FDI in Ireland
FDI in Figures
After Sweden, Ireland is the second most attractive country in terms of FDI per European Union capita. The structure of FDI has undergone through a transformation, the low value-added activities have been reduced to the profit of R & D and upscale services (engineering, information and communications technologies, pharmaceutical products, medical technology). After having obtained a strong backward flow in 2008 under the effects of the global recession, the FDI picked up again but it still remains weak. Some of the appealing assets of the country are an attractive fiscal and legal frame, a high-skilled and multi-cultural work force and a strong relationship with the United States. However, the country's appeal has been strongly deteriorated by the international crisis and the country has to affront a declining competitiveness.
|Foreign Direct Investment||2007||2008||2009|
|FDI Inward Flow (million USD)||24,707||-20,030||24,971|
|FDI Stock (million USD)||203,683||168,332||193,302|
|Performance Index*, Ranking on 141 Economies||29||141||11|
|Potential Index**, Ranking on 141 Economies||17||20||-|
|Number of Greenfield Investments***||116||183||176|
|FDI Inwards (in % of GFCF****)||36.0||-34.8||7.1|
|FDI Stock (in % of GDP)||78.1||61.9||85.1|
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field 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. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
FDI Inflows By Countries and Industry
|Main Investing Countries||2009, in %|
|Main Invested Sectors||2009, in %|
|Trade and repairs||6.1|
Source: Central Statistics Office
Why You Should Choose to Invest in Ireland
- Strong Points
Ireland's strong points are:
- A strong and thick industrial and tertiary fabric;
- The lowest corporation tax rate in Europe;
- A young and skilled workforce;
- A competitive economy; and
- Developed infrastructures.
- Weak Points
Ireland's weak points are:
- A limited domestic market;
- Growing labor costs.
- Government Measures to Motivate or Restrict FDI
For years, the Irish Government actively promoted foreign direct investment (FDI). Ireland provided an attractive taxation framework to foreign investors, by having one of the lowest taxation rates in the European Union. This strategy has fueled a 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. Nevertheless, the crisis has considerably impacted the country's appeal in terms of FDI. In effect, investors fear long term vulnerability of the Irish economy and a worsening of the unemployment level.
Several state organizations promote investment inflow:
- The Industrial Development Authority of Ireland (IDA);
- Enterprise Ireland;
- Udaras na Gaeltachta.
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