Foreign direct investment (FDI) into Germany rose 50% year on year to approximately €86bn ($99.75bn) in 2025, recovering from a sharp 32% decline in 2024, according to an analysis released by the German Economic Institute (IW) based on central bank Deutsche Bundesbank transaction data.
A sharp pivot in capital origins underpinned the rebound.
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Inflows from the UK surged 284% to €26bn, establishing British enterprises as the single largest foreign investor group in Germany with a 31% share of total inbound FDI.
This surge offset a steep retrenchment by US corporations, whose German investments fell 44% to €11.8bn, reducing the US share of inbound capital from over 36% to approximately 14%.
German Economic Institute researcher Samina Sultan said: “While US companies are withdrawing from Germany, British investors in particular have filled the gap”.
Broader European capital remained the foundation of Germany’s cross-border financing. European Union member states deployed €43bn into the country in 2025, down 2.7% year on year but still representing over 50% of all inbound FDI.
Combined with UK allocations, European sources accounted for more than 80% of total direct investment into the German economy.
“These figures demonstrate that the closest and most reliable economic ties remain with our European neighbours,” Sultan noted regarding the geographic concentration of capital.
Investment from non-Western markets showed mixed momentum.
Capital inflows from Saudi Arabia and Chile each increased by more than 40%, whereas investment from China rose 51% to €199m – accounting for 0.2% of the total.
Despite annual transaction volatility, long-term indicators point to stabilisation.
The 2025 headline total represents an 11% increase over the ten-year median recorded between 2015 and 2024, confirming structural resilience in Germany’s inbound industrial and commercial capital flows.
