It is the exact opposite of the message we have been consistently and expensively broadcasting to the world since the mid-1950s. Of course none of these investors will actually pay that withholding tax. They will either not invest here, or operate here through a branch of a non-resident company. So the only result of this measure is to create business opportunities for other jurisdictions in which the investor will place the residence of his Irish operation. This is bad for the foreign investor, it is bad for Ireland, it is ridiculous.
Nobody has to buy Irish shares.
Many major institutional investors are not located in Treaty States or EU States, and cannot avoid withholding tax even by the paper trail described above. Just at a time when it was suffering pressure from the introduction of the Euro Zone, the Irish stock exchange will face a massive handicap. Fast moving US investors are not likely to be slowed down by the Irish paper trail. Denmark has recently revamped its tax system in a bid to become the holding company location for Europe. Ireland was moving in the direction of being such a location.