Earlier today, the Taoiseach launched the Governments IFSC Strategy 2011-2016. This document, originally heralded in the National Recovery Plan 2011-2016, represents Ireland's 5 year plan for its international financial services industry, more commonly known as the IFSC. A document to be welcomed by the industry's various stakeholders, it represents a clear statement of intent and commitment by the current Irish Government to this key industry, summarised as a "single, credible target: create more than 10,000 net new jobs, protecting existing employment and business, over the next 5 years, built on sustainable and responsible foundations."

The paper acknowledges that, while the foundations of success for the IFSC remain in place, changes in the global marketplace, including increased international competition from both developing and established financial centres, mean that the IFSC could face a demise if specific and swift action is not taken. The report outlines some of these actions and critically, has the stamp of approval from a number of important participants in this market, most notably, the Central Bank.

Some of the key highlights include:

• Acknowledgement that Ireland's tax regime, across all tax heads, must remain competitive, transparent and responsive. The report reiterates the Government's commitment to maintaining the 12.5% corporate tax rate, continuing to expand the double tax treaty network and further developing Ireland's reputation as a responsible on-shore tax jurisdiction.
• Recognition of the need to continue to develop a credible, responsible and internationally respected regulatory regime which will facilitate financial innovation whilst imposing proportionate and appropriate regulation in a balanced fashion.
• Affirmation of the need to attract key talent to Ireland with a view to providing a labour force pool with relevant expertise in order to fuel growth of the sector. In addition to fostering the development of appropriate skills, bearing in mind the approaches of competitor locations, the Government indicates that the current personal tax regime may be reviewed to ensure that Ireland is a competitive location for attracting the key industry talent to drive the sector forward. This is likely to involve enhancement to the existing tax regime for expatriates.
• Commitment to facilitating the development of growth areas within key existing financial services industries operating in the IFSC. The concept here is to ensure Ireland is dynamic in its approach to this industry sector by being to the forefront in developing new business lines, facilitating first mover advantage and attracting investment from emerging markets.
• Realisation that in order to ensure Ireland's long term competitiveness is sustainable, there has to be a commitment to control business costs. Building on the advances made to date in reducing the costs of doing business in Ireland, the Government outlines how it plans to protect and improve on these advances within its remit.
• Confirmation that a coordinated response and approach to international markets by Government and industry stakeholders is critical in the implementation of this strategy.

The report specifically outlines opportunities for growth under the headings of insurance, funds, asset management, international banking and cross border pensions. It showcases specific initiatives covering pan-European hub locations on the insurance side, innovations in the funds space, further development of aircraft leasing and the "Green" IFSC agenda, attraction of IP commercialisation and R&D activities into Ireland (linking this with complimentary activity in the global entertainment and media market which is already looking to Ireland), etc. The report acknowledges the need to embrace new investors and developments in emerging markets - the attraction of private equity and VC investors in addition to generating potentially high-value activities could also provide a broader benefit to the entrepreneurial needs of the domestic market, while the Middle East and Asia offer opportunities for Ireland to partner with investors in those regions under the umbrella of Islamic finance activities.

As a global organisation, proud to be at the heart of financial services, PwC welcomes the announcement of a clear and committed strategy for the international financial services industry in Ireland. Implementation will be key and we look forward to doing our part to support the future growth and success in this sector.

If you would like any further insight into what this means for Ireland's international financial services industry, please feel free to contact me or your regular PwC contact.

John O'Leary