The contribution of Foreign Direct Investment (FDI) to the Irish economy is far reaching and it is estimated that 20% of all private sector employment in the State is directly or indirectly attributable to FDI. It also contributes significant taxation revenue to the Exchequer, generates other commercial activity across the economy and helps to drive investment in research and innovation.
IDA Ireland is the State’s inward investment promotion agency that is tasked with growing and sustaining FDI in Ireland. It achieves this by partnering with potential and existing investors to help them establish or expand their operations here. It also provides a range of supports, including grant assistance, to its client companies.
Ireland’s FDI Policy
Ireland’s ability to attract and retain FDI is the result of a number of factors and consistent policy-making by the Government over many decades. At the heart of this approach has been openness to global markets, investment in education and skills, membership of the European Union, a competitive, consistent and transparent corporate tax regime and the creation of an environment where people want to live and work.
Within an increasingly competitive global environment, Government is constantly monitoring and improving Ireland’s attractiveness to FDI, focusing on the following key areas:
- Talent
Ireland is renowned for developing and nurturing talent and is an attractive destination for internationally mobile, highly skilled people. Ireland’s education system is among the best in the world, with a high percentage of 30-34 year olds holding a third level qualification, while Ireland currently ranks 1st globally for attracting and retaining international talent. As a result, Ireland has a highly capable, educated and skilled workforce and the Government continues to work to ensure Ireland can respond to future labour market skills needs.
- Pro-enterprise policy and attractive business environment
Ireland’s stable pro-enterprise policy environment, membership of the European Union and Eurozone, technology infrastructure, research and development ecosystem and competitive corporation tax regime support its strong reputation as a great place to do business. In addition, Ireland’s talented and flexible workforce and track record as a successful home to global businesses strengthens its attractiveness for FDI.
- Connected world leading research
Ireland is one of the leading Research, Development and Innovation (RDI) locations in the world. Ireland’s national innovation system enables collaboration between industry, academia, state agencies and regulatory authorities. Irish research and training centres act as beacons that attract prospective FDI and provide a capacity for applied research, supporting firms to develop innovative products and services. Additionally, R&D tax credits support companies to undertake new or additional RDI activity in Ireland.
FDI in Ireland today
FDI has been, and will continue to be, hugely important to the Irish economy. IDA Ireland’s strategy, ‘Driving Recovery and Sustainable Growth’, for the period 2021-2024 is built on the pillars of Growth, Transformation, Regions, Sustainability and Impact and sets out the key targets that the Agency is working towards in order to sustain and grow investment by overseas companies in the next number of years.
While Ireland continues to benefit from FDI, there is a clear focus on ensuring its advantages are spread more evenly across the country. IDA Ireland and the Government have placed a particular emphasis on growing investment in the regions, with regional development at the centre of the IDA’s strategy. This entails new regional investment targets in addition to developing clusters of investment within regions to sustain and attract more overseas companies from particular industries.
At present, Ireland is home to over 1,600 overseas company operations that directly employ over 250,000 people. The country continues to attract businesses from sectors such as ICT, life sciences, financial services, engineering and business services. Many of these companies undertake strategic activities here such as advanced manufacturing and research and development. Ireland’s success when it comes to FDI is partly reflected by the number of the world’s leading companies who have established operations here.