Ireland climbed two places to 15th in Europe last year in terms of attractiveness for foreign direct investment (FDI), according to a new study by EY.The group’s European Attractiveness Survey, which tracks cross-border investment projects that result in new facilities and job creation, described investor sentiment here as “positive” and overall investment as “holding steady” even as Europe continued a multiyear decline.Ireland attracted 75 FDI projects in 2025, matching 2024 levels. That placed it 15th overall in Europe, up two places from last year and 10th on a per-population basis. Investment from the United States made up 53 per cent of inbound FDI to Ireland, consistent with historical levels and considerably higher than the 19 per cent average held by US FDI across Europe.The regional profile was balanced, with 41 per cent of projects in locations outside of Dublin.Ireland was ranked 10th in Europe by investors in terms of FDI attractiveness for 2026, as investors pointed to a range of factors that make Ireland an attractive location. These included the nation’s EU location, access to new markets and customers, as well as a “competitive tax policy”, the research and development tax credit, talent, language and cultural ties to North America.In contrast, inward investment for Europe fell to a 10-year low in 2025, with a 7 per cent drop in projects when compared to 2024. Total projects across the Continent (5,023) were 22 per cent lower than the 2019 pre-pandemic level (6,412).While the number of projects from US investors in Europe stabilised during 2025, it remained 38 per cent below its 2019 peak.[ Foreign direct investment into Ireland hits record level despite US tariffs, says IDAOpens in new window ]“This was 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,” the report said.Software and IT services was Ireland’s leading FDI sector during 2025, after the number of projects doubled in the year, while the sector accounted for more than 40 per cent of the year’s total. Business services and financial services projects were the next two largest sectors.The report highlighted the strength of the Irish innovation economy as a key factor. Research and development projects accounted for 25 per cent of Irish investments, far ahead of the total European share of 7 per cent.“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 research and development tax credit regime,” it said.Ireland was also rated highly as a location for investment, innovation and deployment in artificial intelligence.[ IDA Ireland bought nine sites for foreign companies for €32.9m in 2025Opens in new window ]However, the research also identified risks to Ireland’s future attractiveness. Ireland was perceived as having challenges in terms of infrastructure, as well as 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.Carol Murphy, EY Ireland partner and head of markets, said it was “encouraging to see Ireland continuing to secure a disproportionately strong share of investment from the United States ... 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,” she added.Feargal de Freine, EY Ireland partner and head of FDI, 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 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.”