Seven priorities for entrepreneurs and family businesses in Budget 2027

As Ireland focuses on competitiveness during its Presidency of the Council of the European Union, Budget 2027 presents an opportunity to strengthen support for entrepreneurs and family businesses. From access to capital to succession planning, seven priorities stand out.

In brief

• Budget 2027 should improve access to capital and support entrepreneurs and family businesses to scale and grow.
• Greater certainty and simplification, and stronger succession planning would help businesses plan and invest with confidence.
• Ireland can boost competitiveness by encouraging long-term ownership and reinvestment.

As Ireland holds the Presidency of the Council of the European Union, competitiveness is a defining issue, with policymakers both in Ireland and at a European level focusing on productivity improvement, investment and the facilitation of long-term growth.

Entrepreneurial and family businesses contribute hugely to Ireland’s competitiveness, employing people all over the country, developing talent, and supporting local economies and communities. Regional economies all over the country are heavily dependent on their success.

Helping these businesses scale and transition to the next generation should therefore form an important part of Ireland's long-term growth strategy. Budget 2027 is an opportunity to support Ireland’s entrepreneurs, and to position Ireland as a leading location for entrepreneurship in a European context.

Supporting entrepreneurship requires a joined-up approach to capital, taxation, and long-term investment. As policymakers consider how to strengthen Ireland's competitive position, seven priorities stand out.

1. Unlock and extend sources of capital

Ireland is in a strong, indeed enviable, position relative to many European countries. Ireland has cash deposits in excess of €160 billion, €130 billion+ in pension assets, and significant corporate capital.

However, making that capital available to growing businesses is more of a challenge. Funding is one of the most-frequently cited challenges for entrepreneurs, many of whom find themselves constrained by capital, even when presented with a clear opportunity.

Unlocking more of this capital will require policies and incentives that encourage private savings and institutional investment to flow into growing businesses. There has been a lot of speculation around measures to promote saving and investment. For these measures to be helpful to Irish businesses, there must be thought given to the practical mechanisms that allow that capital to make its way into entrepreneurial and family businesses.

While unlocking capital as outlined above is important, so too is accessing funding more broadly for entrepreneurs. Many Irish businesses continue to rely heavily on traditional bank lending, particularly as they move beyond the start-up stage. Growing companies also need access to a wider range of funding options, including private investment, capital from successful entrepreneurs and long-term institutional investment.

Existing measures such as the Employment and Investment Incentive Scheme (EIIS) have played an important role in supporting investment and could be further enhanced. Budget 2027 presents an opportunity to examine how existing incentives can be strengthened and how additional sources of growth capital can be encouraged.

As we have also repeatedly advocated, policymakers should also consider how to encourage successful entrepreneurs to reinvest part of the proceeds from a business sale in growing Irish companies, while exploring a greater role for corporate and pension capital in supporting indigenous enterprise.

2. Make simplicity and certainty competitive advantages

Successive governments have introduced a range of measures to support entrepreneurship, investment and innovation, including EIIS, Angel Investor Relief, Entrepreneur Relief and KEEP. While each is very valuable in its own right, the overall range of supports can be difficult for entrepreneurs to navigate.

Budget 2027 presents an opportunity to look at these supports from the perspective of the business owner rather than the individual scheme. A more coherent framework, supporting businesses from start-up through scaling, succession and reinvestment, could make it easier for entrepreneurs to access the funding and incentives they need at different stages of growth.

Simplification should be viewed as a competitiveness measure in its own right. A more straightforward and predictable environment, across both business supports and the tax system, would make it easier for entrepreneurs to invest, grow and plan for the future with greater confidence. Ireland could also use its EU Presidency to champion a similar approach at European level by reducing unnecessary complexity in areas like State Aid.

For entrepreneurs making long-term investment decisions, certainty can often be just as valuable as incentives. In short, simplicity and certainty are competitive advantages.

3. Encourage businesses to scale rather than exit early

Many successful Irish businesses reach a point where the entrepreneur must decide whether to sell, look for external investment or continue growing independently. Often that decision is influenced by the availability of patient capital, the tax implications of ownership and practical funding constraints that limit their potential to expand. The objective should be to ensure entrepreneurs have the choice to exit, meaning that they sell because they want to, not because they have no alternative.

Budget 2027 should focus on tackling the issues that can make an early exit the only feasible option. Better access to long-term investment, including long-term equity and quasi-equity arrangements would help more businesses scale further, retain Irish ownership if desired and fulfil their growth ambitions before considering a sale. This could include measures to encourage pension funds and other private or corporate sources of investment to provide more capital to Irish businesses looking to scale, with clear investment structures and arrangements that provide for the sharing of risk.

The tax system should also recognise the difference between situations whereby an entrepreneur wishes to take some capital out of their business (to reduce their own personal risk or plan for a succession, for example) versus a complete exit. The tax system should make it easier for entrepreneurs to do so, while remaining involved in the business and continuing to scale. Enhancing the tax treatment of this scenario could help many entrepreneurs avoid being pushed towards selling the whole company sooner than they otherwise would. A review of how dividends, share buy-backs and partial disposals are taxed, along with a revised Entrepreneur Relief would support this.

Another issue frequently faced by entrepreneurs is around certainty. Logically, entrepreneurs tend to plan for growth looking several years ahead, including investment decisions, and so on. However, the rules and incentives can change from one Budget to the next. This includes changes to tax reliefs, thresholds and criteria for supports available, which can impact plans that are already underway. This can be particularly challenging for earlier-stage businesses entering scale-up stage trying to make longer-term plans around hiring and investment. Furthermore, while each is valuable in its own right, the current range of funds and supports available can be fragmented and difficult to access. There is an opportunity in Budget 2027 for the Government to streamline the supports available by stage, helping more entrepreneurs to understand and capitalise on the supports available at each stage of development.

Helping more Irish businesses to scale is a win-win for entrepreneurs themselves and the wider economy. A greater number of successful private businesses means more employment, more innovation and more investment. Ireland's EU Presidency also provides an opportunity to support deeper European capital markets and a more effective flow of long-term investment to growing businesses.

Put simply, Irish entrepreneurs should be able to remain in, and grow, their businesses without having to sell them because funding or government supports aren’t available.

4. Support family business succession

Family businesses play a vital role in Ireland’s economy, employing people across the country and often taking a long-term approach to investment and growth. Helping businesses transition successfully to the next generation helps ensure valuable businesses, jobs and expertise continue contributing to the economy.

Preparing to hand over a family business to the next generation is a process that typically involves years of thought and preparation, and is one of the most difficult stages of any family enterprise. Frequent changes to rules and criteria can make this process even more challenging. Family businesses need certainty that the rules won’t change halfway through their succession plan.

Under the current system, a transfer of the business to the next generation can create tax liabilities and other costs, even though nobody has actually received any cash. This can mean that the business needs to take money out of the company to fund those costs. Policy decisions when it comes to succession should have the objective of avoiding cash being withdrawn from an otherwise healthy business, so that money can be used instead to invest in new leadership and growth.

The Government has an opportunity through Budget 2027 to provide a clear framework across Capital Acquisitions Tax, Capital Gains Tax and business reliefs that give family businesses certainty as they tackle their succession plans. Business Relief and Retirement Relief should continue and should be focused only on businesses that create jobs and economic activity, rather than supporting assets held purely for investment purposes.

However, tax is only one part of succession planning. Succession plans can take many forms: some businesses wish to remain fully owned by the family, while others may prefer to bring in outside management or investment. Policy should be flexible enough to support these different approaches.

Policy could also do more to encourage businesses to begin the succession planning process earlier. Businesses that start planning early are usually in a stronger position when the time comes to transfer ownership or leadership.

5. Keep entrepreneurial expertise in the economy

Ireland is great at creating successful businesses. However, the majority of focus from Government and state bodies tends to be around helping businesses to start and grow.

Successful entrepreneurs play a huge role in supporting the next generation of entrepreneurs and businesses, even long after they have stepped back from leadership or exited a business. Programmes and networks like EY Entrepreneur Of The Year show the strength of Ireland's entrepreneurial community and the generosity of more established entrepreneurs in sharing their experience, networks and insights with others.

The contribution of successful entrepreneurs should not end when they sell a business. Their experience can become an important source of mentorship, investment and leadership for future generations of entrepreneurs. More could be done to connect experienced entrepreneurs with newer businesses that would benefit from that experience. The Government and State bodies should actively encourage this participation. Often, someone only needs to be asked.

6. Reward long-term ownership and reinvestment

Retaining entrepreneurial expertise is important, but so too is ensuring that the capital generated by successful businesses continues to support future growth.

If Ireland’s ambition is to help more entrepreneurs to build and grow businesses over the long term, the tax system should support it. While Ireland has an incredible track record in building businesses, there is an opportunity to do more to reward long-term ownership and encourage entrepreneurial capital to be reinvested in future growth opportunities.

One challenge that is faced by many entrepreneurs is that the tax system effectively forces them into a binary situation of stay or sell, when many would prefer something in the middle that allows them to reduce their financial risk or take some money out of the business, while continuing to lead it. Allowing entrepreneurs to access a portion of the cash they have created can support longer-term ownership by making it easier for the entrepreneur to remain committed to their businesses while reducing their own personal risk.

Rewarding long-term investment and keeping entrepreneurs in their businesses has significant benefits for the economy and Ireland’s competitiveness. Entrepreneurs who remain invested for longer are more likely to continue expanding their businesses and mentoring management teams, and ultimately investing that capital into new ventures and family business transitions.

7. Invest in the sectors that will drive future competitiveness

Encouraging greater reinvestment by entrepreneurs and investors could be particularly valuable in sectors that will shape Ireland's future competitiveness. As policymakers consider measures to encourage greater investment and reinvestment, consideration should also be given to how capital can be directed towards sectors with the greatest long-term impact, like AI, advanced manufacturing, renewable energy and critical infrastructure.

The objective should be simple: ensure the value created by successful businesses continues to support future growth long after a business has been sold.

If Europe is to improve competitiveness and productivity over the coming decade, it will need more entrepreneurs who continue investing in the next generation of growth companies. Ireland has an opportunity to lead by example.

Conclusion: A competitiveness agenda built around entrepreneurs

Budget measures are often judged by their immediate impact. Their longer-term significance lies in whether they create the conditions for sustainable growth.

As Ireland leads discussions on competitiveness across Europe during its Presidency of the Council of the European Union, it also has an opportunity to foster growth at home. Entrepreneurs and family businesses are among Ireland's greatest competitive strengths, and the success of Budget 2027 will ultimately be measured by whether it makes it easier for them to invest, innovate, reinvest and grow for the long term. That means ensuring businesses have access to the capital they need at every stage of growth, supporting successful succession, and creating an environment where the expertise and investment generated by successful entrepreneurs continue to contribute to future growth.

If Ireland wants to improve productivity, strengthen resilience and remain competitive, entrepreneurship must remain front and centre. That would be a lasting legacy for Ireland's wider competitiveness agenda, long after the dust has settled on Budget 2027.