To stimulate economic expansion, the Industrial Development Authority encourages and facilitates investment by foreign interests, particularly in the development of industries with export potential. Special concessions include nonrepayable grants to help establish industries in underdeveloped areas and tax relief on export profits. Freedom to take out profits is unimpaired. Engineering goods, computers, electronic products, electrical equipment, pharmaceuticals and chemicals, textiles, foodstuffs, leisure products, and metal and plastic products are among the items produced. Much of the new investment has occurred since Ireland became a member of the European Union.
Annual foreign direct investment (FDI) inflows into Ireland increased steadily through the 1990s. In the period 1988 to 1990, Ireland's share of world FDI inflows was only 70% of its share of world GDP, but for the period 1998 to 2000, Ireland's share of FDI inflows was over five times its share of world GDP. In 1998, annual FDI inflow reached $11 billion, up from $2.7 billion in 1997, and then jumped to almost $15 billion in 1999. FDI inflows to Ireland peaked in 2000, at over $24 billion, mainly from high-tech computer and pharmaceutical companies. FDI inflow dropped sharply to $9.8 billion in 2001 with the burst of the dot.com bubble and the global economic slowdown.
Leading sources of foreign investors in terms of percent of foreign companies invested in Ireland have been the United States (43%), the United Kingdom (13%), Germany (13%), other European countries (22%), Japan (4%), and others (5%). As of 2000, the primary destinations of foreign investment have been, in order, manufacturing, finance, and other services.