Just 25 companies accounted for more than two-thirds of foreign direct investment (FDI) in Ireland, according to the Central Statistics Office (CSO).
The agency released figures on Monday showing the total value of FDI in Ireland rose to a record €1.1 trillion in 2020.
This equated to almost 325 per cent of national income – as measured by gross domestic product (GDP) – making the Republic one of the most globalised economies in the world, second only to Luxembourg – and compares with a European Union average of 79 per cent and an OECD average of 43 per cent.
The CSO’s report also noted that more than two-thirds (68 per cent, about €750 billion) came from just 25 firms.
“This shows how highly concentrated Irish FDI is given that there are thousands of firms that receive FDI investments in Ireland,” the CSO said.
More €839 billion or 76 per cent of the existing stock of FDI also comes from US companies, making Ireland’s FDI heavily concentrated geographically as well.
“The share of Irish FDI by US investments has risen steadily over the period shown, while their FDI positions have grown significantly following a large increase in 2015 relating to the financing of intellectual property in Ireland,” the CSO said.
Foreign multinationals account for more than 80 per cent of the Government’s €15 billion corporation tax pot with the top 10 largest firms accounting for just over half the revenue generated.
The highly concentrated nature of the business tax base here has been widely highlighted as a potential risk factor for the State.
The CSO figures show US FDI in the Republic at €839 billion underpinned 87,473 direct jobs in 2020 whereas UK FDI, which equated to just €15 billion, underpinned 96,416 jobs.
More than a third of FDI in 2020, equating to €258.5 billion, was so-called “phantom” capital, passing through the jurisdiction to finance operations elsewhere. Many multinational subsidiaries here act as treasuries for parent companies, distributing funds across their global supply chains.
In 2020, Irish FDI positions abroad decreased by about €14 billion, and FDI positions in the Republic increased by about €16.9 billion, the figures show. As a percentage of GDP, outward FDI decreased by 9 percentage points and inward FDI increased by 14 percentage points.
The CSO’s figures indicated that Irish FDI outward was dominated by the Redomiciled PLCs, which are firms that have headquartered in Ireland legally, but have substantial investments abroad and a significant portion of their operations abroad.