Ireland: Investing

FDI in Figures

Ireland is an attractive destination for investment but inflows are highly volatile as they are dependent on the activities of large multinational companies that are present in the country. According to UNCTAD's World Investment Report 2022, after falling sharply from USD 149.4 billion in 2019 to USD 80.9 billion in 2020, FDI inflows to Ireland further shrank to USD 15.7 billion in 2021. Ireland dropped to the 25th rank in terms of FDI inflows, but ranked 9th in terms of FDI stock, which reached USD 1,362 billion in 2021 (UNCTAD). According to OECD data, Ireland’s inward FDI flows dropped to negative levels in Q1 2022 (USD -522 million) and in Q2 2022 (USD -36.1 billion). In addition to the COVID-19 pandemic, the war in Ukraine and inflation created a challenging business environment.

The United States is by far the largest investor in Ireland, followed by Luxembourg, offshore centres, Switzerland and the UK. FDI flows mainly target manufacturing, financial intermediation, IT and administrative services (Central Statistics Office). The structure of FDI is changing, as low-value activities are being replaced by R&D and high-end services (engineering, information and communication technologies, pharmaceuticals, medical technologies).

According to the latest The Economist’s Business Environment ranking, Ireland is a top performer, occupying the 8th position out of 82 countries. The business climate is favorable, but it worsened recently due to changes to the tax regime. Having signed the International Tax Agreement in October 2021, the corporate tax rate will be increased from 12.5% to 15% for companies with a turnover of at least EUR 750 million, reducing the attractiveness of the Irish economy. According to the Investment Promotion Agency of Ireland (IDA), more than 32,000 jobs were created through FDI in 2022 (over 24,000 net jobs). In the first half of 2022, investments were up 9% on 2021, with associated employment potential of over 18,000 jobs. In 2021, the agency announced a new five-year strategy, which aims to create 800 investments and 50,000 new jobs, focusing on five pillars: growth, transformation, regions, sustainability and impact. Among the country's assets are an attractive tax and legal framework, a skilled and multicultural labour force, and strong ties with the United States. Ireland is also the only English-speaking country of the euro zone.

Foreign Direct Investment	2020	2021	2022
FDI Inward Flow (million USD)	76,572	-4,930	1,490
FDI Stock (million USD)	1,384,691	1,394,868	1,408,749
Number of Greenfield Investments*	248	291	331
Value of Greenfield Investments (million USD)	12,022	9,569	26,533

Source: UNCTAD, Latest data available.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

FDI STOCKS BY COUNTRY AND FDI FLOWS BY INDUSTRY

Main Investing Countries	2019, in %
United States	21.6
European Offshore Centres	12.8
Netherlands	8.8
Switzerland	8.5
Luxembourg	6.7
United Kingdom	4.0
France	2.2
Spain	1.3

Main Invested Sectors	2019, in %
Manufacturing	39.0
Financial intermediation	20.7
Information and communication	14.6
Chemicals	13.8
Administrative and support activities	6.9
Wholesale and retail trade, repairs of motor vehicles	4.7

Source: Central Statistics Office, Latest data available.

Main Foreign Companies: As of Jan 2020, Ireland welcomed over 1,500 international companies employing a combined total of over 250,000 people in Ireland. Examples include Intel, Yahoo, Adobe, Apple, etc.
Sources of Statistics: Central Statistics Office

What to consider if you invest in Ireland

Strong Points

Ireland's strong points include:

Strong and tightly knit industrial and tertiary fabric
One of the lowest corporate tax rate in Europe
Young, skilled and multilingual workforce
Competitive economy, with pro-business government policies and regulators
Modern infrastructure
One of the lowest unemployment rates in Europe
Strong and stable domestic demand, notably thanks to high wages and living standards.

Weak Points

Ireland's weak points in term of FDI attractiveness include:

The economy is voluntarily very open internationally and therefore highly dependent on the European economy (especially on the UK) as well as the strategies of multinationals that are currently attracted by favourable taxation
The economy is highly dependent on the activities of multinationals: their offshore business, mainly in the form of contract to manufacture abroad, accounts for a quarter of GDP and has a great deal of weight in the labour market
Exposure to the consequences of Brexit
High labor and operating costs
Internal market is relatively small and is under increasing pressure on labour costs
Banking sector remains vulnerable to shocks and the level of public and private debt remains high.

Government Measures to Motivate or Restrict FDI

For years, the Irish Government has actively promoted foreign direct investment (FDI). Ireland provides an attractive taxation framework for foreign investors and has one of the lowest taxation rates in the European Union. This strategy has fuelled robust economic growth since the late 1990s.

More recently, the Government has focused on Ireland’s international competitiveness by encouraging companies with foreign investments to increase their research and development (R&D) activities and to provide goods and services with higher added value. The United Kingdom’s departure from the EU (Brexit) leaves Ireland as the only remaining English-speaking country in the EU, an asset for the country.

Several state organisations promote investment inflows:

The Irish government provides aid grants through its investment organizations, which will only pay grant aid after the foreign investors have achieved externally audited performance targets.

The government has invested heavily in ambitious programs to attract the best researchers specialised in business. Science Foundation Ireland (SFI) is the state science agency that has been responsible for administering Ireland’s R&D funding.
In the same vein, by investing in the entrepreneurial ecosystem, the state seeks to attract entrepreneurs to Ireland who wish to create start-ups with a strong international orientation.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Ireland: To see the list of investment treaties signed by Ireland, consult UNCTAD's International Investment Agreements Navigator.
International Controversies Registered By UNCTAD: Refer to UNCTAD's Investment Dispute Settlement Navigator.
Organizations Offering Their Assistance in Case of Disagreement: ICCWBO , International Court of Arbitration, International Chamber of Commerce
ICSID , International Center for Settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency: Ireland is a signatory of the MIGA convention.

Country Comparison For the Protection of Investors	Ireland	OECD	United States	Germany
Index of Transaction Transparency*	9.0	6.5	7.0	5.0
Index of Manager’s Responsibility**	8.0	5.3	9.0	5.0
Index of Shareholders’ Power***	9.0	7.3	9.0	5.0

Source: The World Bank - Doing Business, Latest data available.

Procedures Relative to Foreign Investment

Freedom of Establishment: Foreign companies and investors have the same rights as local ones. In fact, the Irish investment regime remains among the least restrictive in the world.
Acquisition of Holdings: Foreign and local investors enjoy the same rights. In case of state-owned Irish companies, however, residents may be given priority in share allocations over all other investors.
Obligation to Declare: A formal screening process for foreign investment in Ireland is still being developed. Any company incorporated abroad that establishes a branch in Ireland must file register with the Companies Registration Office. The registration must take place within one month of the establishment of the branch in the country.
Competent Organisation For the Declaration: IDA
Companies Registration Office
Requests For Specific Authorisations: Potential investors are required to examine the environmental impact of the proposed project and to meet with Irish Environmental Protection Agency (EPA) officials.

Office Real Estate and Land Ownership

Possible Temporary Solutions: Companies can temporarily rent a fully equipped office on various online sites: Instant Offices, CoWorker, Irish Office Space, etc.
The Possibility of Buying Land and Industrial and Commercial Buildings: Citizens of countries other than Ireland and other EU member states can acquire land for private residential purposes and for industrial purposes. Under Section 45 of the Land Act, 1965, all non-EU nationals must obtain the written consent of the Land Commission before acquiring an interest in agricultural land, though there are many stud farms and racing facilities in Ireland that are owned by foreign nationals. There are no restrictions on the acquisition of urban land.
Risk of Expropriation: Private property is normally expropriated only for public purposes in a non-discriminatory manner and in accordance with established principles of international law. State condemnations of private property are carried out in accordance with recognized principles of due process.

Investment Aid

Forms of Aid

Grant aid to investors may be given for capital equipment, land, buildings, training, and R&D. Such grants will be paid by the Irish investment organizations only after the foreign investors have achieved externally audited performance targets (generally related to criteria such as employment creation, sales, profitability, exports, etc.).

Privileged Domains

The government strategy is aimed at increasing the number of workers in technology-intensive, high-value sectors.

Privileged Geographical Zones

IDA Ireland supported the construction of business parks in counties Galway and Louth, especially for the biotechnology sector.

Free-trade zones

The Shannon duty-free Processing Zone: companies operating in the Shannon Free Zone are entitled to the following benefits: goods imported from non-EU countries for storage, handling or processing are duty-free; no duty on goods exported from Shannon to non- EU countries; no time limit on disposal of goods held duty-free; minimum customs documentation and formalities; no Value Added Tax (VAT) on imported goods, including capital equipment; choice of having import duty on non-EU product calculated on its landing value or selling-out price. Foreign-owned firms in the Shannon Free Zone have the same investment opportunities as indigenous Irish companies.
IDA Ireland actively encourages investment in regions outside the two main urban centers of Dublin and Cork. For detailed information, consult Enterprise Ireland's Regional Plan.

Public aid and funding organisations


European Regional Development Fund
Udaras na Gaeltachta

Investment Opportunities

The Key Sectors of the National Economy: Household and consumer goods; drugs and pharmaceuticals; electrical power systems; building products, franchising, medical equipment, computer software, information and communication technologies, agricultural sector.
High Potential Sectors: Advanced manufacturing projects in information and communication technologies (ICTs), pharmaceuticals and biopharmaceuticals, medical technologies, engineering and consumer products.
High value-added international services, software, video games, shared services and customer support activities.
Privatization Programmes: Ireland does not have a formal privatisation program at the moment. However, the government is reducing its participation in the banking sector, and measures were taken to open the employment services, bus transport and water sectors. The Irish government previously declared it may sell the electricity generating arm of Electric Ireland as well as some non-strategic elements of the gas supply company Ervia, but no plan has been implemented yet.
Tenders, Projects and Public Procurement: Etenders, Irish Public Tenders
Tenders Info, Tenders in Ireland
Ted - Tenders Electronic daily, Business opportunities in EU 27

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Several state-owned enterprises operate in the energy, broadcasting, and transportation sectors. However, all of them are open to competition for market share.

Finding Assistance For Further Information

Investment Aid Agency: IDA (Ireland's inward investment promotion agency)
Enterprise Ireland
Udaras na Gaeltachta
Other Useful Resources: Why Invest in Ireland - Industrial Development Agency of Ireland
Department of Business, Enterprise and Innovation
Investing in Ireland - Irish Chamber of Commerce Singapour
Doing Business Guides: Investing in Ireland (Deloitte)
Ireland Country Commercial Guide - trade.gov

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