Transnational Firms

Reasons for Multinational Companies in Ireland

MNCs are a significant part of the Irish economy. This is for a variety of reasons:

• Corporation Tax: Ireland's low corporation tax rate of 12.5% attracts MNCs looking to reduce tax burdens and increase profitability.
• EU Membership: Access to the EU single market provides MNCs with the ability to trade freely with over 450 million consumers.
• English Language: Being an English-speaking country, Ireland facilitates seamless business communication and operations for MNCs.
• Skilled Workforce: Ireland has a highly educated and specialised workforce, offering MNCs access to talent with relevant industry expertise.
• Work of IDA Ireland: IDA Ireland actively supports and incentivises MNCs through investment promotion and comprehensive setup assistance.

Benefits of Multinational Companies for Ireland

MNCs have provided Ireland with a number of benefits including:

• Direct Employment: MNCs provided jobs for 230,000 people in 2019, which helps to retain skilled professionals in Ireland and prevents brain drain.
• Increased Tax Revenue: MNCs contribute significantly to Ireland's tax revenue through corporate taxes, boosting public finances and funding essential services.
• Improved Balance of Payments: MNCs enhance Ireland's balance of payments by exporting goods and services, bringing in foreign currency and supporting economic stability.

*Meta (Owner of Facebook and Instagram) headquarters in Dublin *

Challenges for Ireland caused by Multinational Companies

Ireland has benefitted greatly from MNCs, but our reliance on them has presented some challenges in recent years:

• Profits Repatriated Abroad: MNCs often send their profits back to their home countries, reducing the financial benefits retained within Ireland.
• Irish Firms Can't Compete: Local businesses may struggle to compete with MNCs, which can lead to market dominance by foreign companies and limit opportunities for indigenous firms.
• Potential for MNCs to leave due to Foreign Incentives: Incentives offered by the US to bring American firms back could cause Ireland to lose jobs and tax revenue.