Official figures indicate that just over 30% of the €1,000 billion of foreign direct investment (FDI) into Ireland in 2019 was just passing through before being redirected to entities in other countries.

The estimate is contained in the latest in a series of experimental publications from the Central Statistics Office aimed at providing a better understanding of the impact and importance of FDI.

In 2019, total foreign investment in Ireland represented 288% of economic output, as measured by gross domestic product (GDP). This was significantly higher than the EU average of 62%.

‘Greenfield’ investment

The CSO analysis shows that €15 billion of FDI in 2019 was brand new or ‘greenfield’ investment. It also shows that 25 firms accounted for just over 70% of FDI in Ireland.

The biggest increase in investment in the period from 2012 to 2019 came from Asia, but the US remains by far the largest investor in Ireland, accounting for €734 billion in FDI in 2019.

The CSO analysis finds, however, that much of this investment enters Ireland through other countries, such as Bermuda or the Netherlands.

A substantial portion of the €74.5 billion of income earned by US companies from their Irish investments also returns to its ultimate investors through affiliates and subsidiaries in other countries.

Redomiciled PLCs

The study also finds that almost 300,000 jobs abroad were linked to investments by Irish firms in other countries in 2019, with 93,000 and 62,000 of these in the US and UK respectively.

Large volumes of Irish FDI flows into countries such as Bermuda, the Netherlands, Switzerland, and Luxembourg, but CSO analysis finds that much of this comes from redomiciled PLCs — firms that have headquartered in Ireland legally but have substantial investments and a significant portion of their operations abroad.

The CSO analysis shows that these firms employed more than 700,000 people in other countries, and recorded a turnover of €128 billion, in 2019.