The last few decade hasn’t been great for Ireland’s economy as it slipped into recession for the first time since the 1980s. So bad was the financial crisis that was described as the country’s worst period since the potato famine.
It was eventually bailed out by a trio of international lenders who stepped forward with a €67.5billion loan in 2010 and three years later became the first of the eurozone states to exit its rescue programme. Greece, Cyrpus and Portugal are still involved in rescue programmes.
Ireland is on course to be the fastest growing economy in the euro zone for a fourth straight year, according to Davy Stockbrokers.
These days though, the Irish economy is in great shape – after years of economic downturn and a subsequent bailout following the 2008 global crash, the Bank of Ireland’s latest economic forecast has seen it revise the Emerald Isle’s gross domestic product growth projections from 3.2% to 4.8% this year and to 3.8% from 3.1% for 2018.
If you’re not already doing business out there, it’s time you were – Ireland is the UK’s fifth largest export market and imports more from the UK than any other country – mainly food, drink, clothing, fashion and footwear – and the UK accounts for 34% of imports into Ireland.
In 2012, total trade in goods and services from the UK to Ireland was £27 billion and two-way trade stands at €1 billion.
Here’s everything you need to know about exporting to Ireland…
What are the pros and cons of exporting to Ireland?
Doing business in Ireland is as close as you can get to doing business in the UK, so if you’re successful in the UK, there’s a good chance you’ll be successful in Ireland.
The strengths of the Irish market include:
- strong bilateral trade between the two countries
- strong economic environment
- flexibility and range of Small and Medium Sized Enterprises (SMEs) representing 99.8% of active enterprises in Ireland
- 3 million British tourists visit Ireland every year
- highly educated workforce
And if you’re thinking of exporting to Ireland, the advantages for UK business, are:
- English speaking
- same time zone
- strong transport links
- similar regulatory and legal framework
- ideal starter or test export market
- sophisticated consumer market
- open economy, used to imports
- good perception of the quality of British goods and services
- strengthening Euro makes it more profitable to export to eurozone market
Although Ireland is a perfect first step market for UK companies, you need to be aware there are some challenges, notably:
- challenging economic situation, although it has improved in the last 12 months
- recent reduction in purchasing power of Irish families
- turbulent consumer confidence
- competition against a robust domestic market
- costs of doing business can be high
In its latest economic outlook the firm predicts that gross domestic product (GDP) will grow 5 per cent in 2017, up from a previous forecast of 3.7 per cent. This is well ahead of the current consensus forecast for 1.7 per cent growth across the euro area as a whole.
The top five exports to Ireland are:
- petroleum products and related materials
- miscellaneous manufactured articles
- gas, natural and manufactured
- articles of apparel and clothing accessories
- essential oils and perfume materials; toilet preparations etc
While the top five exports to Ireland from the UK, by value, are:
- fuel and lubricants
- manufactured articles
- food and live animals
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How does tax work in Ireland?
The main tax rates in Ireland are:
- VAT – Charged at a standard rate of 23%, while a standard rate of 13.5% applies to labour-intensive services. Tourism goods and services are charged at 9%, while a rate of 4.8% is applied to livestock. No VAT is levied on services supplied in the public interest, such as foods, medicines, children’s clothes, childcare and education
- Corporation tax – charged at 12.5% on trading income, this is one of the lowest ‘onshore’ statutory corporate tax rates in the world, and a big reason why companies like Apple and Google have European HQ’s in Ireland.
- Income tax – ranges from 20% to 40%, depending upon income.
How will I be affected by customs in Ireland?
The internal EU single market allows for the free movement of goods and services without any import duties being applied, and testing is mandatory for some imported goods, especially technical and electrical equipment.