As investment climate tightens, strong US ties and innovation focus sustain Ireland’s appeal.
Ireland has reinforced its standing as one of Europe’s leading destinations for foreign direct investment, maintaining steady project levels and securing a top ten ranking for investor attractiveness as the continent experiences a prolonged decline in inbound investment.
The latest EY European Attractiveness Survey shows that Ireland attracted 75 FDI projects in 2025, unchanged from the previous year. This performance places the country 15th overall in Europe, an improvement of two positions, while it ranks tenth when measured on a per capita basis. Investor sentiment toward Ireland remains positive, with the country also placed tenth for overall attractiveness heading into 2026.
“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”
The findings come at a time when FDI across Europe has fallen to its lowest level in a decade. Total projects dropped 7% year on year in 2025, with just over 5,000 recorded across the continent, well below pre-pandemic levels.
Transatlantic investment relationship
A defining feature of Ireland’s performance continues to be its strong transatlantic investment relationship. US companies accounted for 53% of all FDI into Ireland last year, significantly ahead of the European average of 19%. Investment was also geographically dispersed, with 41% of projects located outside Dublin, reflecting a broader regional footprint.
Feargal de Freine, EY Ireland Partner and Head of FDI, said Ireland’s ability to sustain investment levels in a challenging environment reflects underlying strengths in key sectors.
“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,” he said. “Our performances in software and research and development in particular highlight our enduring advantage in these fields, while Ireland was also rated highly as a location for AI investment, innovation and deployment.”
Technology-led investment continues to anchor Ireland’s appeal. Software and IT services emerged as the leading sector in 2025, with 33 projects, more than doubling year on year and accounting for over 40% of total FDI. Business services and financial services followed as the next largest sectors, with 14 and nine projects respectively.
The report also highlights Ireland’s strong position as an innovation hub. Research and development projects made up a quarter of all inbound investment, far exceeding the European average of 7%. This reflects a sustained emphasis on high-value, knowledge-driven activity, supported in part by policy measures such as the R&D tax credit.
Carol Murphy, EY Ireland Partner and Head of Markets, said the strength of US investment underpins Ireland’s strategic position within the global economy.
“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,” she said. “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.”
While the outlook for Ireland remains positive, the survey identifies several factors that could influence future competitiveness. Infrastructure constraints have emerged as the most significant concern among investors, rising sharply in importance compared with previous years. Costs related to energy, labour and other inputs were also cited as ongoing challenges.
Across Europe, the data points to a shifting investment landscape. Traditional FDI strongholds saw notable declines in 2025, with France, the UK and Germany recording drops of 17%, 14% and 10% respectively. At the same time, growth is increasingly concentrated in emerging regions. Countries such as Poland and Spain posted gains, alongside strong performances in select regional hubs including Greater Lisbon and Catalonia.
Sectoral trends also reveal changing priorities among global investors. Defence-related investment rose sharply, with an 84% increase in projects and significant job creation. Low carbon energy continued to attract capital, with a 25% increase in investment, reinforcing Europe’s role in the green transition.
In contrast, some of Europe’s traditional industrial sectors experienced declining investment levels, including healthcare manufacturing, chemicals and automotive. These trends reflect broader structural challenges, including rising costs and intensifying international competition.
Despite the overall contraction in project numbers, investor intentions remain relatively resilient. More than half of business leaders surveyed indicated plans to establish or expand operations in Europe in the coming year, signalling continued confidence in the region’s long-term prospects.
For Ireland, the ability to maintain momentum in a subdued environment highlights the importance of its established strengths in technology, innovation and international connectivity. The challenge ahead will be to address structural pressures while continuing to attract high-value investment in an evolving global landscape.
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