The value of foreign direct investment (FDI) into Ireland rose by €109.9 billion in 2019, new CSO figures show
However, the report also notes that €15 billion of FDI is classified as “brand new” or greenfield investment. That was just 5.05% of total FDI in 2019 compared to 28.84% in 2014.
A broader measure to include add-on investments and to exclude some investments like intellectual property puts greenfield investment at 20.66% of FDI in 2019 compared to 46.2% in 2014.
The report estimates that 31% of FDI into Ireland can be classified as “pass through”. This means it comes into Ireland and subsequently leaves for another jurisdiction.
Approximately 6% of FDI is comprised of so-called “special purpose entities” (SPEs) which are defined as companies that do not engage in production or services but are used to hold financial assets or liabilities.
The flow of investment by companies out of Ireland rose by €121.3 billion in 2019 and is worth €966.6 billion.
The analysis by the CSO says that over half of the “Irish” companies that own direct investments abroad are in fact “redomiciled PLCs”. These are companies that would have been headquartered in other countries originally but have moved to Ireland, usually for tax purposes.
Native Irish firms employed 296,300 people in their operations abroad in 2019 and had sales of €105 billion. Redomiciled companies headquartered here employed over 700,000 abroad and had sales of €127.5 billion.
Native Irish firms employed 93,000 people in the UK and 62,000 people in the US.
Redomiciled PLCs employed just over 11,000 people in their operations in Ireland.
The US remains the biggest source of FDI into Ireland. In 2019, this stood at just over €700 billion or 71.6%. The second highest was Bermuda at €34.1 billion.
The report noted that the amount of FDI coming from the US increased significantly when intellectual property assets were registered in Ireland from 2015.
In 2014, the US had accounted for 56% of FDI into Ireland.
Luxembourg is the destination for the majority of Ireland’s FDI abroad, accounting for €420.5billion or 41%. Bermuda was the fifth largest destination, accounting for €46.5billion.
The report also reveals how highly concentrated FDI is in Ireland. The top 25 firms make up 71% of investments here.
The same 25 firms account for the lion’s share of profits expatriated from Ireland. 81% of the profit flows went to US companies with manufacturing as their main activity.