Ireland was ranked 14th out of 34 European countries in terms of best locations to run a business, according to the PwC’s new “private business heatmap”.
The consultancy's new gauge attempts to highlight the most pro-business jurisdictions in Europe by ranking countries on the basis of various metrics, including macroeconomics, tax, regulation, workforce, technology and infrastructure.
The five leading jurisdictions were Switzerland, Norway, UK, Germany and Sweden. A further 12 jurisdictions, including Ireland, which scored at least 50 out of 100, were given an "advancing" ranking.
Ireland came first in terms of its macroeconomic health but ranked only moderately in terms of environmental, social and governance (15th) and in terms of its private business landscape (17th).
It ranked in the bottom half of European countries when it came to the tax and regulatory environment (20th) and for technology and infrastructure (20th).
"From a macroeconomic and private business landscape standpoint, Ireland is a pro-business, politically stable economy which are key ingredients for private businesses to prosper," PwC noted.
It also highlighted that Ireland’s business sector benefits from the large number of global multinational companies registered here.
“For example, almost 900 US companies are located in Ireland employing over 190,000 people and supporting a further 152,000 jobs, spending €21.2 billion in our economy each year on wages and goods and services,” it said.
Within the tax and regulatory category, Ireland scored highly in terms of corporate tax (4th place), reflecting Ireland’s status as a hub for corporations to establish their headquarters here. However, the State was ranked just 19th for its income tax rate, reflecting the high marginal rates for workers on middle incomes.
Gender pay gap
“Given an entrepreneur’s or business owner’s income is so intertwined with that of their businesses, Ireland’s tax regime needs to support to the maximum extent possible the establishment and growth of indigenous businesses, not to mention their entrepreneurial founders,” PwC said.
Within ESG, Ireland was ranked fifth in terms of the gender pay gap and ninth on global corruption but 21st place for carbon emissions.
Colm O’Callaghan, PwC Ireland’s private business tax partner, said: “PwC’s private business heatmap suggests that, based on Ireland’s overall ranking, there is scope for improvement in Ireland’s strategy to help support growing businesses.
“In particular, Ireland’s tax system needs to be more attractive for entrepreneurs to start and grow a business. For example, there is a need for more meaningful measures to incentivise investment and to support entrepreneurs,” he said.
“We want a regime that results in Ireland being an entrepreneur’s first and only choice to set up a business, and which should work to ensure that as many businesses as possible start, grow, expand and ultimately stay on these shores,” he added.
