Brian Lenihan
Finance minister Brian Lenihan unveiled the recovery plan that showed financial services make up 20% of the country's exports. It said politicians were aiming to grow the sector with plans for green and Islamic finance ventures.
At the end of October, the country had a record €886bn domiciled in funds on its shores, according to the Irish Funds Industry Association. All the major global custodians and fund administrators have bases in Dublin and between them employ up to 20,000 people. This brings in significant revenue through corporation and income tax receipts.
Brian Dillon, a partner at Dublin-based legal firm Dillon Eustace, said: "The funds industry should not be affected by the economic well-being of the country. Ireland is a regulated domicile for offshore assets subject to the segregated custody of foreign-owned banks that are not dependent on the economic health of Ireland."
He added: "Irish-domiciled funds are tax exempt and the competitiveness of the industry is unlikely to be jeopardised by a change in the 12.5% corporate tax rate which has been robustly defended by the government in the recovery plan."
Gary Palmer, chief executive of the IFIA , said: "We still have the solutions, the innovation, operational efficiency and global distribution capability – and we continue to attract fund managers to the domicile."
Declan O'Sullivan, partner at international law firm Dechert, said 70 new fund promoters from 14 different countries had moved to Ireland since the start of the year. He said: "There are prospects for renewed growth, even in the economic downturn."
He added that at the height of the boom, it had been difficult to find, retain and adequately remunerate personnel, as the market had been so competitive, but after redundancies, salary reductions and lower costs of doing business, administrators were having an easier time. He said: "The crisis has allowed us to recalibrate ourselves – we have looked at the cost and availability of qualified staff."
Palmer said: "It has not happened over the past week, but business is cheaper here than it was – this is the silver lining. The challenge we have is that the country is in good shape, if you look at exports and other economic aspects – supporting the domestic banks has got us into this position."
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