As Irish commercial ties with China go from strength to strength, local accountancy firms are looking to hire more Chinese-speaking staff in response to new investment trends
This article was first published in the May 2017 China edition of Accounting and Business magazine.
Growing business links between China and Ireland are driving demand for accounting specialists with Mandarin skills able to cope with increased investment by Chinese companies and private citizens in Ireland. There is even a Chinese-language newspaper produced in Ireland that carries many adverts touting for work from small and large chartered accountants, all with a Chinese-language native on their staff.
It is a similar story for the Big Four in Dublin. According to Yvonne Thompson, tax partner, China practice, PwC Ireland: ‘Due to the recent increase in business traffic between Ireland and China, we are bringing in more people with the language and knowledge skills of the Far East to meet the demand of our business. In fact, it is very important for us to have people who are not only technical experts, but who also speak the language and understand the culture.’ She says PwC Ireland’s China desk is long-established, offering services to clients through professionally qualified experts ‘across all the disciplines of tax, advisory and assurance who are from mainland China’.
Among those professionals is Eddie Cao, senior manager, China Practice, PwC Ireland. ‘The key driver of PwC’s expansion is the growth in our client base. We are witnessing an increasing inflow of Chinese investments into Ireland in a number of industries, such as financial services, technology, food and agribusiness,’ says Cao. ‘Chinese foreign direct investors into Ireland view Ireland as a great country for their international base and an important gateway to Europe. There is also an increasing interest from Irish indigenous companies who are increasing their business ties with companies in China and also entering the Chinese market. We are working with our offices and professionals in China to advise our Irish clients on set-up and expansion strategies.’
The PwC duo expects its Sino-Irish business to grow, says Thompson: ‘We would like to think that we are on the growth curve of trade and investment volume in the near future, and this is on the back of strong growth in trades and services in recent years.’
China-Ireland bilateral trade in 2016 grew by 13.75% year on year to US$8.1bn. ‘China’s import and export trade with Ireland is growing at a faster pace than that of any other European country,’ said Chinese ambassador to Ireland Dr Yue Xiaoyong at a PwC event. ‘Ireland is one of only three European countries maintaining a trade surplus with China.’ As a developed country and European Union member state, Ireland ‘will continue to be an important partner of China’s ongoing modernisation drive’, he added.
Sino-Irish accounting work is increasing too at KPMG. ‘One reason is the increasing amount of Chinese corporate and private investment in Ireland,’ explains Shan Lu, a senior member of the China desk at KPMG Ireland who has worked on the firm’s China desk in both Dublin and Beijing. Most of these companies would have their accounting work done in Ireland, as their Chinese team may not be able to perform such work in China, lacking Irish tax and international accounting standards experience, she says.
Dublin’s position as a global hub for aircraft leasing has also driven investment from China, where air travel has been rising fast. ‘From a corporate point of view, the main investment is in aviation financing,’ says Lu. ‘For example, there was only one Chinese bank with an Irish aircraft leasing platform in 2009, whereas this number has grown to at least 12 in 2016.’ Some groups have 50-60 aircraft owned in Ireland, with related accounting and audit work undertaken in Ireland. ‘They typically find a local accounting firm that has Chinese staff, with the language being very helpful and, sometimes, even a prerequisite,’ adds Lu.
One key player is the aviation leasing arm of the Bank of China, one of China’s four biggest banks, which is preparing to open a Dublin branch. While solidifying China-Ireland economic cooperation, this is also an important step in the Bank of China’s internationalisation strategy, which dovetails with Ireland’s international financial services 2020 strategy, according to Jun Tian, head of the preparatory team for Bank of China Dublin branch.
Ireland has also drawn much interest from wealthy Chinese seeking to acquire citizenship in return for investment. The scheme, which is operated by the Irish Naturalisation and Immigration Service, has proved popular with billionaires from China who must invest between €500,000 and €1m in Irish enterprises, real estate or Immigrant Investor Bonds. Adverts by immigration consultants in Chinese newspapers seen by Accounting and Business stress that Ireland does not tax universal income, a requirement that can deter immigration to jurisdictions that do this, such as the US. After five years, applicants on the scheme are entitled to apply for permanent residency in Ireland.
According to one such advert: ‘Irish residency status offers ease of travel in the EU, but also benefits in terms of tax avoidance and asset security.’
As an example of a source of future growth, PwC’s Thompson points to Dublin’s huge funds sector: the influx of hedge funds into Dublin has been a boon for the legal and accounting fees that the companies generate. Crucially, funds based in Dublin are now able to tap into China’s stock markets through an agreement between Dublin and Beijing (ever keen to tap foreign funds to boost an erratic local stock market).
In 2016 China gave Ireland an investment quota worth CNY50bn (€6.89bn) under its Renminbi Qualified Foreign Institutional Investor (RQFII) scheme – a programme under which overseas institutions can use Chinese currency raised offshore to invest directly in mainland China shares, bonds and money markets. ‘This is a route for the Chinese government to expand its Chinese funds institutions into another country. We expect an inflow of fund managers from China into Ireland,’ says Cao.
While foreign investors have been keen to use the RQFII quota scheme to access Chinese exchanges, China is also keen for liquidity to boost its stock markets. Ireland is the leading European base for internationally distributed exchange-traded funds (ETFs): funds domiciled in Ireland manage assets exceeding €199bn – more than 49% of the European market.
Ireland also hosts the largest hedge fund administration centre in the world, representing over 40% of all global hedge fund assets with €3.8 trillion in over 13,037 investment funds located in Ireland. These are free from corporation and redemption taxes, and exempt from Irish tax on their income or gains, irrespective of where investors are located.
Meanwhile, Chinese business models are also attractive to Irish-based firms. Small-and-medium-sized firms have been keen to adopt online strategies popular in China, the world’s largest e-commerce market, notes Teresa Cui Hayes, principal at Cui Hayes & Co, a Dublin-based accounting and auditing practice. China-born Cui says her firm is increasingly expanding its business consulting as well as accounting services to Chinese and Irish firms: ‘There has been a big change in business and many of our clients are traditional businesses like supermarkets and they are really under pressure. I am advising them on how to add an online dimension to their business.’
Chinese investors are also very keen to purchase Irish tech firms, whose EU single-market access and EU regulatory compliance are attractive, notes Cui. A corporate tax rate of 12.5%, tax concessions for research and development, and solid intellectual property rights are also draws for tech firms.
Chinese telecommunications equipment-maker Huawei has invested €35m in Ireland, creating 300 jobs and lots of R&D. There are 20 Chinese companies in Ireland currently, and John Conlon, the executive vice president and head of Asia Pacific operations at IDA Ireland (Industrial Development Authority) aims to draw 20 more firms from China by 2020.
Mark Godfrey, journalist
"China's import and export trade with Ireland is growing at a faster pace than that of any other European country"