Seán Kenny (Dublin North East, Labour)

This Bill proposes a number of focused changes to company law in the interest of maintaining a flexible operating environment, particularly for companies that bring foreign direct investment to Ireland. The Bill amends the provisions of the Companies (Miscellaneous Provisions) Act 2009, which permits the use of US accounting standards - referred to in the Bill as US GAAP - in the preparation of the accounts of a specified category of company, and allows for the prescription of the use of other internationally recognised accounting standards. Without changing eligibility criteria, the Bill extends both the timescales relating to the availability for use of US accounting standards and the period for which an individual company can avail of this provision. There was already a sunset clause and a maximum period companies could use, both of which are being amended. The Bill also correspondingly extends the periods in respect of the provision in that Act for the prescription of other internationally recognised accounting standards.

These measures can be seen in the context of the Government's policy of encouragement and facilitation of foreign direct investment. The importance of foreign direct investment to the economy remains highly significant. FDI accounts for a total of 250,000 jobs, one in every seven, in Ireland. The immediate outlook for Ireland's foreign investment portfolio is exceptionally good. To date in 2012, there have been 25 investment announcements, with the potential to create more than 4,000 jobs. It is encouraging to note that notwithstanding the economic downturn, Ireland continues to be an attractive location for foreign direct investment and that so many companies are prepared to undertake and announce these investments in Ireland. Foreign direct investment has a major role to play in the current situation where Ireland is in the process of emerging from a period of unprecedented financial turbulence and where critical stages in that process still lie ahead. The Government has operated on a wide variety of fronts in addressing the task of repairing our economy and restoring our international reputation. We are engaging with our European colleagues, the United States and many other countries to demonstrate that Ireland is squaring up to its economic difficulties and has the intent, resolve and imagination to overcome them.

As a member of the European Union, Ireland offers international investors a stable political and economic environment and a sophisticated and well developed corporate, legal and regulatory environment. The quality of our economic regulation is a significant factor in our competitiveness and growth. It is critical, therefore, that we have the capacity to respond to economic circumstances as they unfold in a way that is both strategic and reflects the evolving needs of business and investors. Those companies with a presence in Ireland and availing of the US GAAP facility under the 2009 Act provide significant employment here which this Bill should help to consolidate, with the possibility of further jobs being created, particularly if the economic situation in export markets picks up over time. Those companies are involved across of range of industry sectors, including health care, technology and services.

In my constituency of Dublin North-East, an announcement was made in April of 280 new jobs in Baldoyle with Mylan Inc, a key member of the Irish pharmaceutical sector providing high quality generic pharmaceuticals and over the counter medicines around the world. This was a very welcome announcement for Baldoyle and Dublin. It is a further sign that Ireland is attractive as a location for investment and serves to demonstrate why legislation such as this is important. At a time when unemployment is at very high levels, the Mylan and other announcements from US companies such as Amgen, Apple, Twitter and Paypal, show that Ireland is able to entice investment and to create jobs along with that investment. Jobs and investment are the only way our economy will ever recover properly. This legislation serves to show multinational companies that Ireland is a good place in which to do business.

I understand that the new Bill will run to over 2,000 sections, will consolidate existing Irish company legislation dating back to 1963 and will introduce several reforms. The Bill will consolidate the existing 15 Companies Acts - 16 when the Bill currently before the House becomes law - dating from 1963 as well as other regulations and common law provisions relating to the incorporation and operation of companies into a single Act which is expected to comprise 1,400 sections. Parts 1 to 15 of the Bill contain all of the laws relating to the most common company type in Ireland, the private company limited by shares.

In summary, the provisions of the Bill cover the incorporation of companies, corporate governance, sureties for directors and secretaries, financial statements and auditors, receivers, reorganisations, examinerships, wind-ups, compliance and enforcement. These provisions are brought together in a coherent structure which will facilitate business people in incorporating and operating companies on a day to day basis.

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