More than a third of Irish FDI is ‘phantom’ investment – CSO

New figures show €312bn of FDI in 2018 was destined for elsewhere

The CSO’s report showed that 383,000 jobs were directly linked to foreign investment into the State.

The CSO’s report showed that 383,000 jobs were directly linked to foreign investment into the State.


More than a third of foreign direct investment (FDI) in the Republic, equating to €312 billion, is so-called “phantom” capital, passing through the jurisdiction to finance operations elsewhere, according to the Central Statistics Office (CSO).

In a new report on Irish FDI trends, the CSO said the value of inward investment in 2018 was €874 billion.

This equated to 270 per cent of gross domestic product (GDP) compared with an EU average of just 56 per cent, reflecting what the CSO said was “the highly globalised nature of the Irish economy”.

However, the CSO said 36 per cent or €312 billion of the total was what it called “pass-through investment”, effectively moving through the State en route to subsidiaries in other countries.

CSO statistician Christopher Sibley said many multinational subsidiaries here acted as treasuries for parent companies, distributing funds across their global supply chains.

When pass-though investment, reverse investment (involving subsidiaries making payments back to the parent company), intellectual property (IP) and aircraft-leasing assets are removed, the “remaining inward FDI” accounted for €212 billion or 24 per cent of total value of FDI in 2018.

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This represents the inward investment that is tied to tangible economic activity on the ground here.


The CSO’s report showed that 383,000 jobs were directly linked to foreign investment into Ireland, an increase of 28 per cent or 84,000 since 2012. The CSO’s report shows the majority of FDI jobs were in the manufacturing (94,000) and retail (91,000) sectors.

Average wages in foreign-owned companies were €54,000 a year compared with €37,000 in domestic companies.

All sectors experienced wage growth in 2018, with the largest growth in the information and communication sector and the administration and support services sector, which experienced 29 per cent growth and 25 per cent growth respectively between 2012 and 2018.

The US was the largest investor into the Republic, accounting for more than two-thirds of total FDI or €649 billion and 132,000 jobs. Bermuda was the third-largest country of origin for inward investment.

Dublin had the highest proportion of FDI employment, at 29.1 per cent, followed by Limerick with 25.3 per cent. The lowest proportion was in Monaghan with FDI accounting for just 10.3 per cent.


The research also found there is a higher level of third-level graduates in FDI companies (27 per cent) compared with domestic companies (22 per cent).

FDI companies also employ a greater percentage of foreign nationals (22 per cent) compared with domestic ones (15 per cent).

Surprisingly FDI companies were found to have a lower share of female employees than their domestic counterparts. This may reflect the strong manufacturing component in FDI here, which is traditionally more male-dominated.

Mr Sibley said: “This experimental research has been developed to add value to official statistics by linking FDI figures across domains, in particular to census, employment, and wage statistics, and is intended to highlight the relevance of FDI statistics more broadly.”