Ireland’s tax incentives have attracted a high level of foreign direct investment (FDI) into the country, with Dublin receiving more financial services FDI capital than any other city in the eurozone in the past nine years.
In the first 10 months of 2011, Dublin received a record $422.7m of FDI in the financial sector – the highest annual total for any city in the eurozone. The three largest single investments in the eurozone in 2011 went to the Irish capital. The largest – with an estimated value of $120m – was made by US-based global hedge fund administrator HedgeServ, which expanded its operations at its base in Dublin with the addition of 300 new staff.
Paris and Frankfurt have received the second and third most capital between 2003 and 2011. Up until 2009, the French city attracted significantly more capital annually than Frankfurt, but in 2009 this trend was reversed and Frankfurt has received more capital each year since.
In 2011, Amsterdam received both the second largest amount of capital and second largest number of projects. The Dutch capital was the highest ranked in 2010 in terms of both capital and number of projects.
Troubled spots
Of the currently distressed eurozone countries, Spain has received the highest level of foreign investment over the past nine years. Its capital, Madrid, has seen its annual capital inflow decrease since 2008. It received an aggregate $23.7m in 2011, a fraction of the $148.97m received in 2007, its best year for FDI.
Milan, Italy's financial centre, has also seen a decline in its capital inflows since it received its highest recorded annual capital investment in 2009, when $99.2m was invested. The Greek capital Athens has had fluctuating capital inflows over the past few years. It enjoyed its second best year in 2010, when $45m was invested in the financial services sector, but total investments in the first 10 months of 2011 amounted to just half of this. Portugal does not feature in the ranking of top 25 financial centres.
Unsurprisingly, since 2008 the total level of FDI inflows into the eurozone has been in decline. Since peaking at nearly $2.6bn in 2008, total annual investments have declined, and in the first 10 months of 2011 $1.35m was invested.
Note to table: When there is no publicly available figure, capital investments and number of job created are estimations based on average figures for similar types of investments in the financial services sector in a specific country.
