LK Shields survey finds ‘red tape’ obstacle for Irish businesses

David Williams
David Williams

One in three Irish businesses cite “red tape” as an obstacle to recruitment, growth and innovation, according to a survey conducted by corporate law firm LK Shields.

The firm’s inaugural Red Tape Survey, launched at a special event in Dublin’s Merrion Hotel, found that 85 per cent of respondents believe the cost burden associated with business regulation in Ireland needs to be reduced.

The survey received responses from 300 large and small-to-medium enterprises (SMEs) across all sectors, including the service, retail, finance, manufacturing and construction industries.

Over 80 per cent of businesses surveyed employ between 25-99 people, while 9 per cent employ 100-249 and 8 per cent employ more than 250 people.

Its findings, published in full on the LK Shields website, include:

  • 56 per cent of businesses saw compliance costs increase faster than business growth over the past year
  • 6 per cent of annual turnover is typically spent on meeting compliance obligations
  • 66 per cent of Irish businesses believe there is too much red tape involved in doing business in Ireland
  • 3 in 5 business agree that an independent body should be established to review the impact red tape has on Ireland’s competitiveness
  • 79 per cent of businesses believe that policy makers should examine the legislative and administrative process to change the regulatory burden in Ireland.
  • David Williams, head of financial services at LK Shields, said: “As advisors to leading Irish companies, we see first-hand the burden red tape places on businesses of all sizes in Ireland.

    “We acknowledge and support the necessity of robust regulation in all business sectors, but we also firmly believe that much greater efficiencies can be achieved without letting regulatory standards slip, particularly when it comes to the administrative burden of compliance.

    “Our Red Tape Survey will hopefully spark much-needed debate and action to resolve the issues highlighted.”

    Aidan Sweeney, senior policy executive of the Irish Business and Employers Confederation (Ibec), added: “Ibec believe there is unnecessary regulatory and administrative costs to conducting business in Ireland.

    “The European Commission has estimated that the cost of regulation on the Irish economy is equivalent to 2.4% of GDP – or €4.5 billion per annum.

    “We are calling on policy makers to introduce concrete priorities in the next programme for Government, including the introduction of a new national legislation database to track development of all new initiatives through the policy making stages.”

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