IDA Ireland says investments close to 2019 levels
Foreign direct investments into the country during the first half to the year returned to levels close to those seen at the end of 2019, IDA Ireland said today.
The agency secured 142 investments between January and June, compared to 132 in the same period last year.
62 of those were new name investments, with the remaining 80 from companies already established here.
48% of the investments went to regional locations.
Overall the investments had an associated employment potential of more than 12,530, up from 9,600 in the first half of 2020, bringing the flow back to levels seen between 2015 and 2019.
“Confidence in Ireland remained,” Martin Shanahan, IDA Ireland’s chief executive told RTÉ News.
“I think that is partly to do with how well our infrastructure held up actually during the pandemic. The companies that are operating here have been able to continue operating, whether that is remotely or for manufacturing that is in person,” Mr Shanahan said.
The organisation said recovery in global foreign direct investment flows is underway, after sharp contractions during the height of the Covid-19 pandemic last year.
But a full return to pre-pandemic levels around the world is not expected until next year, with intense competition being experienced, the IDA said.
“These are really encouraging results, showing investment in Ireland has remained remarkably solid despite immense challenges over the past 18 months,” Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar said.
“I’m particularly pleased to see that approximately half of new investments are going to locations outside of Dublin,” he added.
IDA Ireland singled out a number of key international developments including the shift to a green economy, digitalisation and global corporation tax reform.
131 countries have signed up to an OECD deal on global corporation tax reform.
The deal has been backed by the G7 and G20, and would see changes to how it is decided where large companies should pay tax and introduce a global minimum corporation tax rate of at least 15%.
However, Ireland has not yet agreed to the proposals, as it objects to the proposed global minimum tax rate.
The IDA said it will be important that working within any new global tax framework, Ireland continues to offer stability and a competitive offering to investors.
Mr Shanahan said he thinks it is unremarkable that Ireland has not agreed to the new deal so far and it would have been more remarkable if Ireland had moved already given that we don’t yet know what we are moving to exactly.
“It is perfectly legitimate that Ireland would articulate its views and its strongly held views within that global discussion,” Mr Shanahan said.
“Ireland has said it can sign up to many aspects of what is now on the table,” he added.
Speaking on RTÉ’s News at One, Mr Shanahan said Ireland has no difficulty with a minimum tax rate in principle.
“Our 12.5% rate has stood us in good stead and has been consistently important,” he said.
Mr Shanahan added that Ireland is a small country on the western edge of Europe and does not have all the advantages of large countries.
“It is the case that is being made by Government and by Minister Paschal Donohoe that small countries should be able to compete on the area of tax,” he said.
“Of course it isn’t the only area in which we compete,” he added.
He said the investors they are engaged with are monitoring the situation closely, but there is a lot of “road still to be travelled on this”.
“We now have to see what the detailed technical work is,” he said.
“We also have to see can the countries that have proposed this and are signing up to this actually are they able to implement this themselves,” he added.
The IDA chief said only at that point will we know what the impact is on countries and what the impact on individual companies is.
Regarding the potential impact of the shift in how and where people work in the future, Mr Shanahan said there would be new ways of working in the future, with less time spent in the office and more flexible arrangements.
But he said he does not believe it is realistic to think that everybody will be working remotely going forward.
“It is going to be somewhere in between, it is going to be a hybrid model,” he said.
“This will present challenges and it will also present opportunities. The most obvious opportunity being that we may be able to attract investments into regional locations and people within regional locations will be able to benefit from remote working that weren’t able to in the past,” he stated.
He added that if you do not have a centralised office structure, that makes FDI more diffuse and opens up other countries and regions that maybe were not as attractive before.
In relation to criticism of data centres and the pressure they put on the national grid, Mr Shanahan said data centres are an integral part of the computer services sector.
He said ensuring we have the infrastructure and utilities to be able to attract data centres and large energy users in other sectors is hugely important.
He added that right now there are clearly capacity issues on the eastern seaboard and that is why the IDA is trying to attract data centre investment to regional locations.
Mr Shanahan also underlined the importance of Ireland remaining competitive, in areas such as the provision of utilities, around the speed of the planning process and air connectivity, as well as talent provision.