1.6 Foreign Direct Investment

1.6 Foreign Direct Investment

Foreign Direct Investment (FDI) continues to be a key contributor to Ireland’s economic development and growth. There are now over 1,600 IDA Ireland supported client companies in Ireland. In 2020 employment growth within IDA’s multinational client base grew by 3.6% to reach a record of 257,394 people employed across Ireland.

Figure from page 10

Total IDA client employment

250,000

230,000

210,000

190,000

170,000

2020

150,000

130,000

Figure from page 10

2006 2008 2010 2012 2014 2016 2018 2020

The attraction of Foreign Direct Investment (FDI) has been a central part of Ireland’s enterprise policy since Ireland first took proactive measures to secure internationally mobile investments in the 1950s.

Companies choose to invest in Ireland for a variety of reasons but primarily, because Ireland is regarded and regularly ranked as one of the best places in the world to do business. They are drawn by Ireland’s young, highly educated, highlyskilled, multi-lingual work force, our membership of the European Union, the strong base of existing FDI companies, the proximity to the European market, a consistent, attractive tax regime of 12.5%, a much-improved cost competitiveness and a safe and secure Common Law jurisdiction.

Multinational Companies (MNCs) invested approx. €25.2 billion directly in the Irish economy, including expenditure on Irish materials and services totaling €10.1 billion and an annual payroll spend of €15.1 billion. In addition, MNCs inject capital expenditure of €7.9 billion on new buildings, machinery and equipment, leading to high levels of employment in the Irish construction sector.

The Impact of FDI on Irish Good Exports % change (y/y November 2020)

5%

Figure from page 11

Exports up by

10.7% in 2019 to €255.3bn

0%

-5%

-10%

IDA Client exports as share of national total 68%

-15%

-20%

€230.7bn

€255.3bn

€196.6bn

Ireland

EU

Netherlands

Spain

Germany

Italy

€176.9bn

€134.6bn

€159.6bn

€116.3bn

€123.8bn

€124.2bn

€105.4bn

€43.6bn

€48.8bn

€50.2bn

€45.6bn

€46.4bn

€55.3bn

€61.8bn

€65.9bn

€98.7bn

€84.4bn

FDI companies exported 68% of all national exports in 2019 with a value of €255.3 billion up 10.7% on 2018. IDA supported MNCs directly accounted for 10% of national employment in 2019. It is estimated that FDI in Ireland directly and indirectly accounts for 463,000 jobs in 2020, approx one quarter of employment in the private sector in Ireland.

2010

2011

2012

2013

2014

2015

2016

2018 2017

2018

2019

Exports Net Exports (Exports – Imports)