YEARBOOK & DIRECTORY
Finance Dublin Yearbook 2025
Is the current geopolitical environment an opportunity or a threat for Ireland’s finance services sector?
COLIN FARRELL, Financial Services Tax Leader, PwC Ireland, says that the Government’s Programme for Government, the Funds review recommendations and a simplification agenda from a tax and regulatory perspective will provide a blueprint for continued success.
At a time of rapid and profound change in the international business landscape, Ireland as a small, open economy is particularly vulnerable. This is further exacerbated by our FDI-led economic model and our reliance on US investment therein. With these threats firmly now on the horizon, it is imperative that Ireland seeks to diversify and strengthen the other component parts of its economic offering, and Ireland’s financial services sector can play a crucial role in this regard.
The financial services industry is a vital contributor to the economy, with over 8,800 companies employing more than 120,000 people and generating €6.8 billion annually in tax revenues. The prevailing opinion in Ireland and key global financial centres is that there is potential for additional expansion in this sector within Ireland. However, this growth should not be assumed to be guaranteed. International competition is intensifying in what is a highly mobile industry as many jurisdictions seek to attract inward investment that creates high value jobs. Furthermore, trends such as the increased use AI and offshoring of more routine roles?continue to gather pace. Consequently, it is important that we remain innovative and forward looking to ensure we, as a country, continue to move up the value curve to protect and grow this sector.
It is encouraging to see the new Irish Government recognising this with the Programme for Government containing many positive measures to achieve this objective. The measures include a stated aim to create 9,000 new jobs in international financial services by 2030, along with a continued focus on developing regional financial services centres in this context, many of which are already scaling significantly. Other positive enabling measures included in the Programme for Government that will support Ireland’s job creation ambition in the financial services, include commitments to publish an implementation plan with respect to the Funds Review recommendations, simplify and modernise our regulatory framework, attract private market investment into our economy, establish a National Fintech Hub and become a leading hub for Sustainable and Green Finance. If the Government can deliver on these commitments, I believe the scale for growth in this sector can support the job creation ambition in the Programme for Government.
Another geopolitical sub-plot that should be closely monitored over the months ahead is the possible resetting of EU/UK relations. Amid increasing global security and trade challenges, the UK, under a new Labour government, has sought to deepen ties with its European neighbours. Addressing a meeting of Eurozone finance ministers Chancellor Rachel Reeves outlined her belief that “a closer economic relationship between the UK and the EU” would bring economic benefits to both sides. Trade in financial and other business services between Ireland and the UK is worth an estimated ?24bn annually. These strong financial services ties have been forged over a period spanning several centuries in a mutually beneficial way. A close relationship between the EU and the UK is undoubtedly a good thing for the Irish financial services sector.
As well as delivering on the commitments in the Programme for Government, a separate body of work is required to ensure that the operating environment for financial services businesses is simplified. The cost of doing business and administrative requirements in a jurisdiction is a very significant factor when companies are deciding where to invest. After years of significant tax and regulatory reform, it is timely to take a step back and assess how we can ease the administrative burden on taxpayers whilst maintaining the original policy objectives?for such reform. This aligns with the stated objectives of the new European Commission under proposals that will cut red tape and simplify EU rules for citizens and business.
I have been encouraged in this context to see the Government take positive steps towards enhancing Ireland’s reputation as a holding company jurisdiction with the introduction of a dividend participation exemption and in a similar vein, the recent public consultation in respect of the tax treatment of interest in Ireland is to be welcomed. The complexity of Ireland’s interest regime is widely recognised including by Minister Chambers in his Budget 2025 speech and needs to be simplified.
Addressing branch taxation should be a matter of priority to further enhance Ireland’s appeal to the financial services sector. The current tax-and-credit system is time-consuming and administratively complex without any positive impact on Ireland’s Exchequer receipts.
Amid the backdrop of an increasingly uncertain geopolitical environment, Ireland must take meaningful action to bolster its economic offering. Ireland’s financial services sector has achieved remarkable growth over the past three decades and can play a vital role in this endeavour. The Programme for Government and a simplification agenda from a tax and regulatory perspective provides the blueprint for success. Now, it is a case of delivering against that blueprint and there has never been a better time to do it.
Colin Farrell: " I have been encouraged in this context to see the Government take positive steps towards enhancing Ireland's reputation as a holding company jurisdiction with the introduction of a dividend participation exemption."
The financial services industry is a vital contributor to the economy, with over 8,800 companies employing more than 120,000 people and generating €6.8 billion annually in tax revenues. The prevailing opinion in Ireland and key global financial centres is that there is potential for additional expansion in this sector within Ireland. However, this growth should not be assumed to be guaranteed. International competition is intensifying in what is a highly mobile industry as many jurisdictions seek to attract inward investment that creates high value jobs. Furthermore, trends such as the increased use AI and offshoring of more routine roles?continue to gather pace. Consequently, it is important that we remain innovative and forward looking to ensure we, as a country, continue to move up the value curve to protect and grow this sector.
It is encouraging to see the new Irish Government recognising this with the Programme for Government containing many positive measures to achieve this objective. The measures include a stated aim to create 9,000 new jobs in international financial services by 2030, along with a continued focus on developing regional financial services centres in this context, many of which are already scaling significantly. Other positive enabling measures included in the Programme for Government that will support Ireland’s job creation ambition in the financial services, include commitments to publish an implementation plan with respect to the Funds Review recommendations, simplify and modernise our regulatory framework, attract private market investment into our economy, establish a National Fintech Hub and become a leading hub for Sustainable and Green Finance. If the Government can deliver on these commitments, I believe the scale for growth in this sector can support the job creation ambition in the Programme for Government.
Another geopolitical sub-plot that should be closely monitored over the months ahead is the possible resetting of EU/UK relations. Amid increasing global security and trade challenges, the UK, under a new Labour government, has sought to deepen ties with its European neighbours. Addressing a meeting of Eurozone finance ministers Chancellor Rachel Reeves outlined her belief that “a closer economic relationship between the UK and the EU” would bring economic benefits to both sides. Trade in financial and other business services between Ireland and the UK is worth an estimated ?24bn annually. These strong financial services ties have been forged over a period spanning several centuries in a mutually beneficial way. A close relationship between the EU and the UK is undoubtedly a good thing for the Irish financial services sector.
As well as delivering on the commitments in the Programme for Government, a separate body of work is required to ensure that the operating environment for financial services businesses is simplified. The cost of doing business and administrative requirements in a jurisdiction is a very significant factor when companies are deciding where to invest. After years of significant tax and regulatory reform, it is timely to take a step back and assess how we can ease the administrative burden on taxpayers whilst maintaining the original policy objectives?for such reform. This aligns with the stated objectives of the new European Commission under proposals that will cut red tape and simplify EU rules for citizens and business.
I have been encouraged in this context to see the Government take positive steps towards enhancing Ireland’s reputation as a holding company jurisdiction with the introduction of a dividend participation exemption and in a similar vein, the recent public consultation in respect of the tax treatment of interest in Ireland is to be welcomed. The complexity of Ireland’s interest regime is widely recognised including by Minister Chambers in his Budget 2025 speech and needs to be simplified.
Addressing branch taxation should be a matter of priority to further enhance Ireland’s appeal to the financial services sector. The current tax and-credit system is time-consuming and administratively complex without any positive impact on Ireland’s Exchequer receipts.
Addressing branch taxation should be a matter of priority to further enhance Ireland’s appeal to the financial services sector. The current tax-and-credit system is time-consuming and administratively complex without any positive impact on Ireland’s Exchequer receipts.
Amid the backdrop of an increasingly uncertain geopolitical environment, Ireland must take meaningful action to bolster its economic offering. Ireland’s financial services sector has achieved remarkable growth over the past three decades and can play a vital role in this endeavour. The Programme for Government and a simplification agenda from a tax and regulatory perspective provides the blueprint for success. Now, it is a case of delivering against that blueprint and there has never been a better time to do it.
Colin Farrell, is Financial Services Tax Leader, PwC Ireland.
He specialises in international tax structuring and assists investment banks and asset managers structure and manage tax aspects of global asset management businesses. He also works across a broad base of private equity and private debt funds, hedge funds, special purpose vehicles and traditional funds.
He specialises in international tax structuring and assists investment banks and asset managers structure and manage tax aspects of global asset management businesses. He also works across a broad base of private equity and private debt funds, hedge funds, special purpose vehicles and traditional funds.