Dublin finance job

In its bid to become an international centre for financial services Sydney would do well to study the success of Dublin.

The Irish capital, traditionally better known for brewing than banking, has made itself a financial services capital of the European Union by offering incentives and attractions for the knowledge-based, information-sector enterprises involved in finance.

The government's latest report on the sector, Strategy for the Development of the International Financial Services Industry, reiterates commitment to its promotion of the industry and the continuance of a low-tax regime.

The question of future corporate tax rates has been settled and legislation put in place to introduce a uniform 12.5 percent tax rate from 1 January, 2003.

In 1987 the Irish government established the International Financial Services Centre (IFSC) in Dublin because it saw that the rapid growth of global financial services offered Ireland jobs and revenue if it played a role.

With almost half the population of 3.6 million under 25 years, job creation remains Ireland's economic priority. Hence its active drive to attract more foreign investment.

Ireland has 15 offices of its Industrial Development Agency (IDA), its foreign investment sales force, around the world, including Australia.

The IFSC is a US$640 million development located in central Dublin comprising 1,200,000 sq. ft. of high-quality office space. The original waterfront site of 27 acres had to be extended by 12 acres after ten years in operation.

Today the centre is a vital part of the Irish economy, employing nearly 4,000 people directly. There are almost 400 international financial institutions directly operating from Dublin with a further 350 doing business under the IFSC programme.

Dublin is now the preferred European location for several financial services sectors. It is one of the fastest growing international centres for collective investment fund management. The city also ranks as one of the leading locations for international banking, corporate treasury and some specialised insurance activities.

The centre is serviced by an extensive network of major international banks, brokerages and professional advisors. As a result, leading corporates, such as IBM, Coca-Cola, Hewlett-Packard and Pfizer, have established finance operations there.

Many leading multi-national financial institutions have new operations in the IFSC. They include Citibank, Merrill Lynch, Daiwa, Deutsche Morgan Grenfell, Bank of America, Chase Manhattan, NatWest, Sumitomo Bank, and ABN Amro.

The IFSC is the direct result of the proactive approach by the Irish government towards the growth potential of the international financial services sector.

Regulations applying to IFSC companies have been designed to facilitate their activities within European Union and OECD jurisdictions, while maintaining appropriate supervision.

Successive Dublin governments have recognised the importance to the Irish economy of fostering the finance industry and providing the infrastructures it needs.

Companies operating in the centre benefit from a low corporate tax rate which is supported by a network of favourable double tax treaties.

There are no restrictions on currency movements or repatriation of profits, and no withholding taxes on interest and dividends paid by IFSC companies.

Income normally treated as trading income is not liable to capital gains tax. There are also generous rate remissions and rent allowances.

The funds management sector within the IFSC has developed successfully, with more than 1,000 people directly employed in funds-related activities.

A strong trend has been for institutions which may have existing facilities in other countries where labour shortages or high costs pose operating problems, to now establish complementary operations to take advantage of Dublin's large labour pool and lower costs.

To date, groups such as Barings, LGT and Deutsche Morgan Grenfell have taken this step.

The primary regulator of IFSC activities is the Central Bank of Ireland. The bank has an international reputation as a fair and efficient regulator which is willing to consider promptly new measures proposed for the IFSC. Overall policy for the IFSC is a priority of the Irish government. Policy and legislative issues are controlled from the office of the Prime Minister.

Daniel P Tully, CEO of Merrill Lynch, said recently "We are reinforcing our long standing relationship with Ireland with plans to establish a new capital markets operation. The availability of a skilled labour force and the favourable business environment created by the Government are major incentives."

In the demanding global financial services industry, Ireland has earned the status of one of the most efficient and profitable locations. Almost 600 foreign companies trade from Dublin in banking, mutual funds, corporate treasury services, and insurance.

They use Ireland as a base because of its competitive advantages of low tax, low cost, ample skills, and good support and communications facilities.

IFSC companies have available in Dublin an extensive support network of banks, brokerages and professional, legal and accounting advisers. Also, Ireland has an abundance of well-educated young people with business, accounting and legal qualifications, many of them multilingual.

Ireland has invested US$5 billion in recent years to give it one of the world's most advanced telecom networks. Thus, the IFSC is linked to the full range of international telephony, telex, digital data and packet switched data services.

The Industrial Development Agency (IDA), acting for Ireland's Department of Finance, is the agency responsible for processing applications of certification at the IFSC.

In Australia the Ida office is directed by Teresa Keating. Recently she assisted FAI Finance Corp of Australia to obtain an IFSC operating licence. Since 1990 when the IFSC first opened to the mutual funds industry, Dublin has become one of Europe's leading offshore locations for the sector. The Centre gives funds managers many incentives and services. They include a range of tax structures, availability of qualified people, a low corporate tax, and a purpose-built location.

New fund structures are devised by IFSC policy makers in consultation with the industry. Among those available are variable capital companies, unit trusts, closed ended companies, fixed capital companies, investment limited partnerships, and pension fund structures.

Insurance is one of the busiest sectors at the IFSC. The range of insurance activities there includes direct writing, reinsurance, life assurance, captive insurance management, international broking, and back-office operations.

The banking sector has been central to IFSC's rapid development. Most major international banks have offices in Dublin from which they conduct global activities. Centre operations include assets financing, loan syndications, bank treasury operations, and bond and commercial paper issues.

Management of corporate treasuries is a growing sector at the Centre. Over 200 major international companies use the IFSC for global treasury activities.

The range includes inter-group lending/leasing, exchange and interest rate risk management, management of group liquidity, and sales aid financing. The IFSC now has more than US$30 billion in offshore funds managed through it.

Aircraft manufacturer Airbus has centralised all its aircraft leasing and sales financing in Ireland and ING Aviation Lease uses Dublin to co-ordinate all its North American business.

Merrill Lynch Capital Markets Bank, with most of Merrill Lynch's non-dollar capital market activities, is in Dublin as are IBM's core treasury activities, cash management, funding and risk management for all of IBM Europe.

The Economist Intelligence Unit predicts that Ireland will have the fastest growing European economy in 1999, showing 6 percent at the end of the year.

The European Commission put Ireland's growth at even higher, forecasting 9.3 percent in GDP growth for 1999.