Direct investment from Ireland exceeded foreign direct investment last year

Investment by Ireland-based companies in the rest of the world grew twice as fast as foreign direct investment in the country in 2021.

The stock of foreign direct investment in Ireland – the total value of assets held here by foreign companies – rose by 109 billion euros to 1.2 trillion euros in 2021, the Central Statistics Office said on Friday.

The foreign investments of the local companies increased by 296 billion euros to almost 1.3 trillion euros.

Inward investment from Ireland is distorted by companies that have their headquarters or parent company here but have most of their financial interests and activities overseas.

CSO data shows that 62 billion euros worth of Irish foreign investment could result from ex-US companies relocating their headquarters to Ireland.

It is a tax strategy known as “inversion” in which a corporation is restructured by exchanging the domestic parent company for a foreign one.

Most of the outbound investment by businesses in Ireland – almost €1 trillion out of a total of €1.3 trillion – has been in the services sector.

In terms of flows – the value of all transactions undertaken rather than the ultimate value of assets held – Irish investment abroad was mainly in the financial and insurance sectors.

The most notable investments by Irish-based companies came late last year in the EU’s largest financial centre, Luxembourg, with shares worth €494 billion. A significant amount (€282 billion) also flowed into the USA.

The CSO data also shows that the US is the ultimate destination for many investments entering Ireland via offshore centers or the EU.

The largest ‘immediate’ investments in Ireland late last year came from the US (€423bn) and offshore centers (€315.2bn).

But “ultimate” investments from the US have been shown to have reached €913 billion, more than twice as much as “direct” investments.

“This difference indicates that while a large proportion of investment in Ireland comes directly from our European peers, this investment comes from US-based companies,” the CSO said. Direct investment from Ireland exceeded foreign direct investment last year

Fry Electronics Team

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