Global foreign direct investment (FDI) flows increased by 6% to $1.6tn in 2025, following two years of decline. Excluding flows through European financial centres and conduit economies, growth stood at 4%, according to the UN Trade and Development’s (UNCTAD) World Investment Report 2026.
While the upswing is a welcome change of pace after two years of a declining FDI outlook, the growth is heavily concentrated in a few industries and locations. It also reflects a shift in investment priorities, as attraction strategies are increasingly defined by an uncertain geopolitical landscape.
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Where is the growth?
The biggest beneficiaries of FDI growth in 2025 were developed countries, where inflows grew from $649bn in 2024 to $723bn in 2025.
FDI inflows to high-income countries grew by 8.75%, from $1.03tn in 2024 to $1.12tn in 2025. Upper middle-income countries saw much more subdued growth at around 2%, going from $337bn in 2024 to $345bn in 2025. Lower-middle income countries and less economically developed countries, on the other hand, both experienced decreases.
These trends reflect the concentrated nature of global growth as the world’s top 20 host economies received more than 80% of global inflows, with the US receiving the most at $277bn. After the US, the biggest recipients of FDI were Singapore, Hong Kong, China, Brazil, the UK, Germany, Canada, the United Arab Emirates (UAE) and Mexico, in consecutive order.
The biggest source economy was also the US, followed by Japan, China, Luxembourg, Hong Kong, Singapore, Germany, the UK, the UAE and the Netherlands, consecutively. The UK had the biggest jump in terms of its FDI outflows from 2024 to 2025.
The report notes that most of the FDI growth in 2025 was led by flows in Europe, which rose by 39% to $285bn, partly because of the role of financial centres and conduit economies.
What sectors?
The report finds that while a set of strategic industries are experiencing an investment boom, greenfield investment in sectors that fall outside these categories is in decline.
For developed economies, strategic sectors are those that contribute to technological leadership and national security. These include AI infrastructure and related technologies, advanced and sensitive technologies, critical minerals, energy-transition technologies and services, and semiconductors.
These sectors’ share of global greenfield investment has increased significantly in the past few years, from 16% in 2020 to 44% in 2025. In terms of value, AI infrastructure and AI-related technologies make up most of that share, followed by semiconductors, which have experienced the fastest growth. The US is the biggest source of this investment and the EU is the main destination.
Some industries that fall outside of these sectors and have experienced significant declines in investment include renewable energy, infrastructure (except data centres) and global value chain-intensive industries. Diminishing interest in these industries may come from a wave of restructuring of global supply chains to make these more resilient and reduce exposure to tariff changes.
Notably, the report highlights that despite expectations that tariffs and protectionism would increase nearshoring, this has not “increased consistently across regions”. While there are changes in supply chain structures, it finds that “current reconfiguration trends do not suggest a widespread move towards regionalised investment patterns”.
Government expands its role as an investor
Investors with a stake in strategic sectors have taken on a greater protagonism in the global FDI landscape. Non-financial multinational enterprises (MNEs) in sectors considered strategically important domestically are expanding. Tech and pharma MNEs expanded their foreign assets by more than 10% in 2025, for example.
Government-owned MNEs are also expanding their influence, and made up more than a quarter of the top 100 MNEs in 2025 and half of the leading companies in developing countries.
Cross-border private equity investments and deals have also expanded over the past ten years, peaking in 2021.
