Vol. 402 No. 9
51 Mr. Spring asked the Minister for Finance if he will outline the regulations concerning the purchase of shares in overseas companies by Irish individuals or companies; if the permission of the Central Bank is required for such transactions; and if he will make a statement on the matter.
The rules governing the purchase of shares in overseas companies by Irish resident individuals and companies are set out in sections 21 and 22 of the Exchange Control Notice dated 1 April 1990. In summary these are direct investment and portfolio investment. A direct investment is an investment which has the effect of establishing lasting and direct links between the investor and an enterprise and which enables the investor to participate effectively in its management or control. Each direct investment must be referred in advance to the Exchange Control Department of the Central Bank for verification. Bona fide direct investments in EC countries are permitted freely and may be financed entirely from Irish pounds. The cost of authorised direct investments outside the EC must normally be financed substantially with foreign currency.
On portfolio investment, residents may freely purchase medium and long-term foreign securities or any securities issued by the EC or EIB through an approved agent in the State, with Irish pounds, provided each purchase is immediately notified to the Central Bank on Form S.2. Purchases of short-term foreign securities should normally be financed with borrowed foreign currency or sale proceeds of similar securities. Short-term securities are mainly those with a maturity of less than two years at date of issue and money market securities.
