Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 131: To ask the Minister for Enterprise, Trade and Employment the differences in incentives, financial or otherwise, available to foreign direct investors versus indigenous industry in this State. [8559/07]

Micheál Martin (Cork South Central, Fianna Fail)
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State support specific to enterprise and job creation is channelled through the industrial development agencies. IDA Ireland has responsibility for marketing Ireland and its regions for overseas investment and Enterprise Ireland is concentrating on developing the indigenous sector. Shannon Development is responsible for regional economic development in the Mid West region whereas the County Enterprise Boards offer assistance to micro enterprises employing fewer than ten people.

The overall mix of incentives vary from fiscal policies, such as the 12.5% corporation tax rate that all companies can avail of to targeted supports or incentives that are designed to stimulate specific types of business activity. These incentives include funding for certain capital investment, job creation, R&D, training, marketing, and management development.

The focus of Enterprise Ireland supports, in collaboration with the CEBs, will be on measures to promote high potential start-up companies, increase productivity, develop management and international sales capabilities, facilitate access to equity and finance and to support entrepreneurship and micro-enterprise. IDA Ireland will concentrate on financial product and client service measures to support investments. The Agency also provides a range of property solutions for prospective investors and Enterprise Ireland clients.

Government supports to companies in Ireland must comply with the European State Aid Guidelines, which set out the type of companies and eligible activities that can be supported, as well as the maximum funding limits allowed.

The type and level of support companies receive is not determined by whether or not a company is Irish or foreign owned. In agreeing on incentives or supports to eligible companies the main factors that determine supports include:

The activities being undertaken by the company, with support limited to activities that are in line with European and national development objectives for example R & D, training, scaling or expansion of firms. Furthermore, all activities supported must be new or additional to what the company is currently doing;

The size of the company, with some supports available only to small and medium sized enterprises. This is due to the various market failures and barriers to development associated with SMEs. Examples of this include the Business Expansion Scheme, supports for trade fair participation etc.

The Region the company is based in or proposes to locate to, with the level of support higher for companies in the BMW region.

The return to the Economy on the Investment: All major projects supported by the agencies are subject to a detailed Cost-Benefit analysis. This analysis calculates the return to the State by calculating the impact of investments supported on employment taxes, corporation taxes, spend on goods and services in the economy etc.