Author name: waseem

  Ireland’s investment market is entering a period of significant change as investors, asset managers and financial institutions give greater attention to environmental, social and governance factors. Sustainable finance is becoming increasingly relevant to investment decisions, supported by changing investor expectations, climate-related financial risks and the continued development of European regulation. Ireland’s position as a major European funds and international financial services centre gives it an important role in this transition. The Central Bank of Ireland reported around 9,100 investment funds in January 2026, while its 2026 Regulatory and Supervisory Outlook confirms that compliance with the Sustainable Finance Disclosure Regulation remains an area of supervisory attention. The market is therefore moving beyond broad sustainability claims. Investors increasingly need clear information about investment strategies, sustainability characteristics, risks and expected outcomes. For financial businesses, this creates opportunities while also increasing the importance of strong governance, accurate disclosures and regulatory awareness. What Is Driving Sustainable Finance Growth in Ireland? Several factors are contributing to the changing investment environment in Ireland. Investor expectations have evolved, with institutional investors, pension schemes and asset managers increasingly considering environmental and social factors alongside traditional financial analysis. Climate-related risks are another important driver. Changes in weather patterns, energy systems, regulation and consumer behaviour can affect businesses and investment portfolios. Financial institutions therefore increasingly assess how climate risks could influence asset values, credit exposure and long-term returns. Regulation is also influencing investment practices. European requirements increasingly expect financial market participants to provide clearer information about sustainability risks and characteristics. This has made sustainability considerations more relevant to product design, investment analysis and reporting. The trend is supported by broader market activity. In December 2025, the Central Bank noted that sustainable fund assets in Europe had increased from €3.7 trillion in 2021 to €9.1 trillion in 2024, while green mortgages accounted for 40% of new lending in Ireland. How Is Sustainable Finance Changing Ireland’s Investment Market? The influence of sustainable finance extends across investment funds, banking, insurance, pensions and capital markets. Fund managers increasingly assess sustainability-related risks when evaluating companies, sectors and investment strategies. Ireland’s large investment fund industry makes these developments particularly significant. The Central Bank publishes quarterly information on Irish-resident investment funds, including data on fund assets, exposures and classifications under SFDR. Investment products are also becoming more varied. Green bonds, ESG-focused funds and transition-focused strategies provide investors with different ways to incorporate sustainability considerations into their portfolios. However, investors should not assume that products with similar sustainability terminology follow identical approaches. Some funds may exclude particular industries, while others integrate ESG factors into financial analysis or pursue specific environmental objectives. Reviewing the underlying strategy remains essential. Which Sustainable Investment Products Are Gaining Attention? Ireland’s market includes several investment approaches that incorporate environmental, social or governance considerations. Green Bonds Green bonds raise capital for projects with defined environmental purposes. Eligible activities can include renewable energy, clean transport, energy efficiency and sustainable infrastructure. Ireland has also developed its sovereign green bond market. Since Irish Sovereign Green Bonds were introduced in 2018, €11.5 billion has been allocated to green projects by December 2025. ESG Investment Funds ESG funds consider environmental, social and governance factors within their investment process. Depending on the strategy, a fund may apply exclusions, screening criteria, ESG integration, active ownership or other sustainability-related methods. Investors should therefore examine the methodology rather than relying solely on the fund’s name or marketing material. Transition Finance Transition finance focuses on businesses and economic activities moving towards more sustainable operating models. It can be particularly relevant to sectors where an immediate move to low-emission operations may not be practical. This approach can connect sustainability objectives with the financing needs of businesses undergoing significant operational change. Sustainable Investment Strategies Asset managers can also integrate sustainability factors into portfolio construction and risk assessment without pursuing a single environmental theme. These approaches can vary considerably, making transparency and consistent disclosure important for investors. What Role Does SFDR Play in Irish Investment? The Sustainable Finance Disclosure Regulation is an important part of the European framework for sustainability-related information in financial services. The regulation has applied since March 2021 and requires relevant financial market participants and advisers to disclose sustainability information at the entity and product level. For Irish investment funds, SFDR can affect: Pre-contractual disclosures Website information Periodic reports Sustainability risk disclosures Information about environmental or social characteristics Descriptions of sustainable investment objectives The Central Bank of Ireland continues to monitor compliance with SFDR and related requirements across the asset management sector. The framework is also changing. In November 2025, the European Commission proposed amendments intended to simplify SFDR, improve usability and make the framework more suitable for investors and financial market participants. This means Irish firms need to monitor regulatory developments rather than treating sustainability disclosure as a fixed compliance requirement. How Are Irish Investors Responding to ESG Investment Trends? Investor responses vary according to investment objectives, risk tolerance and expectations around sustainability outcomes. Institutional investors generally have more formal sustainability policies because they manage substantial pools of capital and need to consider long-term financial risks. Pension schemes, insurers and asset managers may incorporate sustainability factors into asset allocation, stewardship and risk management. Retail investors now have access to a broader selection of sustainability-related products. However, greater choice can also make comparison more difficult. Investors may encounter different approaches to ESG screening, exclusions, engagement and impact measurement. A fund that integrates ESG risks into investment analysis can therefore operate very differently from one designed to achieve a specific environmental objective. Clear product information is consequently important. Investors should review the investment strategy, objectives, methodology, costs and risks before making decisions. Why Is Ireland Attracting Sustainable Investment? Ireland has several characteristics that support its role in the European investment market. These include: A large and established investment funds sector Membership of the European Union A strong international financial services industry Experienced asset management and fund administration professionals A developed ecosystem of legal, accounting and advisory services The country also has an established regulatory structure

Research and development can involve high costs for Irish companies developing new products, improving technology, testing production methods, or solving technical problems. The R&D Tax Credit Ireland 2026 regime allows qualifying companies to claim a tax credit on eligible R&D expenditure, subject to Irish tax rules. For relevant accounting periods beginning on or after 1 January 2026, the rate has increased to 35%. This gives companies a reason to review their current R&D activities before preparing their Corporation Tax return. However, not every development project qualifies. A company must meet the required scientific or technological conditions and keep suitable records to support its claim. For businesses operating in Ireland, the R&D Tax Credit can form part of wider tax planning. Technology companies, manufacturers, engineering firms, life sciences businesses and SMEs may all have projects worth reviewing. Finsoul Ireland can help businesses assess potential R&D activities, review qualifying expenditure and prepare the information needed for a claim under the current Irish rules. What Is the R&D Tax Credit in Ireland? The R&D Tax Credit is an Irish Corporation Tax relief available to companies carrying out qualifying research and development activities. A company can claim a credit based on qualifying R&D expenditure when its activities meet the required scientific or technological tests. The relief is not a general payment for research, product development or innovation. The company must show that the work seeks scientific or technological advancement and involves scientific or technological uncertainty. For relevant accounting periods beginning on or after 1 January 2026, the credit rate is 35%. The claim is made through the company’s Corporation Tax process. Businesses should review their projects and costs before filing because routine development, ordinary testing and general operating expenses may not qualify under the Irish rules. What Changed for the R&D Tax Credit in 2026? What Changed for the R&D Tax Credit in 2026? The R&D Tax Credit rules changed in 2026, giving Irish companies a higher credit rate and updating several claim and payment provisions. 35% Tax Credit Rate: The rate increased from 30% to 35% for relevant accounting periods beginning on or after 1 January 2026. €87,500 First-Year Threshold: The first-year payment threshold increased from €75,000 to €87,500. 95% Employee Rule: Specific treatment applies to employee emoluments where an employee spends at least 95% of their duties on qualifying R&D activities. Laboratory Expenditure: The 2026 rules clarify certain expenditure relating to qualifying laboratory construction or refurbishment. Updated Claim Rules: Companies should use the current 2026 rules and figures when preparing their R&D Tax Credit claim. Who Can Claim the R&D Tax Credit in Ireland? A company must satisfy the relevant Corporation Tax and R&D requirements before making a claim. Irish Corporation Tax company: The claimant must fall within the relevant Irish Corporation Tax rules. Qualifying R&D activity: The company must carry out work that meets the required scientific or technological conditions. Eligible location: Qualifying activities may be carried out in Ireland and, subject to the applicable rules, certain activities may qualify when carried out in the EEA or UK. Qualifying expenditure: The claim must relate to expenditure that meets the relevant R&D Tax Credit requirements. Supporting evidence: The company must have records that support both the nature of its R&D work and the amount being claimed. What Qualifies as R&D Under Irish Rules? A project does not qualify simply because it is new to the company or involves technology. The activity must satisfy the relevant Irish R&D tests. Scientific or technological field: The work must relate to an appropriate field of science or technology. Scientific or technological advancement: The project should seek an advancement in the relevant field. Scientific or technological uncertainty: The company must face a genuine uncertainty that cannot readily be resolved using existing knowledge. Systematic investigation: The work should involve a structured process of investigation, testing or experimentation. Qualifying R&D activity: The project should fall within the relevant categories of basic research, applied research or experimental development. What R&D Expenditure Can Companies Claim? After identifying qualifying projects, the company needs to assess the costs connected with those activities. The 35% rate should not simply be applied to the entire development budget. Employee Costs Employee expenditure can make up a large part of an R&D claim where staff are engaged in qualifying activities. The company should be able to connect employee costs to the relevant R&D projects and work carried out. Materials and Consumables Materials used during qualifying R&D activities may qualify where they meet the applicable conditions. Businesses should keep records showing how these materials relate to the relevant research or development project. Subcontracted R&D Certain expenditure on subcontracted R&D may qualify, subject to the applicable Irish conditions and limits. Contracts, invoices and descriptions of the work should be retained. Utilities and Related Costs Certain costs connected with carrying out R&D may be considered under the relevant rules. Businesses should separate R&D-related expenditure from ordinary operating costs when preparing the calculation. Capital Expenditure Certain capital expenditure connected with qualifying R&D facilities may qualify where the required conditions are met. Laboratory-related expenditure should receive particular attention when preparing a 2026 claim. How Much Is the R&D Tax Credit Worth in 2026? For relevant accounting periods beginning on or after 1 January 2026, the Irish R&D Tax Credit rate is 35% of qualifying R&D expenditure, subject to the applicable conditions. A simple calculation can show the potential value of the relief. If a company has €100,000 of qualifying R&D expenditure, 35% would produce a potential credit of €35,000. If qualifying expenditure is €250,000, the calculation would be €87,500.  These examples do not mean that every company spending €100,000 or €250,000 on development will receive those amounts. Only expenditure that meets the relevant rules can be included. The payment structure also needs to be considered because the credit is dealt with through the Irish tax system under specific instalment rules. Companies should therefore assess each project and cost category before applying the 35% rate to their claim. How Does the R&D

Ireland EU Presidency began on 1 July 2026 and will continue until 31 December 2026, giving Ireland the responsibility of chairing meetings of the Council of the European Union, helping Member States reach agreement and progressing EU legislative and policy discussions. For Irish businesses, this period creates an opportunity to influence discussions around competitiveness, the Single Market, investment, digital transformation, innovation and trade. Finsoul Ireland helps businesses understand changes in the European business environment and assess how regulatory, economic and trade developments may affect their operations. While the Presidency does not directly change Irish business law, the policies and legislative files advanced during this period can influence the conditions in which companies operate across Ireland and the wider EU. What Does Ireland’s EU Presidency Mean for Irish Businesses? The Council Presidency rotates between EU Member States every six months. During its term, Ireland chairs Council meetings, facilitates negotiations between Member States and works to build consensus on legislative and policy matters. Ireland is holding the Presidency for the eighth time, following Cyprus and preceding Lithuania. For businesses, the significance lies in the issues Ireland chooses to prioritise and the progress it helps achieve on EU proposals. Companies may see longer-term effects from measures concerning the Single Market, competitiveness, digital transformation, industrial policy, investment and regulatory simplification. The Presidency does not give Ireland unilateral authority to introduce EU laws. Final legislation still follows the EU’s established decision-making process involving the Council, European Parliament and European Commission. What Are Ireland’s Main EU Presidency Priorities? Ireland’s programme places strong emphasis on creating a more competitive, innovative and resilient European economy. The Government has identified investment, simplification, business growth, sustainable and digital transitions and open, rules-based trade as important themes. Key priorities include: Strengthening European competitiveness Improving the functioning of the Single Market Reducing unnecessary regulatory burdens Supporting SMEs and scaling businesses Encouraging investment and innovation Advancing digital and AI transformation Supporting sustainable industrial development Strengthening economic resilience and supply chains Promoting quality employment and skills Supporting open, rules-based international trade These priorities are particularly relevant to Irish companies that trade across EU borders or depend on European supply chains. How Could the Presidency Affect Irish Businesses? Ireland’s EU Presidency could affect businesses mainly through the EU policy and legislative agenda that Ireland helps progress during its six-month term. The practical impact will depend on which proposals reach agreement and how subsequent legislation is implemented. The Department of Enterprise, Tourism and Employment has identified several priority legislative files, including EU Inc, the Industrial Accelerator Act, Chips Act 2.0, the European Product Act and the European Competitiveness Fund. For Irish businesses, developments in these areas could influence: Company formation and expansion Access to EU markets Regulatory compliance Investment opportunities Digital infrastructure Manufacturing competitiveness Innovation and technology adoption Cross-border trade Supply-chain resilience Businesses should therefore monitor developments rather than assume that every Presidency priority will immediately create a new legal obligation. How Could the Single Market Benefit Irish Companies? The Single Market is one of the most commercially important areas of the Presidency for Irish companies. Ireland has identified the removal of barriers to cross-border trade in goods and services as a major priority. In May 2026, the Government announced a new Single Market Taskforce, Single Market Office and Advisory Panel to help identify and address barriers affecting businesses. The initiative aims to reduce regulatory fragmentation and make it easier for Irish companies to trade and scale across Europe. Improved Single Market functioning could benefit companies by making it easier to: Sell products in other EU countries Provide services across borders Expand into new markets Build European supply chains Recruit and operate across Member States Scale business operations For SMEs in particular, reducing administrative complexity could make cross-border expansion more practical. What Does the Presidency Mean for Irish Trade? Ireland’s presidency places trade within a broader agenda of competitiveness and open, rules-based economic relations. The government has stated that promoting open trade and strengthening Ireland’s international economic relationships remain important elements of its wider economic policy. The Presidency can provide Ireland with greater visibility when EU member states discuss trade-related priorities. However, businesses should distinguish between Ireland’s role as Council President and the EU’s wider authority over common commercial policy. A trade agreement negotiated at EU level can create opportunities for Irish exporters by improving market access, reducing certain barriers and establishing common rules. The actual effect depends on the specific agreement, sector and implementation requirements. How Could Trade Agreements Affect Irish Businesses? A trade agreement can influence the costs and conditions associated with international trade. Depending on its provisions, it may address tariffs, customs procedures, market access, regulatory cooperation, intellectual property or public procurement. For Irish businesses, the potential effects include: New export opportunities Improved access to international markets Changes in import costs New compliance requirements Greater competition from overseas businesses Opportunities to diversify supply chains Businesses should assess each agreement based on their products, markets and supply-chain structure rather than assuming that every agreement will have the same commercial impact. What Role Does Foreign Affairs and Trade Play? Ireland’s trade policy involves cooperation across Government, with the Department of Foreign Affairs playing an important role in Ireland’s international relations and external economic engagement. The Government’s market diversification work also identifies EU Presidency opportunities to advance the Single Market and support Irish-based companies. The broader trade agenda includes strengthening relationships with international partners, supporting exporters and maintaining Ireland’s commitment to open and rules-based trade. For businesses, this means international market opportunities should be assessed alongside EU policy developments, bilateral relationships and changes in global trading conditions. How Could SMEs Benefit From Ireland’s EU Presidency? Small and medium-sized businesses are a clear focus of Ireland’s Presidency agenda. The Government has highlighted reducing administrative burdens and improving the business environment for SMEs as cross-cutting priorities. Potential benefits include simpler regulatory processes, better access to the Single Market, improved opportunities to scale and greater support for innovation. However, these benefits will depend on the final outcome of