Ireland’s economy has experienced significant growth, largely driven by foreign direct investment (FDI) from U.S. multinationals. In 2024, corporate tax revenues reached €37.5 billion, a substantial increase from €4.6 billion a decade earlier. However, this reliance on U.S. companies has raised concerns, especially with potential policy shifts under the current U.S. administration.

Citizenship & residency

Ireland continues to offer several avenues for residency and citizenship:

• Immigrant Investor Programme (IIP)
  While the IIP was closed to new applicants in February 2023, existing participants continue to benefit from its provisions.
  

• Start-up Entrepreneur Programme (STEP)
  This program remains active, allowing entrepreneurs with innovative business proposals and funding of at least €50,000 to apply for residency.
  

• Naturalization
  Individuals can apply for Irish citizenship through naturalization after five years of lawful residence, subject to meeting specific criteria.
  

These initiatives aim to stimulate economic growth by encouraging investment and entrepreneurship.

2025 Tax reforms: key highlights

Corporate tax enhancements

• Effective January 1, 2025, Ireland introduced a participation exemption for foreign-sourced dividends from EU/EEA and tax treaty jurisdictions, simplifying the tax treatment for multinational companies.

• The first-year payment threshold under the Research and Development (R&D) tax credit regime increased from €50,000 to €75,000, providing additional support for companies investing in innovation.

• A new corporation IPO expense tax deduction of up to €1 million is available for expenses related to a company’s first listing on an Irish or EEA stock exchange, effective from January 1, 2025.

Incentives for start-ups and Investors

• The annual investment limit eligible for relief under the Employment Investment Incentive (EII) doubled from €500,000 to €1 million.

• The Start-Up Relief for Entrepreneurs (SURE) increased to a maximum of €140,000 per year, or a total of €980,000 over seven years.

• The lifetime limit on gains eligible for Capital Gains Tax (CGT) relief for angel investors in certain innovative start-ups increased from €3 million to €10 million, encouraging greater investment in early-stage businesses.

Sector-specific tax credits

• A new 20% corporation tax credit was introduced for unscripted film (audio-visual) productions, with a maximum qualifying expenditure of €15 million per project. Additionally, the Scéal Uplift provides an 8% uplift to the existing film credit for certain feature film productions, resulting in a tax credit rate of 40% for projects with qualifying expenditures up to €20 million.

Strategic considerations for prospective residents and investors

While Ireland offers a favorable tax environment and robust economic opportunities, potential residents and investors should be aware of certain challenges. Delays in infrastructure development and housing shortages have been highlighted as areas needing improvement to maintain Ireland’s attractiveness to foreign investment. Further, Ireland’s significant reliance on U.S. multinationals for economic growth poses risks, especially in light of potential policy changes in the U.S.

Connect with us for more information and how these issues might impact you & your organization.