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In this chapter, Irish foreign direct investment (FDI) is analysed by geography and sector on both the immediate and ultimate investment basis. The immediate investor with respect to FDI refers to the foreign firm that is investing directly into the domestic firm. The ultimate investor or ultimate controlling parent is the firm that has the final controlling power over the immediate investor. The purpose of analysing FDI on an immediate basis is to see where investment is coming from or going to. This reflects the Benchmark Definition of FDI. The purpose of analysing FDI on an ultimate basis is to see where an investment ultimately comes from or where the profits from said investment ultimately accrue.
| Inward FDI Positions | |
| United States | 492.480604961188 |
| Netherlands | 160.505237053279 |
| Bermuda | 142.329491057764 |
| Luxembourg | 136.735471627779 |
| Switzerland | 127.519751033842 |
| Japan | 34.7310756110194 |
Source publication: Foreign Direct Investment Annual 2022
Get the data: PXStat BPA34
In Figure 2.1, the United States, Netherlands and Bermuda are shown to be Ireland’s top three partner countries for inward FDI investments in 2022, with the US holding €492.5 billion in FDI positions in Ireland. In Figure 2.2 however, when we analyse FDI on an ultimate investment basis, the US has almost double the FDI positions in Ireland than it had on the immediate basis in Figure 2.1. This means that a portion of the investment had an origin in the US but entered Ireland from a different country. It is important to note the differences when viewing investment using the two disparate presentations: immediate partner country investment and ultimate controlling parent investment. Notably, significant portions of investment from Netherlands, Luxembourg and Bermuda are evident when viewed by immediate investor, but they are much smaller when analysed by the geography of the ultimate controlling parent presentation. Figures for Bermuda in Figure 2.2 are suppressed for confidentiality purposes.
| Inward FDI Positions | |
| United States | 921.130353194375 |
| Japan | 70.425826621 |
| Ireland | 56.248714222 |
| United Kingdom | 43.803217481 |
| Netherlands | 38.8981229 |
| France | 23.505854806 |
| China | 18.960914108 |
| Germany | 12.86299689 |
Source publication: Foreign Direct Investment Annual 2022
Figure 2.3 describes investment from the United States on an ultimate investment basis. The share of Irish FDI by US investments has risen steadily over the period shown. US FDI positions in Ireland have grown significantly following a large increase in 2015 relating to the financing of intellectual property in Ireland. There were slight decreases in both the share of Irish FDI by US investments and the US FDI positions in 2022.
| US FDI (left axis) | US FDI as a % of Total (right axis) | |
| 2013 | 172.30404029 | 57.2947321348303 |
| 2014 | 197.98056252 | 55.9195376399144 |
| 2015 | 560.03805718 | 68.4994490562763 |
| 2016 | 522.88261141 | 65.56351050142 |
| 2017 | 653.32396334 | 74.0586689118506 |
| 2018 | 660.682354481 | 70.3634433436647 |
| 2019 | 762.13524704169 | 68.6670192847725 |
| 2020 | 871.645191753 | 75.6541620783818 |
| 2021 | 941.680480439 | 74.8898205660124 |
| 2022 | 921.130353194375 | 71.757917827955 |
Source publication: Foreign Direct Investment Annual 2022
Figure 2.4 shows that Luxembourg receives the largest amount of FDI from Ireland on an immediate investor partner country basis. The figure for the Cayman Islands is suppressed for confidentiality purposes.
| FDI Outward | |
| Luxembourg | 384.914964772839 |
| United States | 288.092270007147 |
| United Kingdom | 90.4082996486582 |
| Netherlands | 80.5172553554692 |
| Isle of Man | 76.7835317792197 |
| Bermuda | 45.127940552 |
| Singapore | 17.200539266761 |
Source publication: Foreign Direct Investment Annual 2022
Get the data: PXStat BPA34
Figure 2.5 shows Irish outward FDI on the ultimate basis. Irish outward FDI on an ultimate basis is dominated by the Redomiciled PLCs. These are firms that have headquartered in Ireland legally, but have substantial investments and a significant portion of their operations abroad. The Luxembourg, Netherlands and Isle of Man presence in Irish FDI outward is dramatically decreased when we analyse it on an ultimate basis. These figures are redacted in Figure 2.5 for confidentiality purposes. Instead, Irish outward FDI is shown (which includes native Irish investment as well as investment owned by the Redomiciled PLCs) as well as outward FDI ultimately owned by United States investors.
| Outward FDI Positions | |
| Ireland | 768.693417307 |
| United States | 293.08910757125 |
| Other | 63.397683687938 |
Source publication: Foreign Direct Investment Annual 2022
Figure 2.6 shows Irish FDI income inflows on an immediate basis. This is profit earned on Irish investment abroad. Investments in Luxembourg, the Netherlands and the United States return the largest amount of FDI profits on an immediate investor partner country basis. Figures for Canada, India, Japan, the Cayman Islands, Hong Kong, the Isle of Man and Malta are suppressed for confidentiality purposes.
| FDI Income Inflows | |
| Luxembourg | 13.886 |
| Netherlands | 5.445 |
| United States | 4.156 |
| United Kingdom | 3.522 |
| Singapore | 1.204 |
| Germany | 0.675 |
| Australia | 0.55 |
Source publication: Foreign Direct Investment Annual 2022
Get the data: PXStat BPA37
Figure 2.7 shows Irish FDI income inflows on an ultimate basis. Profits coming into Ireland on FDI are dominated by the Redomiciled PLCs; they account for the majority of the FDI profit inflows. The recent increases in US-ultimately controlled FDI inflows are due to an increase in flows going through Ireland.
| Ireland | United States | Other | |
| 2013 | 11.177 | 4.788 | 2.802 |
| 2014 | 11.573 | 4.927 | 3.349 |
| 2015 | 12.858 | -0.335 | 3.082 |
| 2016 | 15.345 | 0.713 | 2.327 |
| 2017 | 16.414 | 1.946 | 2.462 |
| 2018 | 19.382 | 1.544 | 2.267 |
| 2019 | 19.815 | 0.473 | 2.274 |
| 2020 | 18.35 | 0.502 | 2.31 |
| 2021 | 23.554 | 11.605 | 1.263 |
| 2022 | 23.994 | 15.869 | 1.21 |
Source publication: Foreign Direct Investment Annual 2022
For Irish FDI income outflows, shown in Figure 2.8, the US, Switzerland and Luxembourg received the largest amounts of profits on Irish investments on an immediate partner country basis in 2022. The figure for Jersey is suppressed for confidentiality purposes.
| FDI Income Outflows | |
| United States | 101.15 |
| Switzerland | 22.453 |
| Luxembourg | 13.556 |
| Netherlands | 10.489 |
| Bermuda | 4.748 |
| Cayman Islands | 3.956 |
| Belgium | 2.819 |
| Japan | 2.323 |
| France | 2.104 |
Source publication: Foreign Direct Investment Annual 2022
Get the data: PXStat BPA34
Figure 2.9 shows Irish FDI profit outflows on an ultimate controlling parent basis. This graph illustrates the significant amounts of profits accruing to the United States on their investments in Ireland. In 2022, the US accrued €157.9 billion in FDI income from its investments in Ireland. The differences between Figures 2.8 and 2.9 show that while these investments have origin in the US, they are going through affiliates and subsidiaries in other highly globalised countries on their way back to the US.
| FDI Income Outflow | |
| United States | 157.893 |
| Ireland | 3.162 |
| Japan | 2.871 |
| France | 2.327 |
| United Kingdom | 1.95 |
| Netherlands | 1.446 |
| Germany | 1.056 |
Source publication: Foreign Direct Investment Annual 2022
Figure 2.10 shows FDI income outflows to the United States over time and as a proportion of total FDI income outflows on an ultimate controlling parent basis. This graph shows an increasing trend in the total amount of income accruing to the United States from investments in Ireland.
| FDI Income Outflows to US (left axis) | As % of Total FDI Income Outflows (right axis) | |
| 2013 | 33.607 | 76.8704682174798 |
| 2014 | 35.25 | 77.5338729544255 |
| 2015 | 57.354 | 82.4845756691067 |
| 2016 | 48.579 | 79.5646619496855 |
| 2017 | 60.142 | 82.8060030290514 |
| 2018 | 70.45 | 82.7441215851166 |
| 2019 | 74.288 | 80.9872667015524 |
| 2020 | 84.665 | 84.5837995524297 |
| 2021 | 124.64 | 89.8371053769641 |
| 2022 | 157.893 | 89.8328999846384 |
Source publication: Foreign Direct Investment Annual 2022
Figure 2.11 describes the distribution of FDI income outflows from Ireland. It shows that most of the profits made on FDI in Ireland are accruing to a small number of large firms. This can be seen by the high concentration of FDI income at the top of the distribution i.e., €159.5 billion in income outflows accruing to the top 25 firms in the distribution.
| FDI Income | |
| Top 25 | 159.500929773 |
| 26-50 | 17.46919463 |
| 51-75 | 8.341554343 |
| 76-100 | 4.446138294 |
| 101+ | -15.1039675 |
Source publication: Foreign Direct Investment Annual 2022
Figure 2.12 shows a time series of FDI income outflows by sector. The graph shows that the manufacturing sector receives the highest amount of income on its FDI investments in Ireland.
| Administrative | Financial & Insurance Activities | Information & Communication | Manufacturing | Professional, Scientific, and Technical | |
| 2014 | 4.081 | 10.128 | 7.877 | 19.723 | 0 |
| 2015 | 4.795 | 10.1 | 8.625 | 42.956 | 1.495 |
| 2016 | 4.749 | 10.647 | 9.153 | 33.742 | 1.473 |
| 2017 | 4.521 | 10.863 | 13.634 | 41.524 | 1.346 |
| 2018 | 4.178 | 8.707 | 17.015 | 50.035 | 3.341 |
| 2019 | 3.472 | 7.303 | 21.185 | 51.991 | 5.628 |
| 2020 | 1.511 | 5.226 | 24.13 | 62.45 | 4.967 |
| 2021 | 1.572 | 12.047 | 30.41 | 89.638 | 2.446 |
| 2022 | 2.324 | 8.169 | 24.962 | 91.518 | 1.638 |
Source publication: Foreign Direct Investment Annual 2022
The profitability of FDI is measured, as with conventional investment, as the rate of return on the investment. The definition used in this section for the return on FDI is
Return = FDI Income/ FDI Positions
where the equity income return is expressed as a percentage of the total FDI position.1
This measure, when examined across geography and industrial sectors, can give an indication of which investors are making the most profitable foreign direct investments. It should be noted, however, that many factors (structural, cyclical, firm specific) should be considered when drawing inference from these results.
Where country breakdowns are provided, this analysis provides the return data for countries from which the largest amounts of investment into Ireland arrive. Correspondingly, it shows the country which receives the most FDI from Ireland, the United States.
Figure 2.13 illustrates that the FDI return on investment in Ireland is higher than the Irish return on investments abroad.
| Inward FDI ROI | Outward FDI ROI | |
| 2014 | 9.66401426481649 | 3.07491129917088 |
| 2015 | 8.50485182143299 | 1.86767654643599 |
| 2016 | 7.78161555372064 | 2.27444219507224 |
| 2017 | 8.23309938850116 | 2.53028572286456 |
| 2018 | 9.06772256370075 | 2.77995918350015 |
| 2019 | 8.26452833588612 | 2.27982151847322 |
| 2020 | 8.56307594777183 | 2.05395953602646 |
| 2021 | 10.9097094911395 | 2.77057910950353 |
| 2022 | 13.6059000499897 | 3.65025975394875 |
Source publication: Foreign Direct Investment Annual 2022
Get the data: PXStat BPA34, PXStat BPA37
Figure 2.14 shows FDI returns by immediate partner country of investment. The increase in 2015 for Swiss returns on FDI in Ireland is due to income increasing from €3 to €6 billion, while positions only increased from €10 to €12 billion.
| United States | Luxembourg | Switzerland | Bermuda | United Kingdom | France | |
| 2014 | 18.95882408 | 4.94266149 | 28.14227296 | 24.26028873 | 4.3683315 | 9.65726409 |
| 2015 | 0.74530993 | 3.76268716 | 48.97878477 | 21.71738146 | 8.13590828 | 11.65514842 |
| 2016 | 1.2054821 | 6.10089414 | 12.73579632 | 26.69538382 | 5.53739206 | 10.63411102 |
| 2017 | 4.93023432 | 4.91985413 | 11.27941275 | 31.33861837 | 7.43688253 | 10.99082865 |
| 2018 | 3.6935447842031 | 7.77763239113929 | 18.619243406651 | 11.1457434545058 | 7.87944451587308 | 11.3385290790626 |
| 2019 | 5.79492696637244 | 14.2907352422209 | 15.0078687895897 | 3.06252951912931 | 8.56147837707735 | 11.4531982542675 |
| 2020 | 3.89978935254963 | 5.60916920268249 | 20.4229861314084 | 6.3790275287346 | 4.30290018379 | 6.90705520019307 |
| 2021 | 15.2946134911799 | 8.32760040608742 | 14.0605305090215 | 4.01172981453697 | 5.90981163009984 | 6.76006822312262 |
| 2022 | 20.5388799032952 | 9.91403316097967 | 17.6074685042643 | 3.33592143463298 | 4.42957131893054 | 10.1148455754147 |
Source publication: Foreign Direct Investment Annual 2022
Get the data: PXStat BPA34, PXStat BPA37
As shown in Figure 2.9, most of Irish FDI income outflows are accrued by the United States. Figure 2.15 illustrates the return on investment for the US. The rate of return on immediate investment surpassed the rate of return on ultimate investment for the US due to corporate restructuring and an increase in flows going through Ireland. The dip that occurs in 2015 for returns on income on an ultimate investor country basis stems from an increase in the denominator of that figure, which is the US FDI positions, which experienced a large increase that year.
| Immediate Investment | Ultimate Controlling Parent | |
| 2014 | 1.13365376896807 | 17.8047781819183 |
| 2015 | 1.31768395423524 | 10.241089737508 |
| 2016 | 1.03443453404978 | 9.29061302478626 |
| 2017 | 6.89445520564386 | 9.2055401875258 |
| 2018 | 3.6935447842031 | 10.663218038469 |
| 2019 | 5.79492696637244 | 9.74735131177266 |
| 2020 | 3.89978935254963 | 9.71324121340323 |
| 2021 | 15.2946134911799 | 13.2359120305748 |
| 2022 | 20.5388799032952 | 17.1412221356559 |
Source publication: Foreign Direct Investment Annual 2022
| 1 This differs from the definition prescribed in BD4 by including FDI income on debt. |
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