| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy

Finfacts changes from 2015


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Global Cost of Living

Irish Tax - Income/Corporate




Content Management by interactivetools.com.

News : Irish Economy Last Updated: Feb 15, 2015 - 6:29 AM

FDI 2008- 2012: Netherlands, Luxembourg, Ireland data require caution; Irish FDI jobs fall
By Michael Hennigan, Finfacts founder and editor
Oct 5, 2013 - 10:32 AM

Email this article
 Printer friendly page

Swirling clouds of blue and green lit the Atlantic Ocean west of Ireland on June 2, 2006, when the Moderate Resolution Imaging Spectroradiometer (MODIS) on NASA’s Aqua satellite captured this image. The ocean is normally black in true-color, photo-like satellite images such as this one, but a large phytoplankton bloom lent the water its brilliant blue and green hues. Phytoplankton are microscopic plants that grow in the sunlit surface waters of the ocean. When enough of the plants grow in one place, the bloom can be seen from space.

FDI 2008- 2012: At the end of 2012, the Netherlands and Luxembourg had booked FDI (foreign direct investment) of $5.8tn by the end of 2012 - - more than the US, UK and Germany combined - - according to data [pdf] from the Organisation for Economic Cooperation and Development OECD). Ireland's outward investment value more than doubled between 2008 and 2012, growing from $169bn to $356bn during a period of deep recession. While jobs in American firms in Ireland rose since 2007, overall jobs in foreign firms fell.

Last month when Bono, the lead singer of U2, the Irish rock group, had appealed to oil companies and other resources groups for transparency on payments to governments in Africa, we suggested that many of these companies avail of Dutch tax haven facilities just like U2.

The Dutch government has announced a number of reforms including renegotiation of tax treaties with developing countries.

The Netherlands had FDI stock of $3.5tn by the end of last year with stocks of $3.5tn, though just $573bn ended up in the “real” Dutch economy while Luxembourg had booked $2.28tn in FDI, while just $122bn entered the real economy.

Most of the FDI in the two countries is routed through special purpose entities and holding companies owned by foreign entities, with the purpose of avoiding tax.

For example, in 2012, the Netherlands had an outward stock of $4.3tn at the end of 2012. The country hosts 23,000 foreign-owned letter-box companies.

Data for Ireland published on Friday [pdf] by the Central Statistic Office (CSO) show the value of inward investment stock at €258bn ($318bn) and outward stock at €288bn ($356bn).

The OECD's data for outward stock is in line with the CSO's but the OECD's value on inward stock is $30bn less at $298bn.

The CSO said on outward investment: "The rise between the end of 2011 and the end of 2012 was mainly due to increased investment in enterprises located in Central American Offshore countries (€13bn) and enterprises located in Europe (€10bn) mainly the Netherlands and Luxembourg (€5bn respectively)"

These 'investments' in Cayman Islands, Bermuda and in two of Europe's key countries for tax haven activities, likely reflect activities of foreign-owned companies that are technically Irish because of the location of headquarters in Ireland.

On Irish inflows, 73% of the total of €30bn relates to retained earnings, which includes cash that is technically retained outside the US either in the overseas branches of US banks and in some cases actually in the US.

So a total of €30bn does not mean that this amount is like a typical business investment.

As we noted during the week, the American Chamber of Commerce in Ireland claim that "in the past half decade, US firms have invested more capital in Ireland than in the previous half century" was misleading as most of the Irish FDI related data - - inflows, outflows, profitability, sales revenues, exports -- are all highly impacted by tax avoidance strategies, which the chamber ignored.

On key metric is employment: while full-time permanent jobs rose by 3,300 in American firms in Ireland in the period 2008-2012, overall in the foreign-owned sector job numbers were down 3,700.

SEE Finfacts articles:

Top 5 US tech firms held $515bn in cash at end June 2013 - - over $100bn of Apple's $147bn cash hoard is estimated to be 'overseas' (even though part of it is in banks in the US, according to the US Senate Permanent Subcommitte on Investigations last May)

US Chamber's investment data into Ireland misleading; 3,300 jobs added since 2007

US company profits per Irish employee at $970,000; Tax paid in Ireland at $25,000

Related Articles

© Copyright 2015 by Finfacts.ie

Top of Page

Irish Economy
Latest Headlines
Finfacts launches new news site
Irish Farmers & Milk Prices: 'Shackles' off in April; Demanding safety-net in August
Irish pension managed funds returns at over 12% year-to-date in 2015
Irish chartered accountants' salary packages surge 13% in 12 months
Irish services PMI fastest rate since late 2006; Official data up only 2.4% in 12 months
Irish Economy: Tax €893m above target in year to July — €653m from corporation tax
Fact and Fiction: Time to review Ireland's economic statistics?
Irish M&A deals H1 2015: Dutch or UK firm acquires Irish firm for €32.6bn - they are both American
Irish manufacturing PMI strong in July
Irish Economy: Fall in GNP in Q1 2015; GDP rises
Irish Economy 2015: Central Bank lauds strong recovery; Time to start paying down debt
Irish Budget 2016: Ibec demands 20 tax cuts, spending and investment rises
Low pay in Ireland; Lowest social security & corporate taxes in Europe
Ireland vs Greece: Enda Kenny's false claims on growth, taxes and debt
Irish standard of living in 2014 below Euro Area average, Italian level; Prices 5th highest in EU28
Irish goods exports rose a record 30% in April - due to fake tax-related transactions
Mexican tall ship to sail into Dublin on June 17th
Irish industrial production up 20% in first four months of 2015; Construction down 2.6% in first quarter
Irish Economy 2015: ESRI slams return to boom-time pro-cyclical fiscal policy
Irish pension fund returns in average range 1.6% - 1.8% in May 2015
Irish service sector PMI remains strong; Tax avoidance clouds data
Ireland: Official unemployment rate at 9.8% in May; Broad rate at 19% — 440,000 people
Ireland: Fiscal Council warns of dodgy forecasts, no plan; OECD warns of new property bubble
Irish Public Finances: Tax revenue in first five months of 2015 €734m ahead of target
No simple measure of economic progress in Ireland: GDP & GNP defective
Irish manufacturing PMI rises in May; Production up unbelievable 45% in year to March!
ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
Ireland at 16 in international competitiveness ranking; US, Singapore and Hong Kong on top
Irish Economy 2015: Sectors to add 200,000 jobs?; Broad jobless rate at 19%
Irish Export Performance: Myths and reality - Ireland is a poor exporter
Irish Economy: 41,300 jobs added in 12 months to Q1 2015 - Construction up 19,600
China-Ireland: Economic relationship on a slow burn
Estonia, Austria, France, Ireland head global alcohol rankings
Irish Exchequer Returns: Tax receipts under target in April but ahead in year
Irish service sector PMI rose in April
Irish manufacturing PMI remained strong in April- includes overseas manufacturing
Irish Live Register + 90,000 activation scheme numbers at 439,000 in April
Ireland: Coalition drops 2018 full-employment target
Ireland Spring Statement: Noonan promises 200,000 net new jobs by 2018
Irish Economy 2015: Retail sales volume up 1.4% in month of March