Ireland

Good drivers for strong GDP growth

The Irish economy is set to accelerate in 2025 after a slight improvement in 2024 (+1.2% in 2024 after a -5.5% in 2023), supported by a generous budget that bolsters both private and public spending. Stable and low unemployment, and rising real wages – along with supportive tax measures – will further drive household consumption. Private investment and household spending will also benefit from further interest rate cuts by the European Central Bank and the Bank of England, easing financial conditions. The 2025 Budget include both increases in day-to-day spending and investments (healthcare, infrastructure and housing) which should support growth further.

However, external risks persist. Ireland’s deep ties to the American economy – both directly through the multinational presence and through tourism – leave it exposed to potential shifts in American policy, particularly if isolationist tendencies gain traction. At the same time, a sluggish European recovery could pose challenges for Irish exports, creating a more uncertain backdrop for the economy even as domestic demand remains a key driver of growth.

Corporate insolvencies have risen sharply in recent years, increasing by nearly 30% annually for three consecutive years. So far, this trend has been concentrated among small and micro-enterprises, particularly in the hospitality sector. While the pace of increase is expected to slow, a further rise in insolvencies remains the most likely scenario for 2025.

Generous budget does not change public surplus

2025 is set to mark another year of positive public balance in Ireland, though the surplus is expected to narrow from its 2024 peak as government spending rises, as outlined in the recent budget. However, strong tax revenues – bolstered by a resilient economy and low unemployment – will continue to support fiscal stability. Despite the increase in public spending, these solid revenue streams will allow the government to maintain financial health while public debt is expected to continue its downward trajectory.

Ireland’s current account surplus is projected to remain positive in 2025, largely supported by the strong balance of goods. However, it remains highly sensitive to external risks, particularly isolationist policies from the US and the potential for new tariffs on the EU, which could disrupt trade dynamics. The balance of services is expected to remain near balance, with continued volatility due to multinational enterprises’ intellectual property transactions. Meanwhile, the structural income balance deficit persists due to significant profit repatriation by multinationals.

While multinational enterprises continue to play a crucial role in Ireland’s economic landscape, their tax contributions and presence in Irish trade remain a key vulnerability, with the government’s strong budget and current account balances highly dependent on these revenues.

General election resulted in continued stability

The general snap elections in November 2024 resulted in a similar government coalition led by taoiseach Michael Martin, with Fianna Fáil and Fine Gael with the support of seven independents (totalling 93 seats out of 174). Sinn Féin, the leftish pro-Irish independence party, got two more seats than at the 2020 election but got a smaller share of first-preference votes and did significantly worse than they had polled just at the beginning of last year. Housing, health and cost of living were the main issues highlighted by voter.

In addition to improving health services and housing, increased defence spending is an important issue for the new government in 2025 with ongoing discussion with both the EU and UK on how to improve Ireland’s defence capabilities. Despite the increased focus on defence, the prospect of joining NATO is still not likely in the immediate future.

Payment

Cheques are still used for both domestic and international commercial transactions, however for international transactions, the use of bills of exchange is preferred, together with letters of credit. Bank transfers are common, with SWIFT transfers being utilised regularly. Direct Debits and standing orders are also becoming more recognised as an effective payment method, and are particularly useful for domestic transactions. Assignment of invoice is accepted both pre- and post-supply of goods and/or services.

Debt Collection

Where there is no specific interest clause, the rate applicable to commercial contracts concluded after August 7, 2002 (Regulation number 388 of 2002) is the benchmark rate (the European Central Bank’s refinancing rate, in force before January 1 or July 1 of the relevant year) marked up by seven percentage points and applied to the contracts via a percentage calculated per day past due date. For claims exceeding €1,270, debtors may be threatened with a “statutory demand” for the winding-up (closure) of their business if they fail to make payment or come to acceptable terms within three weeks after they receive a statutory demand for payment (a “21-day notice”).

Amicable phase

The debt collection process usually begins with the debtor being sent a demand for payment, followed by a series of further written correspondence, telephone calls, personal visits, and debtor meetings. If the two parties are unable to reach an amicable settlement, the creditor may begin legal proceedings.

Legal proceedings

If a defendant fails to respond within the allotted time to a court summons (either a plenary or summary summons before the High Court, a civil bill before the Circuit Court, or a civil summons before the District Court), the creditor may obtain a judgement by default based on the submission of an affidavit of debt without a court hearing. An affidavit of debt is a sworn statement that substantiates the outstanding amount and cause of the claim. It bears a signature attested by a notary or an Irish consular office. The claim amount at stake will determine the competent court: the District Court, then the Circuit Court, and, for claims exceeding €38,092.14, the High Court in Dublin, which has unlimited jurisdiction to hear civil and criminal cases and to assess, in the first instance, the constitutionality of laws enacted by Parliament (Oireachtais).

Fast-track procedure 

In any of the three courts, if the debt is certain and undisputed, it is alternatively possible to request a fast-track summary judgment from the competent court.

District Court: amounts up to €6,348

For contested debts, a civil summons is served on the debtor, with the originating court proceedings setting out the claim and amount alleged owed. The debtor then files a Notice of Intention to Defend, indicating that he intends to contest the case, at which point the court fixes a hearing date. The case is heard before a judge, who decides whether to issue an order for judgment (a Decree).

Dans ce cas, un effet civil est remis au débiteur, qui dépose une Appearance (document formel indiquant l’intention de comparaître du débiteur). Le débiteur demande ensuite formellement, en soumettant une notice for particulars, des informations sur la réclamation, fournies par le créancier. Le débiteur doit présenter une défense dans le délai imparti. Le créancier adresse ensuite au défendeur une notification formelle l’informant de la date de l’audience. Lors de cette audience, chaque partie défend son dossier et le juge rend une décision.

Haute cour : pour les montants supérieurs à 38 093 EUR

High Court: amounts over €38,093

In front of the High Court, a summary summons is served on the debtor, who then files an Appearance. The creditor makes an application to the Master of the High Court for judgment by way of motion and grounded by sworn affidavit. The debtor can reply to the claim by sworn affidavit. If the Master is satisfied that the debt is due and owing, liberty to enter final judgment is granted. However, if the Master is satisfied that the debtor has a genuine dispute, the case is sent for a plenary hearing. During the plenary hearing, the merits of the case are heard either as oral evidence or affidavit. A High Court hears the case and makes a determination.

The commercial court – a special division of the High Court, created in 2004 – is competent to hear commercial disputes exceeding €1 million, included in a commercial list or cases concerning intellectual property, and is able to provide a suitable and rapid examination of the cases submitted. At the discretion of the commercial judge, proceedings may be adjourned for up to 28 days to enable the parties to refer to alternative dispute resolution practices, such as conciliation or mediation.

Normally, obtaining a decision may take a year. However, this timeframe may be doubled if compulsory enforcement is required. Appeal claims brought before the Supreme Court may take an additional three years.

Enforcement of a Legal Decision

A judgment is enforceable as soon as it becomes final. If the debtor fails to satisfy the judgment, the creditor can request the competent court to order execution by way of attachment and sale of the debtor’s assets by the Sheriff. There is also the possibility to obtain payment of a debt through a third party owing money to the debtor (garnishee order).

For foreign awards, enforcement depends on whether the decision is issued in an EU member state or a country outside the EU. For the former, Ireland has adopted enforcement mechanisms; such as the EU Payment Order, or the European Enforcement Order when the claim is undisputed.

Insolvency Proceedings

OUT-OF-COURT PROCEEDINGS

Informal negotiations may take place, and any agreement must be unanimously adopted by all creditors.

EXAMINERSHIP

Examinership is an Irish legal process whereby court protection is obtained to assist the survival of a company; The company may then restructure with the High Court’s approval. It provides a maximum 100 day period in which a court appointed official (the examiner) seeks to take control of the company and manage it so that the company may continue to trade. The procedure may be initiated by the company, its directors, or one of its creditors. Once the examiner has been appointed, no proceedings may be commenced against the company. Its functions are to examine the affairs of the company and to formulate proposals for its survival. The examiner must formulate proposals for a compromise or scheme of arrangement to facilitate the survival of the relevant body as a going concern. They can be accepted by the creditors but they must be validated by the court.

RECEIVERSHIP

The procedure arises in the context of secured creditors and provides a framework in which they may act so as to enforce their security interest. A receiver is appointed to a company by either a debenture holder or the court to take control of the assets of a company, with a view to ensure the repayment of the debt owed to the debenture holder, either through receiving income or realising the value of the charged asset.

LIQUIDATION

The terminal process by which a company is wound up and dissolved, this process is conducted by a liquidator who takes possession of assets and distributes the proceeds from their sale in accordance with the priority of repayment. The liquidator is also required to investigate the conduct of the directors of the company and prepare a report for the Office of the Director of Corporate Enforcement (ODCE). Dependent of its view, the liquidator may also be required to bring restriction proceedings against one or more of the directors. The procedure can be started by a competent court (court liquidation), the creditors (creditors’ voluntary liquidation) or the debtors (members’ voluntary liquidation).

Last updated: March 2025