Ireland is home to an enviable mix of a well-established financial services and banking sector companies and a market leading technology industry. The collaboration between the finance and technology sectors here means that Ireland is seen as one of the top choices for FinTech companies that are seeking to flourish and disrupt the status quo. For example, German consulting firm Roland Berger reports that 50% of FinTech businesses from Europe are eager to expand their geographic presence and Ireland is the most popular country they are targeting for expansion. But what makes Ireland the perfect partner for the digital transformation by financial services through technology?
1 Ireland as the post-Brexit gateway to Europe
With the United Kingdom’s departure from Europe looming, and the possibility of UK based financial services companies losing their freedom to sell services across the EU market, Ireland is becoming a popular target for FinTechs to expand their geographic presence.
Ireland is well equipped to take advantage of this opportunity to become a flexible and powerful FinTech hub. As the only English speaking country in the eurozone, Ireland is perfectly positioned to facilitate FinTechs ‘passporting’ their services throughout the EU from Ireland. Ireland provides FinTech businesses with access to a single market of over 500 million consumers. Interestingly, financial firms with a MiFID passport can also serve EU27 clients from Ireland, just as they currently do from London.
2 FinTech is an Irish Government priority
The Irish Government is treating the development of the FinTech sector as a government priority, as evident from its strategy for developing Ireland’s financial services sector, IFS 2020. The Government is proactively promoting Ireland as a global digital hub and strongly encourages the development of e-commerce and foreign direct investment by ICT companies into Ireland.
Ireland also benefits from an attractive and stable corporate tax regime. Ireland’s 12.5% corporation tax rate for trading activity is a cornerstone of Ireland’s offering as a FinTech location. Other incentives include a comprehensive double taxation treaty network, a research and development credit of 25%, and employment and training grants, to name but a
3 World-leading centre for the technology industry
Ireland is renowned as a world-leading centre for the technology industry. The Emerald Isle is a gateway for international technology businesses seeking to enter or serve the European market. For example, 9 of the world’s top 10 technology companies are located in Ireland.
A thriving tech start-up scene, combined with established R&D centres of financial giants, has created a prosperous ecosystem for FinTech research, development and innovation in Ireland. This is evidenced by strong indigenous fintech firms which have excelled to global success, such as Realex and Stripe.
4 Established international financial services sector
Ireland is home to over 50% of the world’s leading organisations in the financial services sector. Financial services giants based here are acknowledging the mutual benefits of a symbiotic relationship with technology sectors and are engaging with FinTech firms as well as setting up research and innovation centres in Ireland.
With the support of a number of tier-one financial services multinational companies, an exciting FinTech start-up scene has developed here. Irish banks are also providing incubation and co-working spaces. In many cases they are also the end users as they purchase innovative FinTech solutions for internal use.
5 Ireland right place, right time
Ireland offers an educated skilled and multilingual workforce, with access to a Europe-wide pool of talent. A combination of Ireland’s liberalised electronic communications industry and an highly educated workforce are some of the benefits for a FinTech company locating its European headquarters in Ireland.
The financial regulator, the Central Bank of Ireland, has stated its view that “FinTech innovations can bring benefits to consumers and firms”. In the past 12 months the Central Bank has reviewed its authorisation process with the aim of making the financial licence application process in Ireland more efficient for FinTechs.
6 Common law jurisdiction
From a FinTech contracts perspective, Ireland is an English common law jurisdiction. This means that its legal concepts are recognised and understood by most foreign investors, including US multinationals. The benefit for FinTech businesses is that this means Ireland is regarded as having a more flexible and less prescriptive legal system than many civil law jurisdictions.
What we can expect
Ireland is aiming to grow into a global FinTech hub through the symbiotic relationship between the vibrant financial services and technology sectors. Fintechs with ambitious plans to scale need to consider a range of factors when deciding what countries to target for expansion. A combination of factors, such as government support, existing technology ecosystem and a large pool of talent, to name but a few, make Ireland an attractive location for FinTech businesses and entrepreneurs who are looking to succeed.