half of Irish exports and are currently growing more quickly than merchandise exports. 

Despite the many advantages of Irish exports, 70% of sales of services are still absorbed by the European Union. Accordingly, weak activity in Western Europe as well as sluggish domestic demand will act as a major curb on the expected recovery. 

Leading Markets (2016): US 18%, UK 17.4%, Belgium 15.6%, Germany 8.4%, Switzerland 5.8%, France 5%

Leading Exports-commodities: machinery and equipment, computers, chemicals, medical devices, pharmaceuticals; food products, animal products

Leading Suppliers (2016): UK 40%, US 13.2%, Germany 7.6%, Netherlands 5.6%

Leading Imports-commodities: data processing equipment, other machinery and equipment, chemicals, petroleum and petroleum products, textiles, clothing

Top Industries: pharmaceuticals, chemicals, computer hardware and software, food products, beverages and brewing, medical devices

Top Agricultural Products: barley, potatoes, wheat, beef, dairy products

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Comparative Economic Indicators – 2017

Ireland Belgium France Iceland Netherlands Norway
Population (millions)* 4.6 10.4 66.0 0.3 18.8 4.7
Population growth rate (%)* 0.5 0.05 0.5 0.7 0.4 0.3
Age Structure (%)
(15 to 64 years old)
66.5 65.6 63.4 67.0 65.8 65.7
Age Structure (%)
(65+ years old)
12.1 18.7 17.9 13.2 17.1 16.8
Literacy (%) 99 99 99 99 99 100
Unemployment rate (%) 7/1 7.6 9.5 5.8 5.3 3.2
Inflation (%) 1.7 2.6 2.2 5.2 2.8 0.7
Population below poverty line (%) 5.5
15.2 7.8
NA 10.5 NA
GDP** (USD billions) 195.4 427.2 2,291.0 13.0 718.6 261.7
GDP real growth rate (%) 0.9 -0.2 0.0 1.6 -0.8 3.0
GDP per capita** (USD) 42,600 38,500 36,100 39,900 42,900 55,900
Public debt (% of GDP) 118.4 99.6 90.3 131.8 71.1 29.1
Industrial production growth rate (%) -0.1 -1.6 -1.0 -2.4 -2.5 3.2
Exports (USD billions) 119.0 302.4 567.4 5.1 540.3 166.0
Imports (USD billions) 64.3 311.1 643.4 4.4 476.5 89.1
Reserves of foreign exchange and gold (USD billions) 1.7 30.8 184.5 4.2 54.8 51.9
Currency Euro
EUR
Euro
EUR
Euro
EUR
Krona
ISK
Euro
EUR
Kroner
NOK
Exchange rates (per USD) 05/24/2017  1.12 1.12 1.12 115.3 1.12 6.1
Exchange rates (per EUR) 05/24/2017 n/a n/a n/a 157.6 n/a 8.3


** PPP – Purchasing Power Parity
*** 2017 Corruption Index: 80-100=Clean; 0-39=Corrupt
**** 2017 Index of Economic Freedom: 100-80 = Free; 49.9-0 = Repressed

Economic Data from CIA World Factbook

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Credit and Collections

Collecting in Country

Irish Statute of Limitations:

  • Open Account: 6 years
  • Promissory Notes: 6 years
  • Written Contracts: 6 years
  • Oral Agreements: 6 years

Dispute Resolution

Ireland has no specific domestic body for handling investment disputes. The Companies Act 1963 (amended 1990) is the most important body of law dealing with commercial and bankruptcy law and is applied consistently by the courts. Irish bankruptcy laws give creditors a strong degree of protection.

Ireland has no specific laws governing investment disputes that apply only to foreign firms. There is, however, a legal arbitration framework available to parties that opt to arbitrate a dispute, including investment disputes, rather than litigate the case. Should parties opt for litigation, the judiciary is independent, and litigants are entitled to trial by jury in commercial disputes.

Ireland is a member of the International Center for the Settlement of Investment Disputes (ICSID), and the Irish Government has been willing to agree to binding international arbitration of investment disputes between foreign investors and the state. 

Ireland is also a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards (UNCITRAL). The UNCITRAL Model Law, adopted by more than 50 countries, covers all stages of the arbitral process. Ireland originally adopted the Model Law in the Arbitration (International Commercial) Act 1998, but only for international commercial arbitrations. With the 2010 Arbitration Act, Ireland has implemented the UNCITRAL Model Law to both domestic and international arbitration.

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Risk Assessment

Coface Country Rating: A3 -- The overall risk is a combination of business-specific factors and factors relating to the country in which the business operates. .

Coface Business Climate Rating: A1 -- Evaluating the business environment involves measuring the quality of a country’s private sector governance – in other words businesses’ financial transparency and the effectiveness of the courts in settling debts. Evaluations use a seven-level ranking.

Growth, which was artificially swollen in 2015, because of the repatriation of financial assets by some multinationals and the arrival of an aircraft leasing company (real GDP increase was approximately 4.5% excluding these exceptional factors), continued in the right direction in 2016. Multinational companies domicile their operations in the country to take advantage of the low corporation tax rate (12.5% at the most) but any positive effects of their activities are limited as most of these activities take place outside Ireland. The domestic market however gains momentum and there is some additional job creation. Unemployment has fallen and wages are rising,  which should help drive consumption in 2017, while investments are likely to slow unless there are some new initiatives from multinational companies. House building is however expected to continue. The high level of corporate debt and non-performing loans (mortgages, SME loans) still held by banks will continue to impact on credit availability to smaller companies. Stress tests carried out in 2016 by the European Banking Authority also revealed that Irish banks were still overly vulnerable to economic shocks.

Economic Freedom: Ireland’s economic freedom score is 76.7, making its economy the 9th freest in the 2017 Index of Economic Freedom. The Irish economy has fallen to 3rd place in the Europe region behind Switzerland and Estonia.

Market Access: The Irish Government actively promotes foreign direct investment (FDI). The principal goal of Ireland’s investment promotion has been employment creation, especially in technology-intensive and high-skill industries. More recently, the Government has focused on Ireland’s international competitiveness by encouraging foreign-invested companies to enhance research and development (R&D) activities and to deliver higher-value goods and services.

The United States and Ireland have shared a Friendship, Commerce, and Navigation Treaty since 1950.

Regulatory System: The Irish government employs a transparent and effective policy framework that fosters competition between private businesses in a non-discriminatory fashion. U.S. businesses can, in general, expect to receive national treatment in their dealings with the government. Bureaucratic procedures are transparent and reasonably efficient, in line with a general pro-business climate espoused by the Government.

Intellectual Property Rights: Ireland is a member of the World Intellectual Property Organization (WIPO) and a party to the International Convention for the Protection of Intellectual Property. Legislation enacted in 2000 brought Irish intellectual property rights (IPR) law into compliance with Ireland's obligations under the WTO Trade-Related Intellectual Property Treaty (TRIPs). This legislation gives Ireland one of the most comprehensive legal frameworks for IPR protection in Europe.

Exchange Control: Euro notes and coins are the official currency and there are no exchange controls. Any sums of money in any currency can be freely brought into or taken out of the country without disclosure or other formalities.

Corruption: Corruption is not a serious problem for foreign investors in Ireland. Ireland signed the UN Convention against Corruption , and ratification is pending a review of the legal measures required for implementation.

Political Violence: There was no significant spillover of violence from Northern Ireland in the 1970s and 1980s, or since the cease-fires of 1994.  

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Business Protocol in Ireland

  • Irish businesspeople are generally less formal and more outwardly friendly than in many European countries. Shake hands with everyone at the meeting and be sure to smile.
  • Meetings may occur in several venues, not merely the office. It is quite common to conduct a business meeting in a restaurant or pub. In most cases meetings will be relaxed. It is customary to have a period of small talk before the actual meeting which is when a rapport is built to take forward into the meeting.
  • Business cards are exchanged after the initial introductions without formal ritual. Many businesspeople do not have business cards, so you should not be offended if you are not offered one in return.
  • The Irish use stories and anecdotes to relay information and value a well-crafted message. How you speak says a lot about you in Ireland. The Irish appreciate modesty and can be suspicious of people who are loud and tend to brag.
  • When discussing your professional achievements it is best to casually insert the information in short snippets during several conversations rather than embarking on a long self-centered outline of your successes.
  • There is a tendency to use understatement or indirect communication rather than say something that might be contentious. Generally speaking, the Irish do not like confrontation and prefer to avoid conflict, which they attempt to do by being humorous and showing good manners.

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Sources for further information on doing business in Ireland

American Chamber of Commerce, Ireland

Irish American Business Chamber & Network, Philadelphia

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This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including Ireland. For further information, contact info@abc-amega.com.

This report represents a compilation of information from a wide variety of reputable sources.

Comparative Economic Indicators: CIA World Factbook

Risk Assessment information: Coface Country Rating

Exchange Rates: OANDA.com The Currency Site.