Foreign investment regime
The government is keen to ensure that there are no significant barriers to international trade or foreign investment in Ireland. However, certain types of investment and industries are subject to approval, regulation, or both, under Irish law.i Mergers, joint ventures and acquisitions
Mergers, joint ventures and acquisitions are subject to antitrust legislation in Ireland and the European Union. The main Irish legislation in relation to antitrust law is the Competition Acts 2002–2017. Any merger, joint venture or acquisition that qualifies for notification must be notified to the Competition and Consumer Protection Commission (CCPC), which has the power to refuse to allow the transaction to proceed or to impose restrictions on it. A merger will qualify for notification to the CCPC when certain turnover thresholds are met. A merger control notification may be required to be submitted to the European Commission, instead of an Irish notification, where the jurisdictional thresholds of the EU Merger Regulation are triggered.
Media mergers are treated separately, however, and must be notified regardless of the turnover of the undertakings involved. Media mergers are subject to an additional review by the Minister for Communications, Climate Action and Environment (the Minister), who must have regard to certain public interest criteria, the extent to which ownership and control of media business is spread among individuals and undertakings, and the extent to which the diversity of views prevalent in Irish society is reflected through the activities of the various media businesses in the state.
Acquisition of a stake in an insurance or reinsurance undertaking or a credit institution may also be subject to prior approval from the Central Bank of Ireland (the Central Bank). Investors seeking to acquire a shareholding or other interest that would either give them a 'qualifying holding' in an insurance or reinsurance undertaking, or in a credit institution (authorised or licensed in Ireland), or that increases their control above certain levels (20, 33 or 50 per cent), must first obtain the approval of the Central Bank. A 'qualifying holding' is defined as a direct or indirect holding that represents 10 per cent or more of the capital of, or voting rights in, a target entity, or that confers a right to appoint and remove members of the board of directors or management, or otherwise allows that person to exercise a 'significant influence' over the direction or management of the target entity.ii Public takeovers
Public takeovers are principally regulated by the Irish Takeover Panel Act 1997 (as amended), the European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006 and the Irish Takeover Rules (the Rules). The Rules operate to regulate the orderly conduct of public takeovers in Ireland and, inter alia, to ensure that no takeover offer is frustrated or unfairly prejudiced and, in the case of multiple bidders, that there is a level playing field (e.g., frustrating actions are not permitted without target shareholder approval, and due diligence information provided by a target company to one bidder must be provided to all bona fide bidders). The Rules are not concerned with the financial or commercial advantages or disadvantages of a takeover.
The Irish Takeover Panel (the Panel) is responsible for making the Rules and monitoring and supervising takeovers. It works through the office of the Director General, who deals with the general administration of the Rules and is responsible for monitoring dealings in relevant securities. The Director General is also available for consultation and to give guidance before and during takeovers. The Panel has the sole power to make rulings and give directions during the course of a takeover. It also has the right to enquire into the conduct of any person involved in a takeover, and the power to admonish or censure a person for non-compliance with the Rules.iii Regulated industries
Particular industries in Ireland are subject to regulation and supervision by various regulatory bodies. Some of the key industries are set out below.International financial services
The European Central Bank (ECB) is the lead regulator of credit institutions in the European Union, and the European Securities and Markets Authority (ESMA) is the lead regulator of non-bank financial services entities. Both the ECB and ESMA are assisted by competent national authorities in each of the EU Member States. The Central Bank is the national competent authority in Ireland for both credit institutions and non-bank financial services entities. To operate a banking business in Ireland, a licence or authorisation is required from the Central Bank or the ECB in respect of a credit institution that is a 'significant' institution.
Following the introduction of the ECB's Single Supervisory Mechanism (SSM) in November 2014, the Central Bank is the regulator (home state regulator) for 'less significant' institutions operating within Ireland, while the ECB is the home state regulator for significant institutions and works with the Central Bank to supervise these bodies. A credit institution will be considered significant if any one of the following conditions is met:
- the total value of its assets exceeds €30 billion or – unless the total value of its assets is below €5 billion – exceeds 20 per cent of national gross domestic product;
- it is one of the three most significant credit institutions established in a Member State;
- it is a recipient of direct assistance from the European Stability Mechanism; or
- the total value of its assets exceeds €5 billion and the ratio of its cross-border assets and liabilities in more than one other participating Member State to its total assets and liabilities is above 20 per cent.
Failure to fulfil these criteria notwithstanding, the SSM may declare an institution significant to ensure the consistent application of high-quality supervisory standards.
The SSM designates the licensing of significant institutions as a 'core' activity that is the responsibility of the ECB, though the Central Bank must confirm to the ECB that the requirements set out in Irish legislation have been met by the applicant bank before a licence will be granted.
To obtain a licence for either a significant or a less significant credit institution, the undertaking must satisfy several criteria, including capital requirements and having appropriate and proper procedures in Ireland. Entities wishing to carry on an insurance or reinsurance business also require an authorisation from the Central Bank.
The Central Bank is also the competent authority for the regulation of the securities market in Ireland. In addition, if the securities are listed on the Irish Stock Exchange, they will also be subject to regulation by the Stock Exchange.
Once authorised in Ireland, banking and other services (including investment services under MiFID and payment services under PSD2) can be passported throughout the European Union in reliance on the Irish authorisation. The home state regulator (i.e., the Central Bank in the case of less significant credit institutions and non-bank financial services entities) retains responsibility for the prudential supervision of the entity while the host state regulator (i.e., the regulator in the other EU Member State) will supervise the passported entity's business conduct in that EU Member State.Communications
The communications industry is governed by the Communications Regulation Act 2002 (as amended) and a number of regulations that implement the EU electronic communications reform package (the communications regime). Any entity intending to provide an electronic communications service or electronic communications network in Ireland must notify ComReg, the Irish telecommunications regulator, prior to commencing those services under the general authorisation regime, and be in possession of a general authorisation. Authorised entities must comply with the conditions that are part of their general authorisation, including various wholesale access obligations and consumer law requirements, and more generally with the communications regime. Wireless telegraphy licences are also required for the use of radio frequencies in Ireland.Broadcasting
The broadcasting industry is primarily governed by the Broadcasting Act 2009 (as amended), and is regulated by the Broadcasting Authority of Ireland (BAI).Life sciences
Certain activities carried out in the life sciences sector are subject to regulation by the Health Products Regulatory Authority (HPRA). The HPRA's role is to protect and enhance public and animal health by regulating medicines, medical devices and other health products. Manufacturers of human and veterinary medicines are required to hold a manufacturing authorisation granted by the HPRA. Manufacturing includes activities such as total and partial manufacture, dividing, packaging and repackaging, as well as importing medicinal products into Ireland from a country outside the EEA. The HPRA will only grant a manufacturing authorisation if an applicant has at its disposal suitable and sufficient premises, equipment, facilities, staff, manufacturing operations and arrangements for quality control, record-keeping, handling, storage and distribution.
Subject to some minor exceptions, all medicinal products must be authorised before being marketed in Ireland. An application for a marketing authorisation must be made to the HPRA or the European Medicines Agency, where appropriate.
The HPRA is the competent authority for general medical devices, in vitro diagnostic medical devices and active implantable medical devices. The role of the HPRA is to ensure that all medical devices placed on the Irish market meet the requirements of national and EU legislation, and to monitor the safety of medical devices in Ireland after they are placed on the market.Export of dual-use items
The control of the export of 'dual-use' items and military goods is governed by the Control of Exports Act 2008 and the Control of Exports (Dual Use Items) Order 2009 (as amended), which gives effect to Council Regulation (EC) No. 428/2009 (as amended) setting up an EU regime for the control of exports, transfer, brokering and transit of dual-use items. Dual-use goods and technologies are goods and technologies (including software) that are normally used for civilian purposes but may have military applications. The legislation and requirements are complex and cover a wide range of common products produced by industries dealing with electronics, computers (including software), telecommunications and aerospace technologies. This notably includes products that have some forms of cryptographic functionality. The Export Licensing Unit is the division within the Irish Department of Business, Enterprise and Innovation that is responsible for managing controls on exports of dual-use items destined for countries to which trade sanctions apply.