Foreign Direct Investment in Ireland 2019

Scope

This publication was produced by the Central Statistics Office in order to provide more information to the user regarding the impact which Foreign Direct Investment (FDI) has in Ireland. The data in this publication was sourced via International Accounts Survey data, Business Register data, and administrative data such as the P35L data set.

Methodology

The Return on Foreign Direct Investment

This section makes use of published FDI data to impute a return on FDI. The return on FDI is defined as: 

This definition differs slightly from the definition offered in the OECD Benchmark Definition of Foreign Direct Investment, 4^th Edition (BMD4) in that it includes debt income as part of FDI income. This departure from the prescribed definition was made in order to ensure confidentiality protection. In addition, the income on debt is small relative to the income on equity, only marginally affecting the returns.

Foreign Direct Investment Associated Employment Statistics

Revenue’s P35L

Employees in this publication are persons who are paid a fixed wage or salary. Employees are calculated using an annual employment return received from Revenue. This return contains all registered employers and the number of employees they have paid a wage or salary for a reference year. The file can contain individuals paid a wage by an employer as well as self-employed individuals who pay themselves a working wage. An individual may be counted more than once for a reference year if they work multiple jobs in that reference year. The annual employment return from Revenue contains persons at work or temporarily absent because of illness, holidays, strike etc. If an individual is paid a wage for any segment of a reference year they are included in the overall figures.

Firm Classification

Firms described as domestic or Irish are those which have ultimate ownership in Ireland i.e. the majority stake of the parent company is owned by Irish investor(s).

FDI firms or multinational enterprises (MNEs) refer to firms which have ultimate ownership outside of Ireland.

Irish MNEs, where mentioned, refer to Irish firms which have large scale operations in other countries or rely heavily on export markets while having ultimate ownership in Ireland.

Redomiciled PLC refers to firms which have relocated to Ireland despite the majority of their global operations being in other countries. 

Native Irish firms refers to firms which have originated or have the majority of their operations in Ireland. 

Greenfield Foreign Direct Investment

This disaggregation of FDI in Ireland was created by separating FDI by firm and subsidiary and by the year in which that firm or subsidiary was birthed on CSO data collection records. The value of Greenfield FDI, for the purposes of this publication, is defined as the portion of new FDI arising as a result of the birth of these subsidiaries in that same year of birth and two subsequent years in line with Eurostat guidance.  

The separation of narrow and broad Greenfield refers to a methodological distinction. Narrow Greenfield is as described in the paragraph above. Broad Greenfield includes: FDI equity transactions in enterprises that are no more than 3 years old and any follow-up direct investment transactions in existing foreign direct enterprises that are used to acquire fixed assets. Modified Greenfield is then the broad figure stripped of globalisation effects (intangible assets such as intellectual property for example).

Definitions

Ultimate Controlling Parent 

The enterprise at the top of the ownership chain i.e. not controlled by any other entity. The geographical location of the ultimate source of control of the stocks of inward FDI for a reporting economy is used in this publication to present inward FDI, employment and average wages by ultimate ownership of the foreign affiliate.

Immediate Parent 

The parent influencing or directly controlling a direct investment enterprise. This presentation is used to present the return on FDI in chapter two of this publication.

NACE Rev.2 Classification

The economic sector classification used in this publication is based on the ‘Statistical Classification of Economic Activities in the European Community (NACE Rev.2)’ which can be accessed on the Eurostat website. The NACE code of each enterprise included in the survey was determined from the predominant activity of the enterprise, based on information provided to the CSO.

Affiliated Enterprises

Affiliated enterprises are enterprises in a direct investment relationship. Thus, a given direct investor, its direct investors, its subsidiaries, its associates, and its branches, including all fellow enterprises, are affiliated enterprises. It is possible for a given enterprise to be a member of two or more groups of affiliated enterprises. 

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