Ireland -Shannon Free Zone

General Description

The Shannon Free Zone (SFZ) is located on 600 acres adjacent to the Shannon International Airport in Shannon on the west coast of Ireland.⁸⁷ Currently, 110 companies operate in the SFZ, with a total employment level of 7,200 and an annual trade volume of €3.3 billion.⁸⁸

The SFZ was established in 1959 and is managed and promoted by Shannon Development, an Irish government corporation, presently mandated to oversee the economic growth and development of the Shannon Region. The Shannon Region covers a 10,000 square kilometer area spanning the counties of Clare, Limerick, North Tipperary, South Offaly and North Kerry. Collectively, these counties have a population of over 450,000 people.⁸⁹

Infrastructure

Energy

The national provider of electricity in Ireland operates 24 power stations nationwide with a total capacity of 4164 Mw. The national grid comprises of high voltage lines, and industrial users are typically supplied at high voltage or, alternatively, at medium voltage. However, low voltage supplies are also available. The average cost per Kw hour for electricity is €0.075.⁹⁰

Telecommunications

The Shannon region has a well developed telecommunications infrastructure, with broadband connectivity to the Irish national backbone.⁹¹ The Irish telecommunications market is deregulated with several market participants, and recent investments by these companies have resulted in advanced fiber-optic networks with national and international connectivity.⁹²

Transportation

Road Transport
The SFZ is located on the N18 main national route, approximately 18 kilometres from Limerick, 129 kilometres from Cork and 222 kilometres from Dublin.⁹³

Sea Transport
The SFZ is not situated directly by, but relatively close to seaport facilities. The nearest roll on/roll off port is in Cork and such services are also available in Dublin. The closest container facility is the Shannon Foynes Port, which is 56 kilometres away from the SFZ.
The ports around the Shannon estuary comprise of four special purpose ports catering to particular industries, as well as two general purpose ports at Foynes and Limerick. These ports serve all modalities including dry and liquid bulks, break-bulks and lift on/lift off containers. There is a liner service operating directly from the port at Foynes to Rotterdam for European or trans-shipment.⁹⁴

Rail Transport
An Inter City Rail Link is located in Limerick. The Inter City Rail Link provides daily connections to Dublin and Cork.⁹⁵

Air Transport
The Shannon International Airport has an annual capacity of 4.5 million passengers.⁹⁶ During 2007, the Shannon International Airport recorded 3.2 million terminal passengers; i.e., passengers who either begin or end their journey at the airport.⁹⁷ Regular scheduled services to destinations in the U.K., U.S. and Europe are provided by multiple airlines.

Financial Sector

SPZ has access to four domestic clearing houses, as well as to international financial institutions.⁹⁸

Business Sectors

Table 4 below shows the key sectors operating at the SFZ and the primary business activities carried out by the companies located within the SFZ.

Incentives

The incentives associated with corporate establishment in the SFZ are noted below.

• Corporate tax rate of 12.5 percent - Effective as of January 1, 2003, Ireland's corporate tax rate is 12.5 percent on all trading profits. In addition, the 10 percent corporate tax rate for eligible "manufacturing" trades is still available until 2010, as long as the trade qualified for such rate before July 30, 1998. A corporate tax rate of 25 percent applies to non-trading income.¹⁰⁰
• Free port benefits - SFZ is a customs free zone with a system that allows deferral of duty payable on imported goods from non-EU countries, until such time the goods leave the SFZ destined for another EU country. Companies may obtain approval to import goods duty-free from outside the EU for processing and re-exportation to non-EU countries. Importation of goods from within the EU is exempt from duties. The SFZ is rated zero for VAT.¹⁰¹
• Grants - Shannon Development offers grants to eligible prospective companies seeking to establish a presence in the SFZ, as well as to certain companies that are already operating within the SFZ. The following types of grants are available:
  • Employment Grants;
  • Research and Development (R&D) Grants;
  • Training Grants; and
  • Capital Grants.¹⁰²
• Other Incentives - Companies established in the SFZ may also be eligible for other incentives. These include, but are not limited to, R&D tax credits and exemption for Capital Gains Tax on share disposals.¹⁰³

Business Inputs

Raw Materials

Please refer to the "Incentives" section above.

Labour

The Irish population is the youngest in Europe. Companies established in the SFZ have access to a well educated workforce with a productivity output of an estimated hourly GDP per capita of U.S. $ 45.33.¹⁰⁴ Ireland has nearly one million people in fulltime education and 60 percent of people that complete high school continue with further education, primarily within business, engineering and computer science. The SFZ is located 25 kilometres from The University of Limerick and The Limerick Institute of Technology. Other secondary education institutions such as the NUI Galway and University College Cork are located 88 kilometres and 128 kilometres away respectively.¹⁰⁵

Investors

Table 5 below shows the geographical origin of foreign investors that have established a presence in the SFZ.