Private businesses find Ireland increasingly attractive to operate in, report finds

However, more investment is needed for the sector, according to professional services firm PwC.

Ireland’s jump up the rankings was driven mainly by the increases in public health metrics, said PwC.

Ireland moved up the rankings as an attractive country for private businesses to operate in, but more investment is needed in the sector, according to professional services firm PwC.

Ireland climbed to seventh position out of 33 EMEA countries for private businesses to "thrive" in, up from 14th position last year, according to PwC’s 2022 EMEA Private Business Attractiveness Index.

Ireland needs to “strike a balance across all the key attributes that private businesses are seeking, ranging from education, skills, funding and support, technology, and to infrastructure and beyond”, said Claire Shanahan, PwC Ireland director with the firm's entrepreneurial and private business practice division.

Ireland’s jump up the rankings was driven mainly by the increases in public health metrics, said PwC. However, it added that there are “underlying worrying trends” for private businesses in Ireland.

These trends include the impact inflationary pressures are having on the Irish economy, poor cybersecurity, lack of investment in education, and the country's tax and indirect tax metrics.

"Both income and indirect tax rates have a significant macroeconomic impact on the performance of private businesses, more so than a headline rate of corporate tax,” said the report.

Ranking in relative terms behind other territories in these key tax and regulatory metrics is having a negative impact on the Irish landscape for private businesses and entrepreneurs.”

The index ranks the relative attractiveness of private business environments based on categories including macroeconomics; the private business landscape; tax and regulatory environment; environmental, social, and governance (ESG) metrics; public health; education; skills and talent; technology infrastructure; and the newly introduced start-up ecosystem category.

“With a specific focus on private businesses, Ireland scores only 22nd out of 33 EMEA countries for income tax rate, while ranking 24th when it comes to our Vat system — both key taxation metrics for private businesses,” said Colm O’Callaghan, partner at PwC Ireland's entrepreneurial and private business practice division.