Ireland in Europe’s Top 10 for FDI attractiveness

Ireland remains an attractive location for foreign direct investment (FDI) with investor sentiment positive and overall investment here holding steady even as Europe continues a multi-year decline in inbound investment. That’s according to the EY European Attractiveness Survey, which tracks cross-border investment projects resulting in new facilities and job creation across the continent.

FDI attractiveness

Ireland attracted 75 FDI projects in 2025, matching 2024 levels. This places it 15th overall in Europe, up two places from last year, and tenth on a per-population basis. United States investment made up more than half (53%) of inbound FDI to Ireland, consistent with historical levels and considerably higher than the 19% average held by US FDI across Europe. The regional profile was balanced, with 41% of projects in locations outside of Dublin.

Ireland ranked tenth in Europe by investors in terms of FDI attractiveness for 2026, with investors pointing to a range of factors that make Ireland an attractive location for future FDI investment. These include our EU location and the access to new markets and customers this brings, competitive tax policy – most notably the R&D tax credit, talent, language and cultural ties to North America in particular.

In contrast, inward investment for Europe fell to a ten-year low in 2025, with a 7% drop in projects when compared to 2024. Total projects across the continent in 2025 (5,023) were 22% lower than the 2019 pre-pandemic level (6,412). While the number of projects from US investors in Europe stabilised during 2025, it remains 38% below its 2019 peak. This is driven by industrial policy decisions by successive US administrations, as well as perceptions by investors of weaker growth prospects, regulatory complexity, higher operating costs and policy fragmentation.

Software and IT services (33) was Ireland’s leading FDI sector during 2025, with the number of projects doubling versus 2024, and the sector accounted for more than 40% of the year’s total. Business services (14) and financial services (9) projects were the next two largest FDI sectors in Ireland.

A key highlight of the research is the strength of the Irish innovation economy. Research and development projects (R&D) accounted for 25% of Irish investments, far ahead of the total European share of 7%.  This confirms Ireland’s position as a leading knowledge economy with a strong capacity to attract innovation-driven investment and supported by an internationally competitive R&D tax credit regime. Ireland was also rated highly as a location for AI investment, innovation and deployment.

However, the research also identified risks to Ireland’s future attractiveness. Ireland is perceived as having challenges in terms of infrastructure, and the cost of energy, labour and other inputs. Infrastructure constraints was the top-rated risk affecting Ireland’s future attractiveness, rising from sixth in the previous year’s survey.

EY Ireland Partner and Head of FDI Feargal de Freine said: “In what was another challenging year for FDI in Europe, holding our own is a strong outcome for Ireland as is the continued strength of investor sentiment towards Ireland. Our performances in software and R&D in particular highlight our enduring advantage in these fields, while Ireland was also rated highly as a location for AI investment, innovation and deployment.

However, the broader European trend points towards a structural shift in global FDI investment that has been underway for several years now, as countries utilise industrial policy to aggressively court investment. Events over the past 12 to 18 months have accelerated this agenda, and businesses and policymakers are seeking to navigate disruption across a range of fields simultaneously, including geopolitical risk, economic shock and technological disruption.

Carol Murphy, EY Ireland Partner and Head of Markets said:

“It is encouraging to see Ireland continuing to secure a disproportionately strong share of investment from the United States, underscoring the depth and resilience of this strategically important transatlantic partnership even amid geopolitical uncertainty. As a trusted gateway to Europe, Ireland is uniquely positioned to both sustain this investment and play a pivotal role in strengthening the wider US–EU economic relationship.

It’s also very positive to see a broad regional spread of investment, reinforcing our competitiveness as a location of choice for inbound investment right across the country.”

European Outlook: FDI falls in traditional destinations, new pockets of growth emerge

Europe remains a competitive destination as new centres of growth are emerging across Southern, Central and Eastern Europe, supported by competitive labour costs, available industrial land, ongoing infrastructure investment and expanding digital ecosystems.

Poland and Spain posted FDI increases of 10% and 7%, with Turkey recording a 20% increase.  At the same time, individual regions are emerging as areas of growth, including Greater Lisbon and Catalonia, where FDI rose by 11% and 2% respectively.

Europe’s top investment destinations saw FDI decline in 2025, with France down 17%, the UK down 14% and Germany down 10%.  Investment from the US, historically the largest single-country investor in Europe, remained stable; however, Germany’s role as an investor in other European countries also weakened significantly, falling 28%.

While investment intentions have eased from recent peaks (59% in 2025 and 72% in 2024), 54% of leaders still plan to establish or expand operations in Europe over the coming year. This is above 2022 (53%) and 2021 (40%) levels signalling continued underlying confidence.

The number of defence-related FDI projects in Europe increased 84%, responsible for almost 7,000 new jobs, and was strongest in the UK, France and Ukraine.  FDI in the low?carbon energy sector increased by 25% in 2025, reinforcing Europe’s attractiveness as a leading destination for green investment. However, foreign investment declined in parts of Europe’s core industrial sectors in 2025, reflecting persistent structural issues, rising production costs, high energy prices and intensifying global competition. Healthcare manufacturing projects declined by 28%, chemicals fell 19% and automotive projects fell 11%.

EY Ireland will publish a more detailed analysis of global investor sentiment towards Ireland and Europe next month.

The EY European Investment Monitor (EIM)

Our evaluation of FDI in Europe is based on the EY European Investment Monitor (EIM). This proprietary database helps us to track projects announced in 2025 across 47 countries, including Ireland. The database tracks the FDI projects that have resulted in the creation or the expansion of facilities and jobs.

The EY EIM database focuses on investment announcements, the number of new jobs created and, where identifiable, the associated capital investment. Projects are identified through the daily monitoring of more than 10,000 news sources. The EY EIM database shows the reality of investment in manufacturing and services by foreign companies across the continent.

The following categories of investment projects are excluded from the EY EIM: M&A and joint ventures (unless these result in new facilities or new jobs being created); license agreements; retail and leisure facilities; hotels and real estate; utilities; extraction activities; portfolio investments (pensions, insurance and financial funds); factory and other production replacement investments; and nonprofit organizations.

This perception study examined Europe’s perceived attractiveness via an anonymous online survey of international decision-makers. We define attractiveness of a location as a combination of image, investor confidence and the perception of a category or area’s ability to provide the most competitive benefits for FDI.

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