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“It’s an exciting time for Cork,” says Barrie O’Connell, partner in charge, KPMG Cork. While the cranes on the skyline ably demonstrate the explosion of commercial activity, the Financial Times’ FDI Magazine also named Cork as 2018’s most business friendly small city in Europe in addition to including it as one of the top 20 European Cities and Regions of the Future.
Cork is a stand out location for both indigenous and international FDI businesses operating globally with a proven track record in the Pharma/Life sciences and Agri sectors, more recently for Technology companies and with newer segments such as Cyber, International Financial services among emerging clusters.
“There’s a new focus on operating in the core of Cork. The tech, cyber-security and financial services clusters are creating a very positive dynamic in the city, as it continues to reshape itself for the generation keen to live, work and connect there.”
Over recent years, the South Mall and Grand Parade has witnessed a transformation with several technology companies such as Facebook and Forcepoint setting up shop, in tandem with the emerging developments in the Docklands on both sides of the Quays and it is very exciting to see Clearstream take up residence as the first tenants in Navigation Square.
“We have just moved across the road to 85 South Mall, having outgrown our old building” O’Connell adds. Designed by award winning architects Henry J Lyons, the state-of-the-art building has been thoughtfully designed to fit into the existing South Mall streetscape.
In relocating its 170-strong team to this highly flexible 30,000sq ft next generation office space, KPMG Cork is perfectly placed to capitalise on the strong growth in the region, and provide capacity for the team to grow to 300. The move continues the firm’s long history on ‘The Mall’ having resided at the nearby number 90 for 47 years.
"This will allow us to continue to access the exceptional talent emerging from UCC and CIT, across all disciplines, as well as people relocating nationally and internationally to Cork. Business across Munster and Cork is performing really strongly.
"We are seeing increased demand for our services across all sectors. We expect this demand to increase and are investing in our people to ensure our teams can meet the needs of our clients in Cork and Munster.”
Our ambition is to continue delivering for our clients in our traditional areas of Audit, Tax and Advisory across our FDI, IFS and Private Enterprise segments while expanding our service lines in eForensics and analytics, Cyber, Risk consulting, Corporate Finance and Management Consulting ensuring we are ready to support the future of Cork.
Cork has a long history as a Trading area with its Maritime heritage and has demonstrated time and time again down the generations an ability to adapt and adjust to change and macro global economic conditions. We have great confidence in Cork and look forward to playing our part in our City on the Rise.
No other location in Ireland outside of Dublin has the breadth and depth of Financial Services activities as Cork, according to Karen Conboy, KPMG Partner in Cork. Recent Cork Chamber estimates put the number of Financial Services related companies covering asset management, administration, middle, back office and IFA activities at 25, and growing.
“Long before the concept of Brexit existed, major IFS companies such as BNY Mellon and Citco has set up operations in Cork. In recent years others such as HedgServ and Clearstream have followed and new entrants like Beechbrook Capital are expanding the type of Financial Services activities in the area beyond middle and back office processing into high end portfolio management,” she points out.
The government’s IFS 2025 Finance for Ireland strategy includes regionalisation as a priority, aligned to the Ireland 2040 National Planning Framework. Cork already holds the position as the state’s second Financial Services hub.
“KPMG’s commitment to the local market has included our involvement in Cork Chamber’s Connecting Cork IFS Forum, the group highlighting Cork’s ability to meet the needs of potential new IFS entrants looking to set up or expand in the Irish marketplace,” Karen explains.
Last month Irish Funds published an Indecon report, ‘Economic Impact of the Funds Industry on the Irish Economy,’ that identified 1,346 direct funds related jobs in Cork. With Limerick contributing 936 further positions, the two Munster locations represented just over 50% of all funds related employment outside of Dublin as indicated in the report.
With IFS being one of the few industry sectors set to gain from Brexit, Ms Conboy stated that “Cork has a track record in IFS nowhere else outside of Dublin can match, making it the most credible location for IFS growth outside of the capital”.
She cites the outstanding talent pool provided by the local third level institutions, combined with Tier 1 data connectivity, office capacity with competitive rents and strong transport links to major business destinations as key factors supporting continued growth of this sector. KPMG Cork is positioned to support this next generation of Financial Services activity in the city and across the Munster region.
The KPMG Cork Financial Services group has grown and developed in parallel with the local Financial Services market over the past ten years. The local team of 30 professionals engage with new and existing companies across audit, tax and advisory with a particular focus on investment management and aviation leasing.
“Our team has evolved and grown to meet the changing needs of the market place and clients get the benefit of local support and experience along with access to a strong global network. IFS is a complex, highly regulated sector and we are seeing more demand for regulatory and advisory support from clients.
"In addition, IFS companies operating in an ever-changing technological world are natural customers for the fintech and cybersecurity companies that have emerged as an IT cluster in the region.
“Cork must remain a dynamic, innovative location for Financial Services companies so that it can copper-fasten its position as the second city in Ireland for IFS. The opportunity is there and we should grasp it with both hands”.
Cork is thriving on a unique mix of dynamic, innovative and enterprising start-ups combined with established Foreign Direct Investment global giants and local Private Enterprise.
“The Cork region is synonymous with FDI, recently we saw medical device giant Stryker invest a further 200 million in Cork,” says Celine Fox, Resident Partner with KPMG’s Cork audit practice. Celine has over 20 years’ experience providing advisory services to a wide range of Irish and multinational clients.
She highlights that Cork has been attracting FDI investment for 50 years, with Pfizer the first multinational to pave a way that many others would follow. In 2019, Cork is home to 7 of the top 10 pharma companies in the world.
“Cork punches well above its weight and not just in biopharma, over 150 FDI companies have chosen Cork for their operations, complementing our strong indigenous base.”
Cork has all the ingredients to attract and retain FDI – a talented young workforce with a “can do” attitude, a business friendly eco-system, and a quality of life many other cities could only dream of. Cork was voted the third friendliest city in the world by Conde Nast Traveller in their 2018 survey.
Celine points out the increasing trend for FDI to seek city centre locations, a trend where Cork offers affordable urban living with easy access to a region steeped in natural beauty, culture and tradition – the best of both worlds.
Celine strikes a cautiously optimistic tone, outing elements of global economic uncertainty currently at play “there are a number of challenges to be faced in the short to medium term, Brexit remains, US 10 Year Treasury notes have slumped, there’s a decrease in global manufacturing output and the threat of trade tariffs from the US are all potential FDI inhibiters.”
However, Celine identifies the strategic investment and infrastructural projects of Project Ireland 2040 as transformative, which will dramatically enhance the city and towns on the Western Corridor attractiveness. All of which can contribute to Cork to become the fastest growing Irish city over the next 20 years with a three-fold increase in population.
“Cork has significant potential with the docklands area providing space for the city to grow and develop, and already a number of major development projects are underway and in the pipeline. Cork is alive right now, and on the cusp of a major transformation which will attract further FDI. The future of Cork is exciting and positive - and we must act now to seize the opportunity.”
“As we move to our new premises at 85 South Mall, I am extremely excited about Cork’s future and the role that KPMG can play in supporting Cork, a City on the Rise,” says Michael Lynch, Tax Partner with KPMG. “Internationally, there has probably been more change in the tax world over the past 5 years than in the previous 30 years. The changes we have seen include a fundamental reform of the US corporation tax system, various changes introduced at EU level and measures taken on foot the OECD’s BEPS project.”
Over recent years Ireland has adopted a number of international tax measures into its corporation tax regime, he explains.
“This has been done under the framework of Ireland’s Roadmap for Corporation Tax, and further measures will be adopted later in 2019 and in coming years.”
“In addition to the pace of tax reform, we are also seeing and will continue to see rapid changes and indeed disruption changes to the traditional forms of tax reporting,” Michael elaborates. "Tax authorities, tax advisors and taxpayers are seeing fundamental changes in the capabilities of tax technology.
"These have evolved from initial solutions to prepare tax computations using a bespoke tax software package rather than on Excel, to on-line filing of tax returns, to real time PAYE reporting, and increasingly solutions which help to manage or identify tax risks by taxpayers and tax authorities.”
Michael points out that many larger organisations have looked at and implemented outsource solutions to manage tax compliance: “In the future we will see much more automation and standardisation of tax compliance functions, not just in very large organisations but also, I believe, in SME’s.”
He adds that Artificial Intelligence is also commencing to play a significant role in the management of tax risk.
“We work with our clients every day to help them navigate what at times is a challenging, but from my perspective at least, always an interesting environment,” Michael says. “Given the rapid change in tax and in tax based technology solutions it is a super time to lead our tax team in Cork.”
In addition to supporting the tax needs of FDI clients, a large part of KPMG’s local tax department supports the needs of indigenous Irish owned and often family owned businesses - private enterprises critical to Ireland’s current and future success.
"However, in more recent times these businesses have a stronger appetite to invest, are more willing to leverage the strength of their balance sheet, engage with new lenders to refinance existing debt arrangements and are now looking at passing ownership from one generation to the next, or, where deemed appropriate, selling all or part their business."
He underlines the importance, when making commercial decisions, that the tax implications thereof are clearly understood and there are no big surprises.
“I am very proud to lead a dynamic and innovative team of tax professionals here in Cork. Through them and our national and global reach, I am confident that we can deliver in Cork the appropriate solutions for our existing and future clients.”
Michael who leads the KPMG Private Enterprise offering in the region adds that when working through transactions with Irish owned businesses they now expect not just tax or assurance supports but increasingly want and expect KPMG to provide a holistic, “One Stop Shop” solution.
We have invested significantly in our advisory services locally with Ruairi Kenneally, Director Restructuring, Paul Hough, Director E-Discovery and forensics, recently joining our team alongside Fintan Walshe who supports our private enterprise advisory function at both local and national level.
Additional senior appointments will be announced over the Summer and in coming year and years as we continue to invest in Cork, a City on the Rise.