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Ultimate Investment

Ultimate Investment

Almost €900bn of Inward FDI in Ireland originated in the US, accounting for 69% of the total

CSO statistical release, , 11am

Analysis of FDI

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 States514.286133712
Netherlands150.371566453
Bermuda138.759915368
Switzerland91.881746607
Luxembourg83.692212052

Source publication: Foreign Direct Investment Annual 2023

Get the data: PXStat BPA34

Inward FDI Positions

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 2023, with the US holding €514.3 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, Bermuda and Switzerland 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 Ireland, the Netherlands and Bermuda in Figure 2.2 are suppressed for confidentiality purposes.

Inward FDI Positions
United States897.345035274
Japan61.296545439
United Kingdom31.215526579
France25.660035306
China21.012597499
Canada12.643817888
Germany11.45395862

Source publication: Foreign Direct Investment Annual 2023

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.

US FDIUS FDI as % of Total
2013179.22404535247855.7150784059946
2014199.71719846628951.8118347519567
2015555.10998728347365.5600378946686
2016516.33151792820463.1385516660854
2017667.65211964170171.4380776478242
2018661.68421807960769.5060232538299
2019751.51833459217366.2397797376842
2020870.53859363320774.7198730477368
2021931.47229816598773.7207425770007
2022914.15520114755867.7036976557723
2023897.34503527377169.0298787246928

Source publication: Foreign Direct Investment Annual 2023

Figure 2.4 shows that Luxembourg receives the largest amount of FDI from Ireland on an immediate investor partner country basis. The figures for the Isle of Man, Singapore and the Cayman Islands are suppressed for confidentiality purposes.

FDI Outward
Luxembourg372.667736989
United States253.308923833
United Kingdom104.989764646
Netherlands99.456758773
Bermuda57.35699515
France14.14457132

Source publication: Foreign Direct Investment Annual 2023

Get the data: PXStat BPA34

Outward FDI Positions

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 Bermuda 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
Ireland908.364988543
United States266.322783334
Other73.629528123

Source publication: Foreign Direct Investment Annual 2023

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 Singapore and the Isle of Man are suppressed for confidentiality purposes.

FDI Income Inflows
Luxembourg13.767
United States10.243
Netherlands5.277
United Kingdom5.24
Germany0.825
France0.774
India0.691

Source publication: Foreign Direct Investment Annual 2023

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. The increase in US in 2023 is due to corporate restructuring and the increase in flows going through Ireland.

Ireland United States Other
201310.8454.9042.85
201411.9345.1683.29
201514.1680.0242.86
201617.7471.232.067
201719.5782.5671.628
201818.8961.5441.655
201919.4780.4851.854
202017.6360.5022.178
202123.02911.6050.719
202223.40113.5021.223
202332.51130.9424.062

Source publication: Foreign Direct Investment Annual 2023

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 2023.

FDI Income Outflows
Unied States92.149
Switzerland24.21
Luxembourg20.827
Netherlands15.199
United Kingdom4.61
Bermuda4.141
Cayman Islands4.041
France2.816
Belgium2.34

Source publication: Foreign Direct Investment Annual 2023

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 2023, the US accrued €155.9 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 States155.874
Ireland6.107
United Kingdom4.573
Netherlands3.467
Japan2.92
France1.995
Germany1.903

Source publication: Foreign Direct Investment Annual 2023

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)
201333.82675.7767871144067
201435.38375.1071959244322
201557.72980.7613211902464
201649.28977.1020069767078
201762.98878.7202399550084
201874.6982.1925345540981
201981.18281.4189290836334
202095.73785.6683936896549
2021141.79290.6644841168346
2022172.86189.8123853711507
2023155.87483.9187268498579

Source publication: Foreign Direct Investment Annual 2023

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., €149 billion in income outflows accruing to the top 25 firms in the distribution.

FDI Income
Top 25148.980189383
26-5021.847177592
51-7511.720953655
76-1006.529573883
101+-3.548842969

Source publication: Foreign Direct Investment Annual 2023

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. The decrease in manufacturing in 2023 is spread across major firms.

AdministrativeFinancial & Insurance ActivitiesInformation & CommunicationManufacturingProfessional, Scientific, and Technical
20132.74110.1137.17521.1810.781
20144.58410.2267.9319.8952.048
20155.24310.1658.73443.1612.756
20165.35710.5099.38233.9733.446
20175.26610.88513.9445.0473.688
20184.7558.78917.01555.0313.341
20194.6597.72621.04958.7015.628
20202.0965.24724.1373.5014.967
20212.07212.27830.333106.6372.446
20225.9912.38737.1131.1693.646
20236.36321.2644.292105.4645.725

The Profitability of FDI

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 income from Ireland, the United States.

Source Publication: Foreign Direct Investment Annual 2023

Get the data: PxStat BPA34PxStat BPA37

Inward FDI ROIOutward FDI ROI
201313.93592050825334.82613188777543
201412.27344891491613.98855979807933
20158.470216629086042.03259870308894
20167.831737776530032.52484988177475
20178.525679264897352.84402194011315
20189.548406788686242.61598445027407
20198.812631776755012.17594267328077
20209.46853547681671.95445191938607
202112.25415687881922.67771594685014
202214.17248586517443.14830978390568
202314.27207955587385.408482846662

Source publication: Foreign Direct Investment Annual 2023

Get the data: PXStat BPA34PXStat 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 €5 to €7 billion, while positions only increased from €10 to €13 billion.

United StatesLuxembourgSwitzerlandBermudaUnited KingdomFrance
201313.31006017540135.5716823096283345.259073129412452.02498383250483.78150321681738.68707831633987
201422.10440007587686.5451615460823547.152006819053828.69453868658095.0661535402284912.6714523454623
20150.9203468690159553.851968644912153.191442156002821.47523560114767.7978584655089211.67285381755
20161.456584314798987.1188990713011721.55118258389325.60843317151676.0123728691157910.6625382418002
20175.037776236605746.1826944372497612.527848700532930.7253674301547.3945481185546311.3413577574977
20183.70927373356519.5466709249172818.167861708472511.00590662386518.3203923909938711.6656066178896
20195.5292650302323816.62554760239417.30552316094053.542334389273638.8207896748278810.3975038861258
20204.085232066518817.0649731035625424.55539202102987.318730071677125.026211623317227.15179389200066
202116.87211084251510.431758954611218.79800541095854.120419667999256.858671015075587.18825615368192
202221.093243369130313.393358623094422.81857604097562.872248431355584.3397052025320311.3268472628522
202317.917846498191524.885230643754126.34908553006932.9842912407504818.234924010279313.9843457826928

Source publication: Foreign Direct Investment Annual 2023

Get the data: PXStat BPA34PXStat 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.

Immediate InvestmentUltimate Controlling Parent
20131.404202131271619.5044758924033
20141.1336537689680717.8047781819183
20150.92034686901595510.3995606857221
20161.456584314798989.5459987021116
20175.037776236605749.43425447878075
20183.709273733565111.287861786507
20195.5292650302323810.8023977943364
20204.0852320665188110.997444650956
202116.87211084251515.222352857855
202221.093243369130318.9093711639906
202317.917846498191517.3705758512838

 Source publication: Foreign Direct Investment Annual 2023

1This differs from the definition prescribed in BD4 by including FDI income on debt.