Ireland has emerged as America’s fourth-largest creditor behind China, Japan and the Cayman Islands, after the US government revised the way it reports the figures.

Bloomberg is reporting that US investors in Ireland owned $264.3bn (€233bn) in assets at the end of March – less than $1bn off a record high of $265.1bn in December.

China is the biggest holder of the US bonds, with a $1.24 trillion stake. Japan is next with $1.14
trillion, followed by the Cayman Islands with $265bn.

Irish holdings are bigger than the size of our economy, which is worth about €203bn.

One potential explanation is the large number of fund managers and other companies based here in order to avail of tax incentives.

“It’s all just foreign banks, funds and corporates based here,” said Owen Callan, a fixed-income analyst at Cantor Fitzgerald.

“It’s probably linked to offshore mutual funds administered here or offshore-retained earnings of
US multinationals,” he added.

More than 700 US companies are domiciled in Ireland, employing 140,000 people, according to the American Chamber of Commerce.

Of the $1.62 trillion held by global funds administered here, $337bn is in government bonds including treasuries, data from Bank of Ireland shows.

Ireland’s corporate tax rate is 12.5%, compared with a global average of about 24%, according to audit firm KPMG, while in the US, the rate can be as high as about 40%.