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Creating a level playing field – no Stamp Duty for ESM companies transferring shares

From 5 June Stamp Duty became no longer payable on the transfer of shares in Irish companies admitted to the Enterprise Securities Market (ESM) of the Irish Stock Exchange (ISE). The new measure was introduced on 17 May by Minister for Finance Michael Noonan in an effort to encourage investors to back small and medium enterprises in Ireland. The signing of this order commences section 70 of the Finance (No.2) Act 2013.

ESM is a market designed for small and medium companies which are in the early stages of growth, and which have specific funding needs. ESM is regulated by the ISE. The exemption from Stamp Duty is to ensure Irish companies in the early stages of development share a level playing field with similar international companies when competing for domestic and international investment. Removing the cost of Stamp Duty to the purchaser will increase the attractiveness of the shares to potential purchasers, and potentially increase direct investment into the company. Currently the transfer of shares in Irish companies attract a 1% Stamp Duty charge; this rate is higher than Ireland’s EU counterparts, many of which have no Stamp Duty payable. 

The Department of Finance estimates the new exemption will cost the exchequer €5 million in the first year. However, the exemption is expected to benefit the Irish economy far more than the expected loss.