Nestled in the western corner of the UK, Ireland stands as a bastion of individuality, rich history, and a blooming economic infrastructure. The country hasn’t had the smoothest political history, but there are numerous benefactors to Ireland’s current prestigious investment landscape. Currently, Ireland holds a proud economic freedom score of 82.0, meaning its economy is the 3rd freest in the 2022 index. Geographically, Ireland is well-intertwined in global commerce thanks to direct links to the UK, Europe, and the hottest international markets. The country’s GDP is expected to increase by 4.8% in 2022 and a further 2.7% in 2023 - it’s unsurprising that investors are looking twice at Ireland for a possible home for future investments.
The Irish economy is undeniably resilient, quickly becoming a hotspot for foreign direct investment due to its stability and multinational composition, bolstered by the country’s supportive regulatory and tax regime, favouring the growth of foreign investments. Overseas companies contribute to the majority of Irish exports, contributing to global markets in technology, medical devices, food and beverages, and pharmaceuticals.
Curious about investing in Ireland? Learn about Ireland ETFs, real estate crowdfunding, and P2P lending - three popular ways to invest in Ireland.
Why Invest In Ireland
Ireland’s economic framework is tailored toward the international investor. A legal regime that supports business growth, favourable tax bands for individuals and companies, a treasure trove of natural resources, and a renowned export market are a few of the reasons Ireland has seen such formidable growth in recent years.
Even more valuable to the international investor; in 2017 Ireland has been rated the best country for high-value FDI for the 6th time in a row. Leading multinational conglomerates are amping up investment efforts across Irish industries including transport, tourism, pharmaceuticals, and business services. Global powerhouses including the US, Germany, and China are all feeling the pull of the attractive economic infrastructure.
Inwards investment has been massively aided by the existence and involvement of IDA Ireland - the Industrial Development Agency. Responsible for the marketing of the Irish economy for foreign investment, the IDA consults with new organisations and enterprises wishing to set up or expand.
Investors need to look forward, and the future appears bright for Ireland. Investment will continue to gain momentum with funded shifts toward sustainability projects and major infrastructure, the latest National Development Plan includes a budget of €165 billion for future plans as well as developing a longer-term overseas strategy.
Investing In Ireland With ETFs
Investors well-versed in market movements and know their way around a quarterly report tend to diversify spare capital over specific shares or bonds. Whilst this can foster strong returns, diversification is becoming a lot more common as economies battle through periods of volatility. The best way to invest in a fusion of large-cap Irish companies would be through Exchange Traded Funds (ETFs) that track certain indexes - a collection of publicly tradable large Irish companies. The core of the Irish stock market is the Euronext Dublin.
For investors looking at ETFs, Ireland is a prime contender, with over 100 ETF listings for investors to choose from. The stock market is an abundant source of domestic and foreign revenue, contributing over €200 million to the Irish economy on an annual basis. Since Ireland’s first ETF launched in 2000, Ireland has been the number one domicile for European ETFs.
Investors looking at ETFs will likely be drawn towards the ISEQ 20, the benchmark index for listed top-performing Irish companies, consisting of the 20 largest companies on the broader ISEQ All-Share Index. The ISEQ 20 features world-leading names such as Ryanair, AIB Group, and Bank of Ireland. If it’s a wider exposure you’re after, the MSCI Ireland Index tracks approximately 85% of the free float-adjusted market capitalisation in Ireland, providing access to large and mid-cap companies.
iShares offer an MSCI Ireland Index ETF, and Wisdomtree offers an ISEQ 20 UCITS ETF for the highest-performing companies. However, as a global hub for ETFs, here are some leading ETFs domiciled in Ireland:
- Vanguard FTSE All-World UCITS ETF (VWRA)
- iShares Core MSCI World UCITS ETF (IWDA)
- SPDR MSCI World UCITS ETF (SWRD)
Home to more than 50% of all European ETF issuers, the small but mighty country has a reputable grip on the global ETF market. Research is key when picking the right ETF due to variations in fees, management, and overall long-term performance.
Can You Invest In Irish Property?
Business-friendly policies, favourable tax regimes, and the work of the IDA have been key catalysts in opening the gates to foreign investment. However, for foreigners looking to snap up property in Ireland, buyers need access to a lot of spare cash. Residency can only be obtained through a €1 million investment in an Irish enterprise or a €500,000 donation to a philanthropic organisation. Another option is investing in a REIT (Real Estate Investment Trust), but again doesn’t provide residency without an investment of €2 million.
Investors shouldn’t be warded off by wealth-exclusive regulations. Even small amounts of capital can provide exposure to the Irish property market through the modern trend of real estate crowdfunding. Property crowdfunding allows networks of individual investors to fund a diverse of real estate projects without the need for a banking intermediary, amplifying small investments to meet the needs of developers, connected through easy-to-use online platforms.
Currently, there’s limited data surrounding the real estate crowdfunding market in Europe, due to its slight backfoot in comparison to longer-standing European platforms. There are currently only a few real estate crowdfunding platforms in Ireland. Property Bridges, aimed at tackling the housing crisis in Ireland, stands as the longest-running; showing €25 million funded since 2018. The company also secured a further €100 million line of funding in 2018 to support its ambitious endeavours. Both Property Bridges and Initiative Ireland offer investment options from as little as €500.
Peer-to-Peer Lending In Ireland
The peer-to-peer lending market is also starting to gain traction within the Irish business landscape. Demand for credit from Irish SMEs remains high, and investors are looking for other avenues to invest capital. Out of necessity, P2P Lending is gaining more attention, where individuals can purchase debt notes and provide loans for businesses requiring funding.
There are 5 P2P lending sites in Ireland, ranging from real estate to venture capital and business loans. Lendermarket, while domiciled in Ireland, operates as a loan originator with hubs based in Spain, Finland, the Czech Republic, Poland, and Estonia. Sites like Linked Finance are amongst the most popular, offering business loans from as little as EUR50 and returns between 6-10%.
The Bottom Line
Ireland’s repertoire of domiciled ETFs speaks volumes for its resilient economy. Investors solely focusing on top-performing Irish stocks will want an ETF that tracks the ISEQ 20, but broader indexes are widely available. Both the property crowdfunding and P2P lending markets are still in their early stages, but a handful of successful platforms are underway, with investors receiving returns upwards of 10% annually.
- The Heritage Foundation: “2022 Index of Economic Freedom”
- OECD iLibrary: “OECD Economic Outlook, Volume 2022 Issue 1”
- OECD: “Ireland Trade and Investment Statistical Note”
- IMB Institute for Business Value: “Global Location Trends”
- Irish Funds: “Why Ireland for ETFs”
- Irish Funds: “Why Ireland for ETFs”
- Schengen Visa Info: “Irish Citizenship by Investment: Ireland Investor Visa”