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Revealed: Ireland is the #1 destination for US technology companies’ Foreign Direct Investment

FOR IMMEDIATE RELEASE

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Revealed: Ireland is the #1 destination for US technology companies’ Foreign Direct Investment

Smart MBS, a member of Pearse Trust group, analysed the “Direct Investment by Country and Industry” series by the US Bureau of Economic Analysis to figure out the country with;

A) The most amount of "Tech Investment" from the US

and

B) The ROI that that country gave the US for that investment.

Findings from the reserach revealed that;

  • Ireland is the #1 destination in the world for Foreign Direct Investment by US tech companies.
  • The Return On Investment proves it was an extremely worthwhile business decision. The combined income was $6.4 billion, 28% higher than the next best country.
  • US technology companies averaged a generous return of 11.7% from their business expansion investment in Ireland.
  • Ireland placed 5th in the world for overall US investment across all business sectors, in the amount of $446 billion.
  • The technology was the 5th biggest investor industry, worth only 5% of overall Foreign Direct Investment, in Ireland

The success of the global technology giants Google, Facebook, Microsoft, Intel and others has clearly created a blueprint that the US tech industry has been following.

At present on these shores there are:

  • Nine of the top ten global software companies
  • Nine of the top ten US technology companies
  • The top three enterprise software companies in the world
  • Four of the top five IT services companies

The UK followed in 2nd place with $51.1 billion. However, with Brexit looming large in 2019 it’s highly likely this figure will reduce when they lose their EU privileges.

The Netherlands was a distant third with $33.8 billion.

For those companies that made the decision and backed it with investment to set up in Ireland, they were rewarded handsomely. The average return on investment was a whopping 11.7%, the 5th highest in Europe.

The Irish corporate tax rate of 12.5% is usually one of the first benefits of moving to Ireland people will mention. While it is a huge incentive for establishing a presence here, there are many more attractive features that help seal the deal.

The data has been illustrated in an interactive scatter plot comparing both "Tech Investment" and "Income from Tech" that the US received in the following URL.

https://www.smartmbs.ie/blog/foreign-direct-investment-technology

Please find the full press release attached or online via this google doc, which has all of the findings in addition to a static graphic of the scatter plot and raw data.

You can also access the raw data online here.

Other interesting findings from this study:

  • The UK followed in 2nd place with $51.1 billion. (However, with Brexit looming large in 2019 it’s highly likely this figure will reduce when they lose their EU privileges.)
  • The Netherlands was a distant third with $33.8 billion.

Location

Continent

Tech Investment, $B

Income from Tech Investment, $B

Tech ROI

Ireland

Europe

54.51

6.361

12%

United Kingdom

Europe

51.166

3.451

7%

Netherlands

Europe

33.836

1.687

5%

 

All data was taken from the “Direct Investment by Country and Industry” series by the US Bureau of Economic Analysis. Data only covers countries that were explicitly covered in the data and excludes aggregated totals for groups of countries, e.g. “Other Europe”.

"“Tech Investment” was calculated as the total US direct investment position on a historical-cost basis in two industries: “Manufacturing of Computer & Electronic Products” - a subset of Manufacturing - and “Information”, which includes software publishers and data-related activities."

“Income from Tech Investment” was taken as a total “Direct Investment Income Without Current-Cost Adjustment” for the same two industries.

ROI was calculated as Income from Tech Investment divided by Tech Investment, as per the guidelines laid out in the “Return on FDI” publication by the Irish Central Statistics Office, and expressed as a %.

All figures represent known amounts of investment and income, excluding the amounts that might have been suppressed by the Bureau of Economic Analysis to avoid disclosure of data or the amounts that round to "0". All figures appear in billions USD and cover the year 2017, latest available.

 

Why Ireland?

1 - Long established sector

IBM was the first tech giant to land in Ireland in 1956. Microsoft and Intel came in the 1980s with many more of the biggest names coming in the 1990s and 2000s.

2 – Young, highly qualified workforce

The WEF Global Competitiveness Report for 2016-2017 and the IMD Competitiveness Yearbook for 2017 rank Ireland in the top 10 globally for the quality of the education system.

At present, 30% of students in third level institutions are taking courses in science, technology, engineering and maths (STEM).

3 – EU Membership

One huge advantage to setting up in Ireland is the free trade agreements that comes with our membership to the European Union (EU). This gives companies access to over 500 million potential consumers.

4 - Research, development and innovation

Ireland has several initiatives that help company develop and protect research, development and innovation activities. These include tax credits, intellectual property development tax incentives and centres of excellence.

  1. Corporate Tax

The Irish corporate tax rate of 12.5% is usually one of the first benefits of moving to Ireland people will mention. In addition to the favourable rate Ireland has an extensive tax treaty network with 78 countries including Australia, Canada, China, Republic of Korea, Mexico, Japan, Russia, Saudi Arabia, United Kingdom and of course the European Union. These treaties help secure a reduction or, in some cases, a total elimination of withholding tax on dividends, royalties and interest.

+++ENDS+++

Notes to the Editors

Media Information

 

For more information, contact our Gus Ryan at gus@wolfgangdigital.com

If your enquiry is time-critical, please write 'URGENT' in your email subject line.

If you would like a ring-back, please remember to include your telephone number.

The full data set is available to view via this google sheet link.

About Smart MBS

With over 30 years’ experience in the Irish and international corporate sector, Smart MBS is ideally placed to help you create an Irish presence for your business.

They can provide everything specific to your business requirements and create a tailored solution just for you.

Smart MBS cover everything from logistical, legal, personnel and financial services required to establish your new international location at a pre-agreed cost.

Smart MBS can offer your company a complete range of services that allow you to concentrate on your business and make it easy to expand internationally.


Ireland is the #1 destination for US technology companies’ Foreign Direct Investment

Ireland has been revealed as the #1 destination for US technology companies’ Foreign Direct Investment analysis of the “Direct Investment by Country and Industry” series by the US Bureau of Economic Analysis.