Bankruptcy Regime Will Stem Business-Brain Drain
Recent changes to the bankruptcy regime in Ireland will boost the economy by stemming the flow of Irish entrepreneurs to the UK.
The Insolvency Service of Ireland anticipates that bankruptcy cases will double following the reduction of the normal bankruptcy term to one year in January. It’s safe to say that a large number of those cases will involve business ideas people - risk takers whose endeavours can make an economy tick.
A huge surge in enquiries received by our firm in the first three months of the year - more than twice the number when compared to the last quarter of 2015 which corresponds with the ISI prediction.
Many of those seeking advice are entrepreneurs who, thankfully, will not now be forced to relocate to the UK to avail of a fresh start in business after just 12 months. Keeping such business brains at home can only be good for our economy.
The Consequences Of Bankruptcy Tourism
A glut of Irish entrepreneurs whose dreams were shattered by the economic bust - a large number through no fault of their own - have moved to the UK since 2008. The streams of so-called ‘bankruptcy tourists’ left Ireland to set up their centres of main economic interest (COMI) in the UK in order to avoid punitive 12 year bankruptcy periods (reduced to three years in 2012).
A large number of these architects of our boom years have remained in exile, started afresh after just one year of bankruptcy and are now flourishing once again. Business people from across the range - trades, professional services, medical services, retail and many others are now successfully contributing to the British economy.
Ireland's Business Brain Drain
It appears that Ireland’s loss in bankrupts was the UK’s gain in entrepreneurs. Some of the big names in the flight of Irish bankrupts – including property boom tycoons Ray Grehan and Bernard McNamara, Westlife star Shane Filan, and bankruptcy tourism poster boy Ivan Yates - may have returned to Ireland but a large number with much lesser profiles have not.
Thankfully, Ireland’s new bankruptcy regime is shaped to help stem the business-brain drain and ensure we keep more of our future successful entrepreneurs at home. The country needs these entrepreneurs back in business to generate employment and kick start a new era of economic prosperity. Such people helped to get the economy performing in the first place, they will do it again and we will see the benefits.
New Regime Removes The Need To Flee To The UK
The purpose of the UK’s one year bankruptcy rule was to boost the British economy by facilitating entrepreneurial spirit and Ireland’s new regime will have a similar effect. It’s well known that many high profile entrepreneurs endure failure before tasting success. Like the UK, Ireland’s bankruptcy regime now allows successful entrepreneurs of the future to keep trying in business without being blocked by draconian barriers.
The amendments to the Bankruptcy Act in Ireland have effectively ended the need for Irish people to travel by bringing the rules in line with those of the UK. Bankrupts can now take advantage of a second chance to flourish at home rather than being forced flee.