your business in ireland – the competitive european location for international shipping services Over 1,200 international companies have chosen Ireland as their preferred location. Isn’t it time you found out about the opportunities for your business in Ireland?
welcome The attractions Ireland has to offer your business are presented in the following sections.
Doing Business in Ireland
Irish Tonnage Tax
Irish Ship Finance
Taxation Environment
We invite you to take a look and assess for yourself the opportunities, business environment, and advantages available by joining our maritime cluster sector. Then decide whether your company wants to emulate the success achieved by over 1,200 global ďŹ rms based in Ireland.
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Welcome to The Irish Maritime Development Office (IMDO)
dear user, I’m delighted to welcome you to our electronic information brochure which I believe will provide you with a succinct overview of the role and support services provided by the IMDO to Industry, Government and the wider Irish economy. The Irish shipping services sector directly employs just under 10,000 maritime professionals across a multifaceted range of industries, from marine commerce, ďŹ nance, banking, management, shipowning and shipbroking to short sea services, maritime logistics, port industries and maritime education.
The IMDO development team engage and work with national and international companies on a daily basis both in Ireland and overseas. Our interface with industry enables us to convert our market intelligence into consistent, informed, expert policy advice to the Government on issues and matters impacting on the development and future of the sector. The i-bro will provide you with a direct interactive platform to access and engage further with IMDO services. The IMDO team and I look forward to supporting your business in Ireland. Yours sincerely, Glenn Murphy, Director.
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Welcome to The Irish Maritime Development Office (IMDO)
The Irish Maritime Development Office (IMDO) The Irish Maritime Development Office (IMDO) was established by statute in December 1999 and commenced operations in July 2000. It is incorporated within the Marine Institute and based in Dublin. The office is Ireland’s dedicated development, marketing, and promotional agency for the shipping, ports and shipping service sectors. The IMDO has a legislative mandate that includes amongst its statutory mandate the following functions: • To advise the Minister for Transport on the development and the co-ordination of policy in the
shipping and shipping services sectors, so as to protect and create employment. • To advise the Minister on development and coordination of policy and to carry out policy as may be specified by that Minister relating to the Ports and Ports services sector. • To promote and assist the development of Irish shipping and the Irish shipping services and seafarer training. • To support and market the shipping and shipping services sectors. • To carry out policy as may be specified by the Minister relating to the shipping and shipping services sectors.
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Welcome to The Irish Maritime Development Office (IMDO)
In this context “shipping services” is deemed to include:
• Ship Management • Technical Management • Commercial Management • Crew Management • Port Activities & Logistics • Ship Finance and Mortgages • Marine Insurance • Maritime Legal Services • Ports • Ports services • Ship Broking • Ship Chartering • Short Sea Shipping.
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Doing Business in Ireland
Doing Business in Ireland Section 1.1 Section 1.2 Section 1.3 Section 1.4
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1.1 Doing Business in Ireland
maritime industry development The Irish government has been committed to the development of the maritime transport sector through direct investment and the introduction of various incentives for training, employment, and business including the following:
• The establishment of a dedicated maritime development agency, the IMDO in December 1999. • The introduction of Irish tonnage tax in 2002. • Social insurance refunds to Irish companies to encourage the employment of seafarers. • Seafarers Additional Income Tax Relief. • An investment of €58 million in the National Maritime College of Ireland. • Cost neutral training of deck officers, engineers and ratings funded through the innovative ISEAS grant scheme.
Section 1.1 Section 1.2 Section 1.3 Section 1.4
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1.1 Doing Business in Ireland
Over 50% of people employed in the Irish Marine Sector work in Maritime Transport.
• Total employment was estimated at 8,300 in Maritime Transport services and 14,000 when other direct transport services were included. • The maritime services sector contributed to more than 50% of the combined direct turnover of companies employed in the sector and average employee turnover was estimated as €210,000. • The shipping sector also had the highest economic output and the highest economic employee multiplier of all of the marine sectors. • Ireland is now one of the top 15 ship finance locations in the world.
Section 1.1 Section 1.2 Section 1.3 Section 1.4
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1.2 Doing Business in Ireland
labour market development Ireland has one of the youngest populations in Europe with over 36% under the age of 25 years. • Almost 1 million people are in full-time education in Ireland. • According to the IMD World Competitiveness Report 2007, Ireland’s educational system scored highest in the world for meeting the needs of a competitive economy. • Ireland is in the enviable position of having a healthy and growing number of applicants for seafaring training.
Section 1.1 Section 1.2 Section 1.3 Section 1.4
• Ireland is one of the few European countries still training and placing ratings albeit aboard specialist vessels requiring a high level of boatmanship skills. • The National Maritime College of Ireland (NMCI) is one of the world’s premier seafarer training facilities with state-of-the-art simulator technology at its disposal. • Through the Irish ISEAS fund the Irish government has made training cost neutral for shipping firms wishing to take on NMCI cadets. • The Irish government has also been investing heavily in career training for officers and engineers wishing to further their education.
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1.3 Doing Business in Ireland
infrastructural investment In 2007 the Irish government launched its second six-year National Development Plan. The government is investing over €184 billion to 2013 in social and economic infrastructure including investments in the following areas:
• €54.6 billion for investment in economic infrastructure • €49.6 billion for social inclusion measures (children, people with disabilities, etc.); • €33.6 billion for social infrastructure (housing, health, justice, etc.); • €25.8 billion for human capital (schools, training, higher education, etc.) • €20 billion for enterprise, science and innovation.
Section 1.1 Section 1.2 Section 1.3 Section 1.4
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1.4 Doing Business in Ireland
innovation, research & development In addition to the governments capital investment in education under the National Development Plan 2007-2013) the Irish Government announced in June 2006, a new Strategy for Science, Technology and Innovation, involving an investment of €8.2 billion over the next seven years.
Section 1.1 Section 1.2 Section 1.3 Section 1.4
The strategy aims for: • A doubling of postgraduates, with 1,000 PhDs every year by 2013 and a further 315 postgraduates in the humanities and social sciences. • Five main areas of the economy will be opened up for hugely enhanced R&D - agri-food, marine industries, energy, healthcare and the environment. • To attract, develop and support enterprise funding forms through the provision of corporate tax credits for research and development and one of the most attractive jurisdictions in the world for intellectual property taxation.
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Irish Tonnage Tax
Irish Tonnage Tax Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5
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2.1 Irish Tonnage Tax
why irish tonnage tax? Irish Tonnage Tax is a unique and powerful incentive. It is based on a notional profit taxed at a 12.5% corporation tax. This incentive offers an unrivalled taxation environment where you will benefit from:
• Flexibility to invest and to choose the methods of financing most suitable to your company • Certainty regarding your company’s annual tax liability • Clarity in terms of how it affects your company’s financial structure • Competitiveness in a global marketplace where rivals seek out every cost advantage • Compatibility with the fiscal regimes of other countries. Ireland has an excellent network of tax treaties primarily with EU and OECD countries.
Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5
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2.2 Irish Tonnage Tax
who qualifies? The shipping industry operates complex corporate structures and complicated business relationships. The Irish administration recognises this and the tax is administered by the Revenue CommissionersIncentives Branch so that you can discuss your business plan in a supportive environment.
Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5
Shipowners, Bareboat Charterers and Ship Managers qualify for Irish tonnage tax if they: • Operate qualifying ships • Are within the charge to Irish Corporation Tax • Undertake the strategic and commercial management of those ships in Ireland.
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2.3 Irish Tonnage Tax
what qualifies? The Irish tonnage tax is a flexible and friendly regime that covers income from a broad range of activities including the following:
• Carriage of Passengers and Cargo. • Ancillary Income ie. income from transport provided for non–tonnage tax activities. cable–laying diving support, construction work, etc. • Towage, Salvage and Marine Assistance. • Chartering. • Ship Management Activities & Ship Managers can qualify. • Commercial Management and Other Activities. • Provision of Services and Goods on Board. • Franchise Income.
Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5
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2.4 Irish Tonnage Tax
how will irish tonnage tax affect your tax bill? Ultimately it means that most companies generating profit can avail of a:
• Essentially, if you operate a commercial merchant seagoing vessel, it qualifies.
• Vastly reduced tax bill, a bill that has no relationship to the real profits generated by the company.
• The Irish Tonnage Tax regime will allow your company to benefit from a broad range of income.
• A tax bill that alters only when the relevant fleet tonnage changes.
• Extend Your Time in Tonnage Tax: you can elect to stay in the Irish Tonnage Tax for a further 10 years AT ANY TIME while in the regime.
• PLC’s can benefit by announce high profits without a correspondingly high tax liability, simplifying tax planning, reaping all the benefits of shareholder value and achieving greater earnings per share,
Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5
and the resulting possibilities to access new finance and investment.
• A Euro Economy. • An Excellent Network of Double Taxation Treaties.
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2.5 Irish Tonnage Tax
calculating your tonnage tax Calculating you tax bill could not be easier. The following table lists the ‘Fixed profit per day’ rate. • Take your vessels net tonnage and apply the rates according to the formula provided. • When you have your notional ‘profit’ figure apply Ireland’s standard corporation tax rate of 12.5%. • You now have your tax bill.
Section 2.1 Section 2.2 Section 2.3 Section 2.4 Section 2.5
Fixed Profit Rates
Fixed profit per day
Scale of charges based on vessels net tonnage For each 100 tons up to 1,000 net tons
€1.00
For each 100 tons between 1,000 and 10,000 net tons
€0.75
For each 100 tons between 10,000 and 25,000 net tons
€0.50
For each 100 tons above 25,000 net tons
€0.25
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Irish Ship Finance
Irish Ship Finance Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5
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3.1 Irish Ship Finance
market development Ireland is possibly Europe’s most stable, efficient, and well- regulated financial services environment. The country has a breadth of expertise that stretches across the finance spectrum and includes the following:
• It is one of the world’s fastest growing locations for shipping mortgage finance. • 70% of global aviation leasing is carried out in Ireland. • 30% of global fund management activity is managed from Ireland. • Ireland is one of the leading jurisdictions for specialist shipping structured finance. • The world’s first maritime securitisation was structured out of Ireland. • Ireland’s international ship finance portfolio has grown from a small local focus to approximately €3bn in 5 years.
Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5
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3.2 Irish Ship Finance
debt financing in ireland Ireland has become one of the world’s fastest growing locations for Debt financing entering the Top 15 global locations for ship financing in 2008.
Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5
Debt ďŹ nancing is offered by a range of banks dealing across a broad range of sectors from large bulk, container, tanker and LNG to Offshore supply, standby, etc. Irish based banks also specialise across a range of deal sizes.
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3.3 Irish Ship Finance
structured finance and leasing Ireland is one of the world’s global centres for big ticket leasing, financing and administration. With customer focused government administration and service-oriented Exchange, it is the location of choice for bond issues and public listings.
• Ireland, as a low tax EU member with and excellent range of tax treaties, is the location of choice for a range of bond issues and securitisations. • From the world’s largest shipping mortgage securitisations to shipping bond issues to raising of capital for containerships through securitisation, Ireland is fast becoming the premier jurisdiction for large structured financing • As well as being the global centre for aircraft leasing, cross border financing and leasing expertise extends to many other asset classes including shipping. • Several structuring opportunities exist for assets leasing into Irish companies, particularly tonnage tax companies.
Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5
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3.4 Irish Ship Finance
funds in ireland Ireland is one of the world’s largest locations for fund management and administration. In 2007, the 12 largest Irish based investment firms managed a combined portfolio of €252 billion.
Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5
• The Irish Stock Exchange is recognised globally as the stock exchange of choice for listing hedge funds, there are significant marketing advantages for raising investment with an EU Exchange. • The worlds largest shipping hedge funds are listed on the Irish Stock Exchange including Clarkson Hedge Funds and Russell Global Shipping Funds. • With over 30% of the world’s fund management occurring in Ireland, the ir is a wealth of advice and expertise to draw upon.
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3.5 Irish Ship Finance
latest market news Please visit our website to read up to date news and information on Ireland’s shipping industry.
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Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5
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Taxation Environment
Taxation Environment Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6
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4.1 Taxation Environment
ireland’s economic success Ireland is been well-known for its positive and competitive commercial environment. The key to Ireland’s economic success story lies in a combination of:
• Business-friendly government policies. • General openness to new business. • Positive taxation environment.
Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6
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4.2 Taxation Environment
corporation tax rates Ireland’s current standard-rate corporation tax regime is as follows:
• 12.5% for profits generated from Irish trades. • 25% for other profits. • Where a company incurs tax losses, these are generally available for group relief or indefinite carry forward within the company. There are a range of tax relief’s available in relation to intragroup transactions These rates compare positively to the corporation tax rates applicable in many other jurisdictions and with EU average tax rates.
Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6
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4.3 Taxation Environment
holding company regime A new holding company regime has been introduced in Ireland, with effect from 2 February 2004, exempts capital gains arising to Irish resident companies on the disposal of substantial shareholdings in certain corporate subsidiaries.
The tax rate applicable, in the absence of this exemption, would be 20%. The new regime also allows for enhanced foreign tax credit relief on dividend income repatriated to Ireland. Onshore ‘pooling’ of dividend income is permitted when calculating foreign tax credit relief on dividend income from subsidiaries where the holding company owns at least 5% of the ordinary share capital of the subsidiary. In addition, unutilised excess foreign tax credits may be carried forward within the holding company for an indefinite period.
Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6
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4.4 Taxation Environment
withholding taxes Irish withholding tax may apply to cross border payments of dividends, interest and royalties.
However, there are numerous exemptions that may be available under domestic Irish tax law or double taxation agreements to eliminate such withholding taxes. Ireland has an extensive and ever growing network of double taxation agreements.
Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6
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4.5 Taxation Environment
intellectual property There are tax incentives for businesses that develop and manage Intellectual Property Rights (“IPR”) through assignment, licence or otherwise. These include:
• Tax exemptions for Irish resident ‘inventors’ receiving royalty income from certain qualifying patents, where research and development work on the invention, leading to the patent, was carried out in Ireland. • Stamp duty exemption for transfers of IPR, and related goodwill. • Tax credit for qualifying incremental research and development expenditure.
Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6
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4.6 Taxation Environment
preferential financial services rules Ireland has a number of preferential tax regimes applicable to collective investment funds and securitisation.
The tax beneďŹ ts in relation to investment funds include the ability to roll-up the value of the fund tax-free, and withholding tax and stamp duty relief. In relation to securitisations, there is tax deductions for costs including funding costs, and wide-ranging exemptions from withholding taxes and stamp duty.
Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5 Section 4.6
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