Ireland has a lot going for it as a global fintech hub but needs to do more to get that message out to the world, said John Murphy, tax partner at PwC.
PwC is currently compiling a global fintech survey to assess the global state of the industry, in terms of the various ecosystems and each country’s readiness, attitudes and understanding of fintech.
The level of response to the survey in Ireland will inform the global picture of the country’s preparedness to embrace fintech innovation, and also its support for fintech entrepreneurs.
‘When we look at competing locations, it is actually not only the UK, but Luxembourg and Switzerland too’
– JOHN MURPHY
Ireland’s opportunity to capitalise on the spread of fintech, especially in light of Brexit, is one that the country needs to do more about, Murphy said.
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He said that the momentum initiated two years ago by current Health Minister Simon Harris, TD, with the IFS 2020 strategy is being maintained enthusiastically by Eoghan Murphy, TD, Minister for Financial Services.
But, he warned, Ireland needs to ensure it is a part of the global conversation.
“In the broader fintech space, there is a lot of chat about the attractiveness of London following Brexit.
“But in reality, we are not seeing a massive flight by fintech players from London either.”
Murphy recommends that Ireland needs to step up its game, particularly in terms of attractiveness from the taxation aspect.
He said an opportunity was once again lost to do more with share options and capital gains tax.
“When you look at the EISS regime here, and the more attractive EIS and SEIS in the UK, there’s a bigger pot for angels, and investors are much better.
“You can argue that there is more disposable income in the UK, that it is geographically bigger, but these are precisely the very reasons we need to be ensuring we bring capital gains tax rules up to date.
“In the UK, entrepreneur relief is more attractive on an exit. In Ireland, we are taxing at 10pc for a percentage of the exit, whereas in the UK, it is a flat 10pc rate.
“Entrepreneurs are mobile and if they are young and able to move around, then Dublin currently offers an uneven playing field.”
Despite this, Murphy said that the quality of Dublin fintech start-ups is consistently high, and increased activity by local banks like the Bank of Ireland and AIB in engaging with fintech start-ups is raising boats.
“But in keeping with the spirit of the original IFS 2020 strategy, there is certainly a profile piece we need to retain.”
Murphy said that the survey will play a vital role in informing PwC’s global assessment of Ireland’s fintech readiness.
“When we look at competing locations, it is actually not only the UK, but Luxembourg and Switzerland too. Ireland is important and has plenty of ambition so that’s why we need a decent response to this survey.”