19 November, 2022
Ireland is now the seventh most attractive private business environment in Europe, according to the latest PwC EMEA Private Business Attractiveness Index. The country enjoyed one of the largest increases among all nations, rising from 14th place in 2021.
The Index ranks the relative attractiveness of private business environments in 33 EMEA countries based on a range of criteria including macroeconomics, private business landscape, tax and regulatory environment, environmental, social and governance (ESG) metrics, public health, education, skills and talent, technology infrastructure and the new start-up ecosystem category.
The significant jump in Ireland’s overall ranking is largely due to increases in public health metrics and the introduction of new key metrics to the Index. The Index findings show that:
Despite performing well in overall macroeconomic metrics, 2022 saw Ireland drop from fifth to 15th place in terms of the inflationary pressures on the Irish economy. With many private businesses feeling the impact of inflationary pressures during 2022, this is a worrying trend and one that will have a negative impact on the private business landscape.
While Ireland continues to be ranked fourth in terms of the corporate tax metric, it has slipped further in terms of income tax and indirect tax metrics to 22nd and 24th place respectively. Both income and indirect tax rates have a significant macroeconomic impact on the performance of private businesses, more so than the headline rate of corporate tax. Ranking in relative terms behind other territories in these key tax and regulatory metrics has a negative impact on the Irish landscape for private businesses and entrepreneurs.
Ireland ranked 30th out of 33 EMEA countries for funding for the private sector as a percentage of GDP. The index also suggests that more needs to be spent on education, ranking Ireland 31st out of 33 EMEA countries for government expenditure on education.
Finally, Ireland ranked 25th out of 33 EMEA countries for cybersecurity. This suggests that even more needs to be done to protect private businesses from cyberattacks.
For EMEA countries overall, four categories stand out as having a high correlation with countries’ overall ranking:
Virtually all of the jurisdictions in the higher echelons of the table perform strongly in these areas, in some cases making up for lower scores in other categories.
Conversely, the tax and regulatory regime and macroeconomic data categories, or even GDP per capita, have less of an overall bearing on the performance of the Index. PwC’s Private Business Attractiveness Index underlines that, to attract private business and entrepreneurs, jurisdictions need to strike an even balance across all categories.
The data reveals that to become more attractive to private businesses, Ireland cannot focus narrowly on leading in just one or two areas.
Instead, we must strike a balance across the key attributes sought by private businesses, from education and skills to funding and support, technology, infrastructure and beyond.
PwC’s EMEA Private Business Attractiveness Index rankings are based on scores across 51 metrics in eight categories. We use credible, publicly available sources that measure tangible, on-the-ground activity in each country, both quantitatively and qualitatively. Our research gives us a unique capacity to help you succeed in this environment. Contact us today.