The stock of foreign direct investment (FDI) in Ireland was down 4 per cent to €1.3 trillion at the end of 2023, new data from the Central Statistics Office (CSO) show.
FDI positions in Ireland decreased by €50 billion in the year, but represented 255 per cent of GDP, which was approximately four times the European Union average. Almost two thirds of inward FDI was concentrated among the top 25 firms.
The United States, Netherlands and Bermuda are shown to be Ireland’s top three partner countries for inward FDI investments, with the US holding €514.3 billion in FDI positions in Ireland.
The US accrued €155.9 billion in FDI income from its investments in Ireland during the year.
On an ultimate investor basis, €897 billion of the inward investment positions in Ireland originated in the US, accounting for 69 per cent of the total.
Inward investment that ultimately originated in Ireland, also known as “round-tripping”, was €100 billion, or 8 per cent of the total positions. Round-tripping refers to domestic funds which leave an economy and return back as FDI.
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A fifth of inward FDI positions were “pass-through investment”, which can be defined as foreign multinationals investing in their Irish affiliates which then subsequently invest in another economy.
Greenfield FDI, representing new investment, was €44 billion. The increase was seen mostly in pharmaceuticals and medical equipment.
About 2 per cent of Ireland’s FDI can be attributed to special purpose entities (SPEs), which are defined as companies set up for reasons that are beyond the production of goods and services, often established for financing purposes or to hold certain assets or liabilities.
The International Monetary Fund defines them as businesses which have no more than five employees, have very little production within their resident economy, have a foreign ultimate controlling parent, and have a high ratio of foreign assets relative to domestic assets.
Broken down by region, the data shows 71 per cent of inward FDI positions were in the eastern and midland region (Dublin, Wicklow, Kildare, Meath, Louth, Longford, Westmeath, Offaly and Laois).
A quarter was in the southern region (Clare, Tipperary, Limerick, Waterford, Kilkenny, Carlow, Wexford, Cork and Kerry), while 4 per cent were in the northern and western regions (Donegal, Sligo, Leitrim, Cavan, Monaghan, Galway, Mayo and Roscommon).
The services sector received the greater share of inward FDI stocks in the eastern and midland regions at 76 per cent, while the manufacturing sector received the greater share of inward FDI stocks in the southern region at 55 per cent.
The manufacturing sector received 94 per cent of inward FDI stocks in the northern and western regions.
Irish FDI positions abroad meanwhile increased by 12 percentage points or €37 billion during the year.
