Need to Capitalise on Increased Interest from US Investors
Business headlines over the past 9-12 months have heralded an “invasion” of US investors into Northern Ireland. At Tughans, in the first quarter of 2014/2015 we have acted on two major corporate transactions involving US takeovers of Northern Irish companies (one being the acquisition of Whale Pumps in Bangor by Brunswick Corporation and the other being the acquisition of Telestack in Omagh by Astec). Other high profile transactions in the press include the recent takeover of Hughes Insurance in Newtownards by Boston-based Liberty Insurance.
Our experience is backed by the statistics with a recent report by Ulster Bank showing that US investors by far represented the largest proportion of foreign direct investment in Northern Ireland and figures announced by Enterprise, Trade and Investment Minister, Arlene Foster, reveal that last year Northern Ireland secured almost 40% more of new inward investment jobs than the next best region in the UK (on a per capita basis).
The benefits of increased US investment to our local economy are already well documented with the Department for Finance and Personnel reporting that there are almost 23,000 people in Northern Ireland whose livelihoods rely on 185 US owned firms. However, the less documented knock-on effects are equally important. Benefits such as the creation of non-public sector jobs, badly needed youth job creation, enhanced employee skillsets and the potential for business spin-outs cannot be overlooked. Moreover, most of the US companies that have invested Northern Ireland have specifically chosen Northern Ireland as their entry point for the European market. These companies are in growth mode so there are definite opportunities for reinvestment coming down the track.
Although most commentators expect the trend in US investment to continue, Northern Ireland cannot afford to take this for granted and our politicians and major stakeholders need to continue to be proactive in encouraging inward investment. We must build on progress to date and continue to promote Northern Ireland as being a better and more competitive location for investment than our neighbours in the Republic of Ireland, the UK and elsewhere in Europe. The ongoing corporation tax debate has a role to play in this and on a practical level, direct business-to-business advocacy from our existing US investors is hugely important and this needs to be harnessed and properly utilised. Likewise, with the speed and coverage of 24 hour news and social media we need to ensure that the headlines coming from Northern Ireland remain positive and that bad news stories which put off foreign investment for most of the 80s and 90s are not allowed to detract from this.
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.