1.1

IRELAND

Ireland is a parliamentary democracy operated on the principle of the tripartite separation of powers between the Executive, comprising the government of the day headed by a Prime Minister (Taoiseach), the Judiciary and the Legislature (Oireachtas), which is divided into two houses. The first house, known as the Dail, is the principal legislative forum while the second house, the Seanad, assumes a more consultative role. Ireland's constitution remains largely unchanged since its adoption in 1937.

Ireland is a politically stable country which has been a member of the European Union since 1973. It has a tradition of neutrality and is not a member of the North Atlantic Treaty Organisation. Ireland's 32 ambassadors serve a total of 55 countries, mainly in the larger industrial nations. The Irish Ambassador to the U.S. resides in Washington D.C. and Consular offices are maintained in New York, Chicago, San Francisco and Boston.

The currency of Ireland is the Irish pound, a constituent currency of the European Monetary System ("EMS") since its inception. The average Irish pound/US dollar rate of exchange for the twelve month period to December 31, 1996 was IR£1 : US$1.6007 and for the twelve month period to December 31, 1997 was IR£1 : US$1.5179.

There are many features which make Ireland an attractive location for a North American investor. According to the U.S. Department of Commerce, Ireland is one of the most profitable locations in the world for U.S. overseas investment. Labour costs in Ireland are approximately half of those in the U.S. and considerably below those of other Member States of the European Union. The average annual rate of inflation in Ireland since 1986 has been less than 2.97%. The country has a well-educated workforce. Although English is the primary language Ireland's workforce has considerable language skills. Its laws, based on common law, are very similar to those of the U.S.

As a small island without a substantial industrial base and with a largely agricultural economy, the provision of a favourable environment for foreign investment has been one method by which successive Irish governments have sought to create the additional employment required by a rapidly expanding young population. Ireland has the youngest population in the European Union with approximately half of its population of 3.5 million under the age of 30. By offering a variety of tax concessions, grant aids and other incentives Irish Governments have attracted a considerable number of foreign manufacturing and service industries and have already established Ireland as an attractive destination for foreign investment. With that background, Ireland was well placed, within the European Single Market, to stimulate further overseas investment with the establishment of Dublin's International Financial Services Centre (the "IFSC") in 1987. The legislation creating the IFSC was enacted in conjunction with a further package of tax and related incentives, which are considered in detail in Section 6 of this paper.

This article was intended to provide general guidelines. Specialist advice should be sought about specific facts.