Ireland, the perfect place for any business.

Q2 2013 Key Marketplace Messages

Why Ireland: Companies are attracted to Ireland for a variety of reasons:

TalentOur predominantly young work force is capable, adaptable, mobile and committed to achievement.

The median population age is 35, the lowest in the EU.

Track RecordOver 1000 multinational companies have already chosen Ireland as their strategic European base.

TaxationIreland’s Corporation Tax Rate is 12.5%.

TechnologySignificant State Investment in R&D helps ensure Ireland stays at the forefront of technological innovation.

EducationEducation – Ireland leads in the skills race with a higher percentage of 3rd Level Graduates than UK, US and OECD

averages. An EIU Benchmarking Competitiveness Report ranks Dublin as the best city in the world for human capital.

European MarketCompanies located in Ireland benefit from barrier-free access to over 500 million consumers in Europe.

Europe is still one of the largest markets in the world c 22% of global GDP.

English SpeakingEnglish is the universal spoken language. The country is a highly developed multi-cultural community

and a leading member of the Eurozone.

Foreign Direct Investors experience and enjoy a distinctly pro-business environment. Positive attitudes

prevail - all the way from the general public, through the media, right up to the most senior levels of Government.

Ireland one of the best places in the world to do business;

- The Irish economy grew for the second consecutive year in 2012, with GDP increasing by 0.9%.

- A significant improvement in Ireland’s cost environment is underpinning the return to growth.

Costs have come down across the economy, including: property, business services and labour costs.

- Companies continue to choose Ireland as one of the best countries in the world to do business.

- IDA Ireland client companies recorded their third year of employment growth in 2012 with total

employment rising to 152,785.

- Trade is the key to our growing economy. The strong export performance over the last two years

has led to a current account surplus re-emerging following 10 years of a current account deficit.

- The PMI’s (Purchasing Managers Index) signalled growth in both manufacturing and services in 2012.

- Ireland is in strong recovery mode and expects to exit its IMF/ EU lending programme this year.

- Ireland has a business & government culture receptive to companies looking to internationalise

or expand their existing geographical footprint.

- Key strengths remain - corporate tax rate 12.5%, young educated workforce, best productivity

performance in the EU, strong export performance, critical mass of companies.

Irish competitiveness has improved significantly from the peak in 2007/2008. Business costs including energy, private rents, office rents,

services, construction and labour have all become more competitive. Prime office rents down 52%, Unit labour costs down 12%.

Competitiveness - Significant Improvement in Ireland’s Cost Environment

Prime headline office rents Dublin (€/m2)

Internal devaluation has occurred - real HCI’s signalling costs back to 2002/2003 levels

116.00115.00114.00113.00112.00111.00110.00109.00108.00107.00106.00105.00104.00103.00102.00101.00100.00

Jan ’02 Jan ’03 Jan ’04 Jan ’05 Jan ’06 Jan ’07 Jan ’08 Jan ’09

HCIs

Source: Eurostat 2013

Jan ’10 Jan ’11 Jan ’12 Jan ’13

Prime office rents are back to €307 per m2 in Q1 2013, from €673 per m2 in Q1 2008 (CBRE). Construction tender prices are stabilising and are now about 30% below peak levels, on a par with prices in 1998.

Prime office rents down

700

600

500

400

300

200

2008 2009 2010 2011 2012 2013

Source: CBRE 2013

Labour Costs FallingIrish hourly labour costs fell below the Euro area in 2011

Change in Labour Costs 2009-2011 (%)

Greece

Ireland

Lithuania

Latvia

Estonia

Portugal

Spain

Netherlands

Cyprus

Germany

EA 17

Italy

Malta

EU 27

Luxembourg

Austria

Slovenia

UK

Denmark

Belgium

France

Hungary

Slovakia

Romania

Poland

Czech Rep

Norway

Bulgaria

Sweden

Country

-10% -5% 0% 5% 10% 15% 20% 25% Source: Eurostat 2013

One of the Most Productive Economies in the WorldLabour productivity per person employed (compared to EU 27)

Irish productivity is almost c40 points above the EU27 baseline.

Source: Eurostat 2013

Ireland is one of only three countries in the EU where nominal labour costs have fallen.Competitiveness increase driven by strong productivity growth and weak prices.

Luxembourg

Norway

United States

Ireland

Belgium

Austria

Switzerland

France

Sweden

Netherlands

Denmark

Italy

Finland

Euro Area

Spain

Germany

UK

EU 27

Japan

Iceland

Malta

Cyprus

Greece

Slovenia

Slovakia

Portugal

Croatia

Czech Republic

Turkey

Hungary

Poland

Estonia

Lithuania

Latvia

Romania

Bulgaria

69.7

60.1

43.5

42

27.4

16.3

16

15.5

15.1

11.5

10.7

9.7

9.6

8.5

8.5

6.5

4.2

0

-5

-7.1

-7.2

-9.8

-9.9

-18.2

-19.7

-24.7

-24.7

-25.9

-27.5

-29.2

-31.2

-32.4

-35.2

-37.3

-48.9

-56.5

CountryIndex EU 27 = 0

Trade is key to our growing economy. Exports are at a higher level than before the crisis.

Exporting Sector Key to RecoveryCurrent Account Balance % GDP

6

4

2

0

-2

-4

-6

-8

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Economy expanded 0.9% in real terms in 2012, the second year of growth.We expect to see our third straight year of GDP growth in 2013.

6%

4%

2%

0%

-2%

-4%

-6%

-8%

2007 2008 2009 2010 2011 2012 2013 (f)

GDP Returned to Growth in 2011Real GDP Annual % change

Source: CSO/ Central Bank 2013

Source: CSO/IMF 2013

Economy

Ireland’s cost of living continues to improve compared to Euro Area, prices in 2011 & 2012 increasing at a lower rate than the EU.

Irish and EU 27 inflation (annual rate of change %).

Cost of Living Improving Versus the Euroarea

6.0

4.0

2.0

0.0

-2.0

-4.0

2007 2008 2009 2010 2011 2012 2013

Annual rate of change %

Ireland Eurozone

Source: Eurostat 2013

Corporate tax rates have been one of the principal elements of the favourable enterprise environment in Ireland for more than three decades. The Irish tax regime is open and transparent and complies fully with OECD guidelines and EU competition law.

Ireland’s Corporate Tax Rate

- Rate - The Government policy in relation to the 12.5% rate

of corporation tax is clear.

- Regime - This refers to the additional elements of Ireland’s

broader Corporation Tax Strategy e.g. 25% R&D tax credit,

an intellectual property (IP) and attractive holding

company regime.

- Reputation - Ireland offers a transparent corporation tax

regime accompanied by a rapidly growing network of

international tax treaties with full exchange of

tax information.

Ireland

Hungary

Czech Republic

Netherlands

Denmark

Sweden

Germany

UK

China

Spain

France

India

Japan

US

Brazil

Luxembourg

Switzerland

12.5%

19%

19%

25%

25%

22%

30%

23%

25%

30%

36.10%

32.445%

38%

39.5%

34%

28.8%

21%

CountryHeadline Corporation Tax Rates %

Source: Deloitte 2013

World leaders choose Ireland:

Competition for inward investment has never been stronger, but Ireland’s national determination to make the country one

of the best places in the world to do business is undiminished. On a global scale, Ireland scores extremely well in many of

the key areas of importance to investors, helping drive FDI:

- The IMD World Competitiveness Yearbook 2012 ranks Ireland 1st in the

world for availability of skilled labour, flexibility and adaptability of

workforce and attitudes towards globalisation. The same report also

ranks Ireland 2nd in the world for adaptability and efficiency of

companies and large corporations.

- A study carried out by the Heritage Foundation has found that Ireland

has currently the freest economy in the euro-zone.

- The 2012 IBM Global Location Trends Report highlights that Ireland is

ranked 1st in the world for inward investment by quality and value and

2nd in Europe for the number of inward investment jobs per capita.

Ireland is also top for R&D activities in the same report.

- Irish businesses are feeling more optimistic about the economic outlook

than they were 12 months ago and have increased expectations of investing

more in their businesses and hiring new staff this year, according to the

Grant Thornton International Business Report 2013.

- In 2012 a Foreign Direct Investment Report from Foreign Direct

Intelligence stated that Irish performance far outweighed the

average for Europe in 2011.

- Ireland ranks in the top 10 of easiest places in world to do business -

Ireland ranked particularly well in regards starting a new business,

ease of getting credit, and protecting investors according to the

World Bank Doing Business 2012 report.

- Out of 141 economies, Ireland ranks in the top 10 in the global

innovation index 2012, scoring well for it’s business environment,

human capital, FDI inflows and market sophistication.

- Ireland leads the skills race - in 2012, the highest proportions of

those aged 30 to 34 having completed tertiary education according

to Eurostat 2013.

- Ireland is ranked in the 10 best educated countries in the world -

24/7 Wall St/ OECD Education at a Glance report.

- Ireland comes in at 12th place in Bloomberg's 50 most innovative

countries, February 2013.

- Ireland forecast to be third most ‘digitally engaged’ country by 2015.

Ireland is anticipated “to climb the fastest up the rankings, from

11th place in 2012 to third [in the world] in 2015”.

‘Investors see Ireland’s unique selling proposition as not a single

factor, but the powerful combination of benefits that Ireland offers’.

Economist Intelligence Unit 2012

‘Ireland has been the greatest and most consistent

source of good news over the past year’.

Lorenzo Bin Smaghi former ECB Executive Board member 2013

Impact of FDI

FDI into Ireland is not just stable it is vigorous. Last year was the best in a decade for net

job creation from inward investment. Yahoo!, eBay, Facebook, FireEye, Huawei, Vistakon

and Sanofi are just some of the household names that were among the biggest inward

investments so far in 2013. The importance of FDI to the Irish economy remains highly

significant. FDI accounts for;

- €2.7 billion paid in corporation tax1

- 152,785 direct employment2

- IDA client companies exported €122.4 billion3

- €7.3 billion in payroll4

1 Source: Forfás 2011 Annual Business Survey of Economic Impact

and Revenue Commissioners 2 Source: 2012 Forfás Annual Employment Survey 3 Source: 2011 Forfás Annual Business Survey of Economic Impact 4 2011 Forfás Annual Business Survey of Economic Impact

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