Ireland

Originally published: Jun-22-2008

Official Name: Republic of Ireland

Internet Domain: .ie
International Dialing Code: +353
Time Zone: GMT in winter, GMT+1 in summer (summer runs March to October)

Table of Contents

Location and Size

The Republic of Ireland is located in Western Europe, occupying five-sixths of the island of Ireland in the North Atlantic Ocean, west of Great Britain. The other one-sixth of the island is occupied by Northern Ireland. The land area of the Republic of Ireland is 70,282 sq. km. (27,136 sq. mi.), which is slightly larger than the U.S. State of West Virginia.

Government

A parliamentary republic, the Republic of Ireland gained independence from Great Britain on December 6, 1921 and is a sovereign, independent, democratic state with 26 counties.

Branches:

• Executive: president, Mary McAleese, is the chief of state, which is a largely ceremonial role; taoiseach (prime minister), Brian Cowen, is head of government and is elected by the lower house of Parliament.
• Legislative: bicameral national Parliament including a House of Representatives (lower house) and Senate.
• Judicial: Supreme Court.

The Republic of Ireland is a distinct entity separate from Northern Ireland, which is still part of the United Kingdom along with Scotland and Wales.

Legal System

Ireland’s legal system is based on English common law, substantially modified by indigenous concepts. The law provides for judicial review of legislative acts in Supreme Court. Ireland has not accepted compulsory ICJ (International Court of Justice) jurisdiction. (What does this mean?)

The Companies Act 1963 (amended 1990) is the most important body of law dealing with commercial and bankruptcy law and is applied consistently by the Irish courts. Irish bankruptcy laws give creditors a strong degree of protection.

People

• Population: 4,156,119 (July 2008 est.)
• Population growth rate: 1.133% (2008 est.)
• Languages: English, Irish (Gaelic) -- both official languages; English used primarily
• Literacy: 99%
• Ethnic Make-up: Celtic, English
• Religions: Roman Catholic 88.4%, Church of Ireland 3%, other Christian 1.6%, other 1.5%, unspecified 2%, none 3.5% (2002 census)

Economy

Ireland boasts a vibrant, globalized economy, with GDP per capita second only to Luxembourg's in the European Union (EU). Since joining the European Community in 1973, rapid growth has transformed Ireland from a largely agricultural society into a modern, high-technology economy.

The "Celtic Tiger" period of the mid to late 1990s saw several years of double-digit GDP growth, driven by a progressive industrial policy that boosted large-scale foreign direct investment and exports. GDP growth dipped during the immediate post-9/11 global economic slowdown, but has averaged roughly 5% yearly since 2004. Per capita GDP is currently 40% above that of the four big European economies and the second highest in the EU behind Luxembourg. In 2007, per capita GDP surpassed that of the United States.

The exports sector is dominated by foreign multinationals in technology and chemicals. While it remains a key component of Ireland's economy, construction has most recently fueled economic growth along with strong consumer spending and business investment.

Reliable resources expect GDP growth to slow sharply in 2008-09, mainly because of the ongoing slowdown in the overheated property sector. If the decline in house prices were to accelerate, a recession would be likely.

Currency: Euro (EUR)

Leading Markets (2006): US 18.7%, UK 17.9%, Belgium 14.4%, Germany 7.8%, France 5.8%, Italy 4.2%

Leading Exports-commodities: machinery and equipment, computers, chemicals, pharmaceuticals, live animals, animal products

Leading Suppliers (2006): UK 37.5%, US 11.5%, Germany 9.6%, Netherlands 4.6%

Leading Imports-commodities: data processing equipment, other machinery and equipment, chemicals, petroleum and petroleum products, textiles, clothing

Top Industries: steel, lead, zinc, silver, aluminum, barite, and gypsum mining processing, food products, brewing, textiles, clothing, chemicals, pharmaceuticals, machinery, rail transportation equipment, passenger and commercial vehicles, ship construction and refurbishment, glass and crystal, software, tourism

Leading Agricultural Products: turnips, barley, potatoes, sugar beets, wheat; beef, dairy products

Economic Indicators

(e) estimate (f) forecast

Comparative Economic Indicators - 2007

*2008 estimates
** PPP &nash; Purchasing Power Parity

Credit and Collections

Overseas Press & Consultants (OP&C) Evaluation

• Collection Experience: Good-Fair
• Exchange Delays: 2 months
• Preferred Credit Terms: Sight draft
• Minimum Credit Terms: 60 day sight draft

Nearly all shipments to Ireland are on open account. A small percentage is paid for in advance. One importer in three pays locally when due; two out of three pay within a month of due date.

ABC-Amega’s collection experience in Ireland

In ABC-Amega’s experience, uncontested legal actions are very inexpensive (less than Euro 100). However, contested legal actions are very expensive.

Payment Methods

Although the use of bills of exchange is uncommon in domestic commercial transactions between Irish companies, they are sometimes used in international trade. The check, defined as "a bill of exchange drawn on a bank and payable on demand", is more widely used for commercial transactions. It does not provide a foolproof guarantee, however, since issuing an unfunded check is not a criminal offence. SWIFT bank transfers are widely used, as they are quick and efficient. Payment orders issued via the website of the client's bank are a rapidly growing instrument.

Dispute Resolution

Ireland is a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Risk Assessment

Coface Country Risk Rating: A1 -- Watchlisted with negative implication since December 2007. The political and economic situation is very good. A quality business environment has a positive influence on corporate payment behavior. Corporate default probability is very low on average.

Payment behavior remained satisfactory in 2007. Accustomed to living in a strong growth environment, companies could suffer in 2008 from even a limited economic slowdown.

Ducroire Delcredere Political Risk Rating: 1 – lowest risk
Ducroire Delcredere Commercial Risk Rating: A – lowest risk

Business Climate

Ireland has been able to stand out as a model in global competitiveness because of its skilled workforce and tax benefits. The Irish Government has implemented a series of national economic programs designed to curb price and wage inflation, invest in infrastructure, increase labor force skills, and promote foreign investment. Since January 1, 2003, the corporate tax rate for both foreign and domestic firms has been 12.5%.

Transparency of Regulatory System: The Irish Government generally employs a transparent and effective policy framework that fosters competition between private businesses in a non-discriminatory fashion.

Intellectual Property Rights: Ireland is a member of the World Intellectual Property Organization and a party to the International Convention for the Protection of Intellectual Property. Irish intellectual property rights (IPR) law is in compliance with Ireland's obligations under the WTO Trade-Related Intellectual Property Treaty (TRIPs). In fact, Ireland has one of the most comprehensive legal frameworks for IPR protection in Europe.

DVD and CD piracy, however, continues to be a problem. Industry representatives claim that the counterfeit DVD market is 1.5 times the size of the legitimate market. Industry groups believe that light penalties given to counterfeiters in DVD piracy court cases hamper police enforcement efforts. In addition to DVD and CD counterfeiting, industry sources estimate that up to 37% of PC software used in Ireland is pirated.

Conversion and Transfer Policies: Ireland uses the Euro as its national currency and enjoys full current and capital account liberalization. There are no restrictions or reported significant delays in the conversion or repatriation of investment capital, earnings, interest, or royalties. There are no limitations on the import of capital into Ireland. Foreign exchange is easily obtainable at market rates.

Corruption: Corruption is not a serious problem for foreign investors in Ireland. It is illegal for Irish public servants to accept bribes.

Economic Freedom: According to the 2008 Index of Economic Freedom, Ireland’s economy is 82.4% free, making it the world’s third freest economy. Ireland is ranked first out of 41 countries in the European region, and its overall score is much higher than the regional average.

Political Violence: Ireland has not experienced significant spillover of violence or instability from Northern Ireland, especially since the late 1970s and after the cease-fires of 1994. The growth of business investment and confidence in Northern Ireland following the cessation of widespread violence has benefited the Republic of Ireland.

For more detailed information on these topics, visit the 2008 Investment Climate Statement – Ireland, of the U.S. Department of State.

Business Protocol

Business Cards: It is appropriate to present a business card at an introduction.

Appointments: Strive to be punctual, but understand that the Irish have more of a casual attitude toward time. In some cases, if you are a few minutes late to a meeting, it will be overlooked. In other instances, however, your late arrival may cause you to be perceived as a careless, unreliable businessperson --particularly if you are foreign. On the other hand, if you find yourself waiting for your Irish counterparts to arrive, remain patient and accommodating.

Names and Titles: For initial written greetings, last names preceded by 'Mr.', 'Mrs.', or 'Ms.' should be used. In conversation, the Irish tend to move on quickly to a first-name basis. Terms such as 'sir' and 'madam' are rarely used. Professional titles are not prominent in Irish business culture, and are usually dismissed as pretentious.

Conversation: The Irish are enthusiastic conversationalists and debaters and find arguments and opinionated conversation entertaining. Your Irish companions will be quick to let you know if you have introduced a subject that 'crosses the line.' Topics that are controversial include the Catholic Church, the English, and immigrants.

Gifts: Generally, gift giving is not part of Irish business culture.

Meetings and Negotiations: Establishing rapport is important in Irish business culture. Before a meeting proceeds, there is usually a good bit of preliminary “small talk.” Do not expect to transact your business in a hurry.

The Irish primarily buy from the Irish, and secondarily from within their circle of network contacts. As a foreigner, it's generally very hard to break into these networks. It takes time and persistence before you are trusted. You must also be able to offer something that is not available from an Irish supplier.

Aggressive sales techniques are disliked. However, expect to haggle and negotiate over prices.

Acceptable Public Conduct: The handshake is the preferred greeting. Men should refrain from being too physically demonstrative with women. Maintaining personal space is important in this culture. Avoid breaking eye contact with an Irish person when they are talking to you.

Sources for further information on doing business in Ireland

Ask Ireland, Official Gateway to Irish Government agencies and departments

Comprehensive Guide to Selling and Investing in Ireland, Integrated Technology Web, The Portal for Ireland

Doing Business in Ireland, the U.S. Commercial Service in Ireland

Doing Business in Ireland, UHY (36 page PDF)

Embassy of Ireland in the United States

Embassy of the United States in Dublin, Ireland

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This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including Ireland. For further information, contact info@abc-amega.com.

This report represents a compilation of information from a wide variety of reputable sources.

Economic Indicators: Variety of sources including the CIA World Factbook, Coface Country Rating, Economist Country Briefings, Federation of International Trade Associations (FITA) Country Profiles.

Risk Assessment information: Provided with permission by Coface Country Rating. Also Belgian credit insurance company Ducroire Delcredere

Information on credit terms and the probability of prompt payment are provided, with permission, from Overseas Press and Consultants (OP&C) as published in IOMA's Report on "Managing Credit, Receivables & Collections," December 2007.

Historical Exchange Rates: OANDA.com The Currency Site.