Managing Director of TMF Group's Dublin office Ronan Reilly gives his insight into what the bailout exit means for businesses investing in Ireland.
Ireland will formally exit the EU-IMF bailout programme on 15 December and the world is watching this pivotal moment in the country's economic recovery.
Although it's been a trying three years Ireland's economy has made significant progress since entering the bailout.
Yields on government bonds have plummeted – the yield on 10-year bonds reached 3.54% in October 2013 compared to a startling 14% in July 2011 – highlighting growing confidence in the recovery.
Unemployment remains high but is steadily dropping with the rate below 13% in November. In addition, the government is on target to bring the budget deficit below 3% by 2015.
Perhaps the most reassuring aspect of the exit, and the most talked about, is Ireland's decision not to have a precautionary line of credit in place. As a buffer in case of any market disruption the government has instead built up cash reserves of more than €20bn.
By many, going ahead without a line of credit is seen as a positive move as it gives the Irish government much more control over economic decisions and they will be subject to less scrutiny by EU officials.
The economic outlook
But what does post-bailout Ireland look like for businesses?
Overall the economic outlook is good. A stable government is in place and there is almost universal agreement that the 12.5% corporation tax rate should not be increased.
It seems that foreign direct investment (FDI) in Ireland has strengthened during the recession, giving rise to buoyant hopes for yet more overseas investment after the bailout.
The cost of doing business in Ireland dropped during the slump and state bodies like the Industrial Development Agency (IDA) continue to actively assist companies in setting up and expanding their Irish operations. A pro-business culture is firmly in place - complemented by flexible labour markets and a well-educated English-speaking workforce.
American Chamber of Commerce President Peter Keegan said: "In spite of the difficult economic times, FDI has continued to be a success story for Ireland. Since 2008, US companies in Ireland have increased their investment by 25% to over $200 billion, and employment has increased by 15% to 115,000. We have seen almost 50 major investments in 2013, which have led to 4,000 new jobs this year. This has included new investors such as FireEye and TripAdvisor, and expansions by dozens of companies already located here, including EMC, Nypro, eBay and Vistakon, to name a small few."
The list goes on, with Deutsche Bank recently announcing they will create 700 new jobs in Dublin and Facebook taking a lease on new offices which can accommodate 1,000 employees.
In fact, foreign investors and particularly tech giants have been flying the flag for operations in Ireland for some time now. Google, LinkedIn, Paypal and Facebook have all experienced revenue growth in the last three years.
What's more, Ireland has just been named as the "best country for business" in rankings carried out by US financial magazine Forbes.
A bailout-free and largely economically independent Ireland is an attractive proposition for companies looking to expand – not least because so many well-established organisations have already beaten a path.
The exit will ease the way for even more companies to invest in Ireland. Confidence is high, recovery is stable and the success of the big corporates already in Ireland is a big endorsement for the country.
With two days to go till the big exit Ireland is off to a running start. The economy is set to grow in 2014 with the Economic and Social Research Institute (ESRI) predicting GNP growth of 2.7%.
Ronan Reilly, Managing Director, TMF Management (Ireland) Limited
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