Foreign direct investment (FDI) in Ireland

FDI in Figures

the U.S. (39.6%), offshore financial centres (15.3%), the Netherlands (11.6%), and Switzerland (7.1%). Overall, the EU accounts for 23% of the stock. The services sector is the largest for inward investment in Ireland, with the investment position reaching EUR 851 billion at the end of 2023, an increase of EUR 14.9 billion from the end of 2022. Investment in financial intermediation grew from EUR 368 billion to EUR 384 billion, while investment in information and communication fell from EUR 201 billion to EUR 189 billion. Investment in the manufacturing sector declined by EUR 65.7 billion, reaching a stock position of EUR 447 billion. According to the latest figures from the OECD, FDI inflows into Ireland were negative by USD 25 billion in the first semester of 2024.

The Irish government actively promotes FDI and has had considerable success in attracting investment. One of Ireland’s many attractive features as an FDI destination is its favourable 12.5% corporate tax, the second-lowest in the European Union. Other reasons to invest in Ireland include the high quality and flexibility of the English-speaking workforce; the availability of a multilingual labour force; cooperative labour relations; political stability; and pro-business government policies and regulators. Additional positive features include a transparent judicial system; extensive transportation links; and proximity to the United States and Europe. Conversely, Ireland faces challenges in its efforts to attract investment, including relatively high labour and operating costs, particularly in energy. Skilled labour shortages pose another obstacle, along with a slow and burdensome planning permit system and concerns about eurozone risk. Infrastructure deficiencies, such as those in transportation, affordable housing, energy, and broadband internet, also dampen its attractiveness. The Screening of Third Country Transactions Act 2023 (the "STCT Act") was enacted into law on October 31, 2023, ushering in a new investment screening framework in Ireland. The act came into effect on 6 January 2025, granting the Minister for Enterprise, Trade and Employment authority to examine, impose conditions on, and potentially block FDI transactions across various scenarios, contingent upon security and public order considerations. Ireland’s good investment environment is confirmed by the fact that it ranks 22nd among the 132 economies on the Global Innovation Index 2023 and 3rd out of 184 countries on the latest Index of Economic Freedom.

What to consider if you invest in Ireland

Strong Points

Ireland's strong points include:

• Flexible labour and goods markets
• Favourable business environment, attractive taxation
• Presence of multinational companies, particularly from the United States
• Presence (through multinationals) in sectors with high value added, including pharmaceuticals, IT and medical equipment

Weak Points

Ireland's weak points in term of FDI attractiveness include:

• Small open economy; dependent on the economic situation, tariff and tax regimes of the United States and Europe
• Vulnerable to corporate strategy changes and activity of foreign companies
• Structurally a lack of housing and infrastructure to support recent population growth
• Private corporate debt and financial sector's debt level still high and vulnerable to shocks

Government Measures to Motivate or Restrict FDI

For years, the Irish Government has actively promoted foreign direct investment (FDI). Ireland provides an attractive taxation framework for foreign investors and has one of the lowest taxation rates in the European Union. This strategy has fuelled 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. The United Kingdom’s departure from the EU (Brexit) leaves Ireland as the only remaining English-speaking country in the EU, an asset for the country.

Several state organisations promote investment inflows:

• The Industrial Development Authority of Ireland (IDA)
• Enterprise Ireland
• Udaras na Gaeltachta

The Irish government provides aid grants through its investment organizations, which will only pay grant aid after the foreign investors have achieved externally audited performance targets.

The government has invested heavily in ambitious programs to attract the best researchers specialised in business. Science Foundation Ireland (SFI) is the state science agency that has been responsible for administering Ireland’s R&D funding.
In the same vein, by investing in the entrepreneurial ecosystem, the state seeks to attract entrepreneurs to Ireland who wish to create start-ups with a strong international orientation.

Bilateral investment conventions signed by Ireland

To see the list of investment treaties signed by Ireland, consult UNCTAD's International Investment Agreements Navigator.