Stamp duty axed on transfer of shares on ESM

The Government has scrapped stamp duty on the transfer of shares on the Enterprise Shares Market (ESM) in an effort to boost investment in Irish companies.

As it stands all transactions on the ESM are subject to a 1% stamp duty. The Irish Stock Exchange (ISE) welcomed the move.

“The ISE has long campaigned for the removal of stamp duty on investing in Irish companies — this initiative enables ESM companies to operate on a level playing field with their international peers when competing for international investment. It matches similar proposals made in the UK earlier this year and moves the Irish market more in line with European norms.”

The ESM is a market for Irish small-to-medium enterprises. The Government announced this year that it would look at measures to boost non-banking funding for Irish companies. A recent study by the Central Bank found that Irish firms are the second most reliant in the EU on bank funding.

However, bank lending has been constrained over the past few years as the sector struggles to return to profitability.

ISE chief executive Deirdre Somers said the proposal is an essential step in creating the next generation of leading Irish publicly-quoted companies and meets some of the Government’s stated objectives in the Action Plan for Jobs — to incentivise dynamic companies to choose growth and scale using the IPO route as an alternative to trade sale.

“Ireland needs to ensure that Irish companies are as attractive as their international peers when it comes to investment,” said Ms Somers. “We welcome that ESM companies will now be exempt from stamp duty as this tax acted as a barrier to international investment.

“This initiative is an important step in the creation of the next generation of leading companies in Ireland which choose the IPO route to grow — like Ryanair, Kerry, Group and Paddy Power. High-quality, scalable businesses can create jobs and deliver much needed growth in the Irish economy.”