Following the Brexit vote and subsequent uncertainty, many financial services firms are choosing to relocate some or all of their operations to centres outside of the UK. Matheson partner and head of the financial institutions group, Darren Maher commented recently on Ireland’s position and potential as a hub for global financial institutions.
“Some firms’ first flurry of interest in Ireland was checked when they encountered the conditions set by the Irish regulators. In particular, an Irish entity must have 'substance' in Ireland, meaning “the firm is adequately resourced and decision making takes place in the Irish entity. However now some financial institutions are viewing these conditions as an advantage. They respect the fact that Ireland has had a credible established financial services sector for years, so our regulator has done everything at least once and knows how to regulate.”
Ireland now has a strong appeal for the insurance sector, payment services and broker dealers however with investment banking, there is a limit because of concerns about manpower and capacity constraints.
“A lot of financial institutions are well into contingency planning, have made decisions or will do so in the next couple of months, and have picked a jurisdiction – but they don’t want to push the button until they know what is going to happen regarding Brexit. I don’t think you will see thousands of people moving out of London on day one. However over the course of the next five or 10 years, as people retire or resign, will they be replaced in London or in Dublin or elsewhere, where the cost of hiring may be cheaper? There is also the possibility that post-Brexit, financial institutions that might have automatically chosen London will now look to establish a base elsewhere in Europe.”