Banking in Ireland, Dublin International Financial Center

by Mariska Clark on April 5, 2009

Ireland is a Member State of the EU. Its laws are based on common-law legislation and EU laws as Ireland has to comply at the national level with the European directives.

It has to be commenced with the statement that Ireland is not obviously included in the list of offshore banking centers. A majority of offshore banking centers developed completely different patterns in comparison to those present in Ireland. Ireland was never a tax haven and as a result its regulatory instruments are closer to that of the more traditional financial centers such as London and New York.

Notwithstanding this fact this state created a taxation and regulatory environment which helped it to attain the level of top Offshore Banking Irelandoffshore tax jurisdictions. Moreover, Dublin has become an international financial services center with the establishment of the International Financial Services Center (IFSC). A similar environment is present at the Shannon Airport Free Trade Zone.

Ireland’s incentives as an offshore banking center include: a comprehensive double tax treaty network; 10 per cent rate of tax specific types of activity including financial services out of Dublin and Shannon; availability of labor, skilled in financial services and competitive cost structures.

Also it has to be mentioned that there is no discrimination against foreign-owned companies and subject to compliance with relevant legislation, a foreign company is free to locate and engage in business anywhere in the country.

The relevant legislation that targets certain financial activities to qualify for 10 per cent rate of tax includes inter alia banking services in foreign currencies; fund management; insurance and reinsurance; tracery management; financing services; financial advice; back office operations etc.

The Irish Central Bank is responsible for licensing and supervision of all banks. It also regulates the activities and services exercised by the banks. Compliance with the regulation is monitored thorough the submission of monthly report by the banks. The Irish Central Bank Act conferred to the Central Bank a general supervisory role of all companies which undertake their activity in the IFSC, Thus, companies which operate in the IFSC of Dublin but not regulated under certain legislation will be regulated and supervised by the Central Bank’s abovementioned general supervisory role.

The fact that Ireland is a Member State of the EU gives it in terms of access to the integrated market an advantage over other offshore banking centers located elsewhere. Moreover, the adaptability of the existing financial services, the quality of these services and the authority’s approach secured for this jurisdiction a strong position if the offshore banking sphere.

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