First up – cards on the table – we, in Ireland, are predominantly pro-Europe. We believe in the four freedoms which underpin the legal structure of the EU and our strongly recovering economy relies very heavily on those four freedoms, particularly on the free movement of people i.e. immigration. We are the absolute polar opposite of the political view which currently prevails in Westminster. That said, we also have an enduring, highly valued and very close relationship with the UK. This has caused us to endure an array of emotions from utter shock, to bitter anger, to dismay. More recently we are accepting of the ‘referendum’ and Ireland is now actively planning for our future post-Brexit.

Initial predictions of an immediate disastrous economic impact of Brexit have been wide off the mark. However, the clear and dominant theme which has emerged from Brexit is uncertainty. These uncertainties do not need to be rehearsed here in any detail, but from a high level they range from the obvious topics of access to the markets, currency fluctuations, taxes and tariffs to the slightly less obvious of recruiting talent, travel restrictions and ‘passporting’ regulatory authorisations post-Brexit.

The stark reality is that no-one has a clear picture how any of these will play out post-Brexit and this uncertainty is motivating business to seek out strategies which offer certainty. The corporate and regulatory framework of Ireland offers business a reliable and well-established platform to mitigate against the impact of Brexit and this brief blog sets out some high level observations of what we are seeing here arising from Brexit.

1. Intellectual property migrations

Any business holding intellectual property in the UK, which is key to the activity of that business elsewhere in the EU, should now be looking at what it can do to mitigate against the risk of tariffs being imposed on the cross border use of such intellectual property post-Brexit. The likely outcome of such a process is that some form of cross border restructuring of the intellectual property is proposed such that the intellectual property will, upon implementation of the solution, be held both in the UK and separately in an EU member country. The advantages of doing this now is that any exit taxes, transfer pricing arrangements or other barriers are either known or can be accurately costed – what might they be in the future?

In addition, if commercial trading arrangements of a company have some form of annual renewal process, the opportunity to roll EU customers from contracts concluded in the UK (accessing intellectual property held in the UK) to contracts which are external to the UK (with intellectual property held outside of the UK) prior to the occurrence of Brexit could be of significant commercial and operational benefit.

As a common law legal system, many of the concepts underpinning Irish intellectual property laws are similar to those in the UK. We have no thin capitalisation rules in Ireland, so setting up a company to hold intellectual property (as part of a certain strategy against Brexit) can be straight forward and inexpensive to set up and maintain. Indeed, there is no obligation to commence trading such a structure, so the option to set up a structure in Ireland and then mothball it pending the final outcome of Brexit is available. If Brexit is ‘hard’, the structure can commence trading, if it is ‘soft’, the structure could be simply wound up.Ireland also has a tax system which is geared favourably to the holding and developing of intellectual property in Ireland.

2. Regulatory hedging

In the UK today, it is common practice to ‘passport’ regulatory authorisations obtained in the UK to other EU member states to facilitate cross border business – a clear benefit of membership of the EU. There is a school of thought which is betting on the EU Commission to agree to regard such authorisations as being equivalent post-Brexit and therefore capable of usage across EU post-Brexit in the same manner as pre-Brexit. This is a high risk strategy and one which we would advise against. We are seeing many businesses particularly in the finance and technology sectors starting to make applications for regulatory approvals here in Ireland to facilitate EU business post-Brexit.

At a finance forum held in Dublin Castle on 24th January and addressed by both the Irish Taoiseach (prime minister) and Minister for Finance, a very clear message was provided which was that whilst every effort would be made to fast track Irish Central Bank authorisations, for new or updated applications to be completed pre-Brexit, they would need to be received before the end of Q2 2017. Though the level of scrutiny and timing associated with obtaining certain Central Bank authorisations are more vigorous than in other sectors, the takeaway is that to avoid delay and disruption, early action is advised.

It is notable that on 26th January, Barclays Bank announced that it would be redeploying its EU business through an Irish structure and an initial jobs announcement has already been confirmed in Dublin. Though no-one in Ireland is contemplating a mass migration of banks from London to Dublin, further similar announcements are in the pipeline.

3. Tax

It seems that every few months a new corporate tax strategy is put forward by the Chancellor of the day. So in 2010, UK corporate tax was cut from 28% to 20%. In July of 2016, Chancellor Osborne indicated that he would cut corporation tax to less than 15%. In September 2016, Chancellor Hammond changed that policy and indicated that corporate tax would not be reduced below 17%. So where is this all going? Where is the consistency? What will the attitude of the next government be?

In the Finance Act of 1999, Ireland committed to lowering corporate tax to 12.5% effective from 1st January 2003. Ireland has boomed, gone bust, received an IMF/EU bailout and has since re-emerged as the fastest growing economy in Europe. One constant in that entire cycle is that our corporate tax rate has at all times remained at 12.5%. Outside of the lunatic fringe economic policies of Sinn Fein, there is cross party political support for the 12.5% rate.

We also have developed a knowledge development box following the OECD report on harmful tax practices which complies with the principles laid down in that report – the knowledge development box rate is 6.25%.

4. Travel

Ireland and the UK have since 1923 enjoyed a Common Travel Area (the “CTA”). The CTA is an open borders area comprising Ireland, the United Kingdom of Great Britain and Northern Ireland, the Isle of Man and the Channel Islands.

Though CTA arrangements are legally non-binding, the fact that they have been in existence for such a lengthy period (significantly pre-dating the EEC) is important. Practically speaking, the internal borders of the CTA are subject to minimal or non-existent border controls and can normally be crossed by British and Irish citizens with minimal identity documents, though there are some exceptions. In 2014, the British and Irish governments began a trial based on the mutual recognition of travel visas for onward travel within the CTA – as of June 2016, this applies to visas issued to Chinese and Indian nationals.

The airline route between Dublin and London is the second busiest international air route in the world. The flight duration is less than an hour.

It is considered likely that the CTA will prevail post-Brexit. The prospect of a ‘hard Brexit’ is likely to mean that free movement of people into and out of the UK to all EU states (other than Ireland) will involve immigration and border control checks. If a company is looking at splitting its operations between the UK and an EU member state, then in terms of access alone, Ireland is likely to offer freer and more frequent access than any other EU member state.

5. New markets

Brexit has driven many companies that would never have looked at Ireland to consider Ireland as a location to undertake business. Canadian companies are a good example. In previous times, Canadian companies locating into Europe predominately set up through the UK on account of historical and other ties. This is no longer the case. Canada has finally secured the CETA free trade agreement and is eager to commence business through the EU availing of that treaty – the UK only offers a temporary springboard for Canadian companies in this regard and many are looking to the certainty offered by Ireland to grow in the EU. There is a noticeable rise in business from other Commonwealth members in particular Australia, New Zealand and India. Another new stream coming into Ireland is from Turkey – a significant wave of corporate migrations – though Brexit is not the main driver here.

So in summary, we are seeing business look at strategies whereby they can continue to undertake business both in the UK and EU post-Brexit. On the EU strand, Ireland offers a certain and stable structure through which businesses can hedge against the many uncertainties of Brexit. Whilst as a country, we would greatly favour the UK remaining in the EU, Ireland has many advantages to assist UK businesses navigate through Brexit.