Ireland’s industrial policy relies heavily on outside investment with several tech and pharmaceutical giants having headquarters in the country, attracted by the country’s 12.5% corporate tax rate and other factors.In September, the Irish government said it would legislate for the screening of foreign direct investment, giving effect to a European Union regulation that establishes a framework for vetting and evaluating investments into the EU by third-country companies.
The EU wants to ensure greater controls over investments by outside players that may be heavily state-subsidized with an unfair competitive advantage. Chinese companies have invested heavily in Ireland in recent years and while China has been often cited as a cause for concern internationally, the rules do not single out any particular country. Leo Varadkar, Ireland’s minister for enterprise, trade and employment, said that FDI remains a key part of the country’s economic strategy but it needs to protect against “strategic assets falling into the hands of unfriendly foreign governments.”
