Record job creation year by multinationals in Republic, says IDA

Multinationals based in Ireland announced a record number of new jobs this year even as the economy struggled with Covid-19, said IDA Ireland.

And the agency added that more than half of the new investments announced by it were for regions outside Dublin.

Chief executive Martin Shanahan said the Government’s decision to sign up to the OECD’s international tax agreement was unlikely to have a big impact on foreign direct investment (FDI).

“Based on the feedback that we have received from client companies, we do not see this change, significantly impacting our focus,” said Mr Shanahan, adding that only a small handful of organisations will move to the 15 per cent rate.

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He also said it was an “open question” on whether the OECD deal would ever be implemented.

The agreement, which the State signed up to in early October, comes into force in 2023. It means the Republic bringing to an end the 12.5 per cent corporate tax rate that has applied here since January 2003.

The agency said companies investing in Irish operations announced 29,057 additional jobs. Allowing for losses in the foreign direct investment sector, there was a net increase in employee numbers to 16,826.

The IDA said 275,384 people are now directly employed by such companies, a record number. This compares to 257,394 last year.

Of the 249 investments announced during the year, which was three ahead of last year, 133 were for regions outside of Dublin, equivalent to 53 per cent of all announcements. Some 104 announcements were made by companies establishing a presence in the Republic for the first time.

“The 2021 performance was achieved against a global reduction in FDI,” said Mr Shanahan, but added that “sustaining Ireland’s FDI performance requires a continued focus on capacity constraints and competitiveness challenges”.

Latest available figures

He added that despite only a handful of physical site visits being taken by prospective clients during the year, that the pandemic was not greatly affecting investment decisions.

The latest available figures show there are now close to 1,700 multinational companies supported by IDA Ireland, accounting directly for 11 per cent of the Irish workforce.

Of the 249 investments made this year, 160 came from north America, with a further 68 from Europe, and 21 from “growth markets”, which are largely in Asia.

Capital investment amounted to €7.5 billion, up 3.7 per cent on 2019, with the largest spend coming from the life sciences and technology sectors

Some 106,728 jobs created during 2021 were in the information and communications services sector, up 8.8 per cent year on year. Modern manufacturing accounted for the second largest number of new jobs at 96,319, a rise of 4.3 per cent on 2020. In addition, more than 51,000 roles were created in the business, financial and other services sector and nearly 22,000 in traditional manufacturing.

Tánaiste Leo Varadkar welcomed the results, which he said showed the State “continues to be considered an excellent destination for those seeking to invest”.

He warned however that the continued flow of FDI into the Republic cannot be taken for granted.

“I know the huge amount of relationship building is required to win each and every one of the 249 investments over the last year – especially during a pandemic,” he said.

Mr Varadkar also downplayed the impact of the OECD deal on FDI. “For most companies in the State, nothing will change; 95 per cent of enterprises are outside of the scope of the agreement, that is, assuming it is ratified and implemented,” he said.

“For the larger companies affected by Ireland’s decision to join the OECD agreement, they now have greater clarity, a long-term view, and the assurance of enduring stability on tax policies as they make decisions about where to invest,” added Mr Varadkar.