Reference metadata describe statistical concepts and methodologies used for the collection and generation of data. They provide information on data quality and, since they are strongly content-oriented, assist users in interpreting the data. Reference metadata, unlike structural metadata, can be decoupled from the data.
Foreign direct investment (FDI) is the category of international investment made by an entity resident in one economy (direct investor) to acquire a lasting interest in an enterprise operating in another economy (direct investment enterprise). The lasting interest is deemed to exist if the direct investor acquires at least 10% of the voting power of the direct investment enterprise.
FDI statistics record separately:
1) Inward FDI (or FDI in the reporting economy), namely investment by foreigners in enterprises resident in the reporting economy.
2) Outward FDI (or FDIabroad), namely investment by residents entities in affiliated enterprises abroad.
FDI statistics record both the initial investment and all subsequent investment made by the direct investor, either in the form of equity capital, or in the form of loans, or in the form of reinvesting earnings. Investment made through other affiliated enterprises of the same group of the direct investor should also be recorded according to the international methodology.
There are three main indicators: FDI flows, stocks and income.
The indicators described in more detail below are presented in the complete tables with a breakdown by partner country or region and a breakdown by the kind of activity in which FDI is made. In the table called "Main indicators" there is a reduced breakdown by partners and data for total activity only. See the part on classification system for more detail. See also the User's guideon the structure on the database and for practical information on data downloading.
1) FDI flows denote the new investment made during the period.
FDI flows are recorded in the Balance of Payments financial account. Total FDI flows are broken down by kind of instrument used for making the investment:
Equity capital
comprises equity in branches, all shares in subsidiaries and associates (except non-participating, preferred shares that are treated as debt securities and are included under other FDI capital) and other contributions such as the provision of machinery.
Reinvested earnings
consist of the direct investor's share (in proportion to equity participation) of earnings not distributed by the direct investment enterprise. Reinvested earnings are an imputed transaction. Reinvested earnings are also recorded with opposite sign among FDI income (see below). This recording represents not distributed income as being earned by the direct investor and reinvested in the direct investment enterprise at the same time.
Other FDI capital (loans)
covers the borrowing and lending of funds, including debt securities and trade credits between direct investors and direct investment enterprises. Debt transactions between affiliated financial intermediaries recorded under direct investment flows are limited to permanent debt.
2) FDI stocks (or positions) denote the value of the investment at the end of the period.
FDI stocks are recorded in the International Investment Position. Outward FDI stocks are recorded as assets of the reporting economy, inward FDI stocks as liabilities. Similarly with flows, FDI stocks are broken down by kind of instrument. However, there are only two categories instead of three:
Equity capital and reinvested earnings
is the value of the own capital of the enterprise, including the value of own reserves that are accumulated from past reinvested earnings. Reserves corresponding to reinvested earnings are not shown separately from other equity capital as in the case of flows.
Other FDI capital
is the stock of debts (assets or liabilities) between the direct investors and the direct investment enterprise.
3) FDI income is the income accruing to direct investors during the period.
FDI income is recorded in the current account of the Balance of Payments. Total FDI income is broken down by kind of income. The categories of FDI income available are linked to the breakdown of FDI flows and stocks by kind of instrument, namely:
Dividends
Dividends payable in the period and branch profits remitted to the direct investor, gross of any withholding taxes. Dividends include payments due on common and preferred shares.
Reinvested earnings
See definition under FDI flows.
Interest on loans
Interest accrued in the period on loans (other FDI capital) with affiliated enterprises, gross of any withholding tax.
4) FDI intensity
Out of FDI annual data, an indicator useful to measure EU market integration is also calculated and disseminated in the domain Structural Indicators:
FDI intensity as % of GDP: Average of inward and outward FDI flows divided by GDP. A higher index indicates higher new FDI during the period in relation to the size of the economy as measured by GDP.
If this index increases over time, then the country/zone is becoming more integrated with the international economy.
For the classification of FDI by economic activity, the reference classification is NACE Rev. 1.1 (up to reference year 2009) and the NACE Rev.2 (from reference year 2008).
For the classification by partner country or region see the list of partners.
For a detailed description of the classifications used, see the BoP Vademecum.
3.3. Coverage - sector
See the table of correspondence for more detail on NACE activities (NACE Rev. 1.1) covered in FDI statistics.
Foreign direct investment (FDI) is the category of international investment made by an entity resident in one economy (direct investor) to acquire a lasting interest in an enterprise operating in another economy (direct investment enterprise). The lasting interest is deemed to exist if the direct investor acquires at least 10% of the voting power of the direct investment enterprise.
FDI statistics record separately:
1) Inward FDI (or FDI in the reporting economy), namely investment by foreigners in enterprises resident in the reporting economy.
2) Outward FDI (or FDIabroad), namely investment by residents entities in affiliated enterprises abroad.
FDI statistics record both the initial investment and all subsequent investment made by the direct investor, either in the form of equity capital, or in the form of loans, or in the form of reinvesting earnings. Investment made through other affiliated enterprises of the same group of the direct investor should also be recorded according to the international methodology.
There are three main indicators presented: FDI flows, stocks and income.
These indicators are described in more detail below and are presented in the complete tables with a breakdown by partner country or region and a breakdown by the kind of activity in which FDI is made. In the table called "Main indicators" there is a reduced breakdown by partners and data for total activity only. See the part on classification system for more detail. See also the User's guideon the structure on the database and for practical information on data downloading.
1) FDI flows denote the new investment made during the period.
FDI flows are recorded in the Balance of Payments financial account. Total FDI flows are broken down by kind of instrument used for making the investment:
Equity capital
comprises equity in branches, all shares in subsidiaries and associates (except non-participating, preferred shares that are treated as debt securities and are included under other FDI capital) and other contributions such as the provision of machinery.
Reinvested earnings
consist of the direct investor's share (in proportion to equity participation) of earnings not distributed by the direct investment enterprise. Reinvested earnings are an imputed transaction. Reinvested earnings are also recorded with opposite sign among FDI income (see below). This recording represents not distributed income as being earned by the direct investor and reinvested in the direct investment enterprise at the same time.
Other FDI capital (loans)
covers the borrowing and lending of funds, including debt securities and trade credits between direct investors and direct investment enterprises. Debt transactions between affiliated financial intermediaries recorded under direct investment flows are limited to permanent debt.
2) FDI stocks (or positions) denote the value of the investment at the end of the period.
FDI stocks are recorded in the International Investment Position. Outward FDI stocks are recorded as assets of the reporting economy, inward FDI stocks as liabilities. Similarly with flows, FDI stocks are broken down by kind of instrument. However, there are only two categories instead of three:
Equity capital and reinvested earnings
is the value of the own capital of the enterprise, including the value of own reserves that are accumulated from past reinvested earnings. Reserves corresponding to reinvested earnings are not shown separately from other equity capital as in the case of flows.
Other FDI capital
is the stock of debts (assets or liabilities) between the direct investors and the direct investment enterprise.
3) FDI income is the income accruing to direct investors during the period.
FDI income is recorded in the current account of the Balance of Payments. Total FDI income is broken down by kind of income. The categories of FDI income available are linked to the breakdown of FDI flows and stocks by kind of instrument, namely:
Dividends
Dividends payable in the period and branch profits remitted to the direct investor, gross of any withholding taxes. Dividends include payments due on common and preferred shares.
Reinvested earnings
See definition under FDI flows.
Interest on loans
Interest accrued in the period on loans (other FDI capital) with affiliated enterprises, gross of any withholding tax.
4) FDI intensity
Out of FDI annual data, an indicator useful to measure EU market integration is also calculated and disseminated in the domain Structural Indicators:
FDI intensity as % of GDP: Average of inward and outward FDI flows divided by GDP. A higher index indicates higher new FDI during the period in relation to the size of the economy as measured by GDP.
If this index increases over time, then the country/zone is becoming more integrated with the international economy.
3.5. Statistical unit
Foreign direct investor
A direct investor is an individual, an incorporated or unincorporated public or private enterprise, a government, a group of related individuals, or a group of related incorporated and/or unincorporated enterprises which have a direct investment enterprise operating in a country other than the country or countries of residence of the direct investor or investors.
Direct investment enterprise
A direct investment enterprise is an enterprise in which a foreign investor owns 10% or more of voting power or has an effective voice in the management of the enterprise. Some countries may feel it necessary to treat the 10% limit with flexibility to fit circumstances. A direct investment enterprise may be an incorporated enterprise - a subsidiary or associate company - or an unincorporated enterprise (branch):
Subsidiary: ownership > 50% or control.
A subsidiary is an incorporated enterprise in which:
i) the foreign investor controls directly or indirectly (through another subsidiary) more than 50% of the shareholders' voting power, or
ii) the foreign investor has anyway control over the enterprise, i.e. the right to appoint or remove a majority of the members of this enterprise's administrative, management or supervisory body.
Associate: ownership between 10% and 50% and no control on enterprise.
Branch: wholly or jointly owned unincorporated enterprise. For example, a permanent establishment or office abroad of a foreign direct investor; or mobile equipment operating within an economy for at least one year if accounted for separately by the operator (e.g. ships, aircraft, gas and oil drilling rigs); but also: land, structures and immovable equipment and objects directly owned by a foreign resident (e.g. holiday and second homes).
Indirect participation in direct investment enterprises
Statistics based on the definitions given above should cover all enterprises in which the direct investor has directly or indirectly a direct investment interest (Framework of Direct Investment Relationships). In particular, this mainly means that: a) reinvested earnings (flows, income) and the corresponding reserves (stocks) of indirectly participated enterprises should be included in FDI statistics in proportion to the indirect percent of equity held by the direct investor. The indirect percent of equity is obtained by multiplying the direct percent of equity held at each step of the chain linking the direct investor and the direct investment enterprise; b) direct investment flows, income and stocks within a group of enterprises should be included in FDI statistics without consideration of the percent of equity directly held by these enterprises in each other. For more detail, see the OECD Benchmark Definition of Foreign Direct Investment Third Edition.
3.6. Statistical population
The statistical population is composed of all direct investors (for outward FDI) and by all direct investment enterprises (for inward FDI).
3.7. Reference area
For the most recent years all FDI data for the EU Member States, EU-15, EU-25, EU-27, Euro area, the United States and Japan, EFTA countries (except Liechtenstein) and Candidate Countries (Croatia and Turkey) are provided. For less recent years data availability varies across Member States.
3.8. Coverage - Time
Annual time series on flows cover the reference period from 1992 onwards. Longer time series (including 1984-1991) are available for some EU Member States and for EU-12 aggregates, but with a reduced detail by partner and activity.
Annual time series on stocks cover the period from 1994 onwards.
Series for income start in 1995.
EU-15 aggregates are available from 1992-2005, Euro area aggregates as from 1997, EU-25 aggregates as from 2001 and EU-27 aggregates as from 2004.
For more details on data availability see Quality Profile on Foreign Direct Investment (FDI) intensity as % of GDP
3.9. Base period
N/A
Data are in millions of Euro/ECU.
FDI stocks refer to the end of the recording period; flows and income refer to the recording period. All data are annual.
6.1. Institutional Mandate - legal acts and other agreements
For a long period, Member States have submitted to Eurostat BoP data following the arrangements contained in bilateral Gentleman's Agreements.
Recommendation (ECB/2004/16) was issued to request national authorities other than NCBs that compile b.o.p. statistics to cooperate with the respective NCBs so as to meet the ECB requirements.
In order to receive all the legal information, please contact Celex@opoce.cec.be.
6.2. Institutional Mandate - data sharing
N/A
7.1. Confidentiality - policy
Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.
7.2. Confidentiality - data treatment
Data received from the Member States is flagged for primary confidentiality. Eurostat applies a disclosure control (secondary confidentiality treatment) to ensure that no confidential cells may be calculated or deducted indirectly.
8.1. Release calendar
Every May preliminary (and not fully detailed) data for year T-1 are released. At the end of every December, data for year T-1 (with full detail by partner country) are published, together with revisions for years T-2 and T-3.
8.2. Release calendar access
N/A
8.3. Release policy - user access
In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see item 10 - 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.
Annual.
10.1. Dissemination format - News release
News releases on-line.
10.2. Dissemination format - Publications
News Releases
Free pdf publications: Statistics in Focus
Free web publications: Statistics Explained
Eurostat yearbook
Pocketbooks
10.3. Dissemination format - online database
Please consult free data on-line or refer to contact details.
Quality Profile on Foreign Direct Investment (FDI) intensity as % of GDP.
11.1. Quality assurance
See Quality Profile on Foreign Direct Investment (FDI) intensity as % of GDP.
11.2. Quality management - assessment
See Quality Profile on Foreign Direct Investment (FDI) intensity as % of GDP.
12.1. Relevance - User Needs
N/A
12.2. Relevance - User Satisfaction
N/A
12.3. Completeness
The EU average availability of FDI data as required by the BoP regulation is 100% for the breakdown by partner and above 95% for the breakdown by economic activity.
13.1. Accuracy - overall
The national authorities, the European Central Bank and Eurostat follow well prescribed harmonised methodology in the compilation of FDI statistics (see section 11.1). Thus, these are associated with a high level of overall accuracy. Moreover, the national statistics delivered to the ECB and to Eurostat undergo rigorous validation in order to ensure their correctness. These checks examine the logical consistency between reported values, consistency with historical data, consistency with independently reported relevant statistics, agreement between aggregates and detailed data and, finally, agreement between aggregates produced by ECB and Eurostat.
FDI statistics may be revised in the two years following their initial dissemination. The magnitude of revisions has been decreasing, but they may still be sizeable due to the difficulty of estimating especially reinvested earnings.
13.2. Sampling error
NR
13.3. Non-sampling error
N/A
14.1. Timeliness
Annual FDI data are released around 12 months after the reference period. Preliminary data, with limited detail for partners and posts, are released 5 months after the reference period.
14.2. Punctuality
Punctuality refers to the time lag between the required date of expected data delivery by the Member States and the actula delivery date. 25 out of 27 Member States normally deliver data on time.
15.1. Comparability - geographical
National authorities, ECB and Eurostat follow a methodology for the compilation of FDI statistics which is harmonised to a large extent. The methodology is defined in 'OECD Benchmark Definition of Foreign Direct Investment, third edition' and 'International Monetary Fund Balance of Payments Manual, fifth edition' and has been augmented to cover additional statistical needs. Some methodological differences exist however and hence the comparability of FDI statistics among different countries is restricted. For example:
The extremely high values of Foreign Direct Investment (FDI) intensity as % of GDP for Luxembourg are explained for the most part by the presence of Special Purpose Entities (SPEs, often empty shells or holding companies), which account for 85-90% of FDI inflows and outflows. Moreover, EU aggregates include Special Purpose Entities (SPEs), which are a particular class of enterprises not included in all countries' national statistics.
EU aggregates are produced with data including Special Purpose Entities for all Member States and hence are not just sums of national figures. Besides this, some of the data used in the aggregates are estimates produced by Eurostat.
Regarding SPEs, the following particular situations apply:
Austria:National data are without investments made or received by Special Purpose Entities and with geographical allocation according to the Ultimate Beneficial Owner.
Hungary: Investments made or received by Special Purpose Entities are excluded in the national FDI data starting from reference year 2006.
Cyprus: Investments by Special Purpose Entities are not included in the national data from reference year 2008.
Luxembourg: Investments made or received by Special Purpose Entities are not included in the national FDI stock data. The contribution of Luxembourg to the EU aggregates has been substantially revised upwards since 2011 due to a new survey on Special Purpose Entities.
The Netherlands: Investments made or received by Special Purpose Entities are not included in the national data. The contribution of the Netherlands to the EU aggregates is subject to substantial upward revisions since 2009 due to a regular benchmark update of the Dutch resident Special Purpose Entities population.
Moreover, national compilation methods are still undergoing changes with the aim to enhance harmonization or implement methodological developments. Two particular situations apply:
Spain: Break in time series since 2005 due to the inclusion of new sources of information in FDI position data.
Belgium: Break in series for national data on flows since 2008 and positions since 2009 due to the implementation of new methodological standards.
15.2. Comparability - over time
The data comparability over time is restricted. EU aggregates have a break in 1999 due to the incorporation of data on SPEs from that year onwards.
National compilation methodologies have been undergoing changes (geared towards further harmonisation with other EU Member States) throughout the period for which data are available. The extent of breaks in national series depends on the extent of revisions undertaken by each country in response to such changes.
The internal coherence of the data is good. During the data validation process, the internal coherence of the data is checked and corrections are made in agreement with the Member States in case data is not coherent.
N/A
17.1. Data revision - policy
The revision policy is based on an agreement between Eurostat and the ECB. Every May preliminary (and not fully detailed) data for year T-1 are released. At the end of every December, data for year T-1 (with full detail by partner country) are published, together with revisions for years T-2 and T-3.
17.2. Data revision - practice
N/A
18.1. Source data
EU FDI data are collected by Member States Balance of Payments compilers through a variety of sources. The main types of sources used are reports by the banking system on international transactions and direct surveys addressed to resident statistical units.
Concerning Member States' current practices, most common implementation problems and recommendations for improvement see also the final report of the Task force on FDI .
18.2. Frequency of data collection
FDI data are provided to Eurostat by the Member States on a quarterly basis with a very limited number of breakdowns. Annual FDI data are provided to Eurostat by the Member States at the end of September of each year for the year t-1 and t-2 ( sometimes the revisions may go further back).
18.3. Data collection
In some cases data collection is based on sample surveys from resident populations of direct investors (for outward FDI) and of direct investment enterprises (for inward FDI). When a direct survey is used for collecting data, cut-off thresholds (in terms of value of equity capital in most cases, below which units are not covered) are used. For more detail on Member States data collection methods see the methodological summary published by the European Central Bank.
18.4. Data validation
Validation is performed at the level of National Central Banks, Eurostat and ECB, as appropriate. Eurostat submits the data received from the countries to a number of checks. These checks verify the plausibility of the data (e.g. the development of time series), their internal consistency (aggregates should match the sum of the sub-items), their correspondence with data already disseminated by the same country on his own web-page or with data sent to IMF. Furthermore, for Euro area Member States, a cross checking is conducted with ECB on the data that the Member States send to the ECB for the Euro area aggregates. This ensures consistency of EU and Euro area aggregates published by Eurostat and the ECB.
18.5. Data compilation
All series are given in current value (EUR million starting from 1999, ECU million before 1999). For FDI statistics, the Balance of Payments sign convention is not applied. This means that both inward and outward FDI are published with a positive sign. A negative sign for flows indicates disinvestment in both cases.
Aggregate data for the European Union are in general obtained as the sum of the respective Member States data. Member States data are in some cases confidential and therefore are not shown in datasets or tables published on Eurostat website. Moreover, starting from reference period 1999, data for Special Purpose Entities (SPEs) are additionally collected by Eurostat and the ECB from Member States not including SPEs' FDI in national data. This insures adherence to international standards, exhaustiveness of the EU aggregates and explains why the total of Member States' flows differs systematically from the EU aggregates. SPEs are mainly financial holding companies, foreign-owned, and principally engaged in cross-border financial transactions, with no or negligible local activity in the Member State of residence.
18.6. Adjustment
Since some of the necessary data are not available with the desired breakdown by partner and/or kind of activity from some member States, several estimations are required for the production of detailed EU-level annual data.
Data concerning the Euro area do not match exactly with those released by the European Central Bank for the same period. The reason lies in a small methodological difference in the data transmitted to Eurostat and the ECB by a few Member States and possible different timing of data revisions. Eurostat is working to minimize these discrepancies in the very near future.
Foreign direct investment (FDI) is the category of international investment made by an entity resident in one economy (direct investor) to acquire a lasting interest in an enterprise operating in another economy (direct investment enterprise). The lasting interest is deemed to exist if the direct investor acquires at least 10% of the voting power of the direct investment enterprise.
FDI statistics record separately:
1) Inward FDI (or FDI in the reporting economy), namely investment by foreigners in enterprises resident in the reporting economy.
2) Outward FDI (or FDIabroad), namely investment by residents entities in affiliated enterprises abroad.
FDI statistics record both the initial investment and all subsequent investment made by the direct investor, either in the form of equity capital, or in the form of loans, or in the form of reinvesting earnings. Investment made through other affiliated enterprises of the same group of the direct investor should also be recorded according to the international methodology.
There are three main indicators: FDI flows, stocks and income.
The indicators described in more detail below are presented in the complete tables with a breakdown by partner country or region and a breakdown by the kind of activity in which FDI is made. In the table called "Main indicators" there is a reduced breakdown by partners and data for total activity only. See the part on classification system for more detail. See also the User's guideon the structure on the database and for practical information on data downloading.
1) FDI flows denote the new investment made during the period.
FDI flows are recorded in the Balance of Payments financial account. Total FDI flows are broken down by kind of instrument used for making the investment:
Equity capital
comprises equity in branches, all shares in subsidiaries and associates (except non-participating, preferred shares that are treated as debt securities and are included under other FDI capital) and other contributions such as the provision of machinery.
Reinvested earnings
consist of the direct investor's share (in proportion to equity participation) of earnings not distributed by the direct investment enterprise. Reinvested earnings are an imputed transaction. Reinvested earnings are also recorded with opposite sign among FDI income (see below). This recording represents not distributed income as being earned by the direct investor and reinvested in the direct investment enterprise at the same time.
Other FDI capital (loans)
covers the borrowing and lending of funds, including debt securities and trade credits between direct investors and direct investment enterprises. Debt transactions between affiliated financial intermediaries recorded under direct investment flows are limited to permanent debt.
2) FDI stocks (or positions) denote the value of the investment at the end of the period.
FDI stocks are recorded in the International Investment Position. Outward FDI stocks are recorded as assets of the reporting economy, inward FDI stocks as liabilities. Similarly with flows, FDI stocks are broken down by kind of instrument. However, there are only two categories instead of three:
Equity capital and reinvested earnings
is the value of the own capital of the enterprise, including the value of own reserves that are accumulated from past reinvested earnings. Reserves corresponding to reinvested earnings are not shown separately from other equity capital as in the case of flows.
Other FDI capital
is the stock of debts (assets or liabilities) between the direct investors and the direct investment enterprise.
3) FDI income is the income accruing to direct investors during the period.
FDI income is recorded in the current account of the Balance of Payments. Total FDI income is broken down by kind of income. The categories of FDI income available are linked to the breakdown of FDI flows and stocks by kind of instrument, namely:
Dividends
Dividends payable in the period and branch profits remitted to the direct investor, gross of any withholding taxes. Dividends include payments due on common and preferred shares.
Reinvested earnings
See definition under FDI flows.
Interest on loans
Interest accrued in the period on loans (other FDI capital) with affiliated enterprises, gross of any withholding tax.
4) FDI intensity
Out of FDI annual data, an indicator useful to measure EU market integration is also calculated and disseminated in the domain Structural Indicators:
FDI intensity as % of GDP: Average of inward and outward FDI flows divided by GDP. A higher index indicates higher new FDI during the period in relation to the size of the economy as measured by GDP.
If this index increases over time, then the country/zone is becoming more integrated with the international economy.
Foreign direct investment (FDI) is the category of international investment made by an entity resident in one economy (direct investor) to acquire a lasting interest in an enterprise operating in another economy (direct investment enterprise). The lasting interest is deemed to exist if the direct investor acquires at least 10% of the voting power of the direct investment enterprise.
FDI statistics record separately:
1) Inward FDI (or FDI in the reporting economy), namely investment by foreigners in enterprises resident in the reporting economy.
2) Outward FDI (or FDIabroad), namely investment by residents entities in affiliated enterprises abroad.
FDI statistics record both the initial investment and all subsequent investment made by the direct investor, either in the form of equity capital, or in the form of loans, or in the form of reinvesting earnings. Investment made through other affiliated enterprises of the same group of the direct investor should also be recorded according to the international methodology.
There are three main indicators presented: FDI flows, stocks and income.
These indicators are described in more detail below and are presented in the complete tables with a breakdown by partner country or region and a breakdown by the kind of activity in which FDI is made. In the table called "Main indicators" there is a reduced breakdown by partners and data for total activity only. See the part on classification system for more detail. See also the User's guideon the structure on the database and for practical information on data downloading.
1) FDI flows denote the new investment made during the period.
FDI flows are recorded in the Balance of Payments financial account. Total FDI flows are broken down by kind of instrument used for making the investment:
Equity capital
comprises equity in branches, all shares in subsidiaries and associates (except non-participating, preferred shares that are treated as debt securities and are included under other FDI capital) and other contributions such as the provision of machinery.
Reinvested earnings
consist of the direct investor's share (in proportion to equity participation) of earnings not distributed by the direct investment enterprise. Reinvested earnings are an imputed transaction. Reinvested earnings are also recorded with opposite sign among FDI income (see below). This recording represents not distributed income as being earned by the direct investor and reinvested in the direct investment enterprise at the same time.
Other FDI capital (loans)
covers the borrowing and lending of funds, including debt securities and trade credits between direct investors and direct investment enterprises. Debt transactions between affiliated financial intermediaries recorded under direct investment flows are limited to permanent debt.
2) FDI stocks (or positions) denote the value of the investment at the end of the period.
FDI stocks are recorded in the International Investment Position. Outward FDI stocks are recorded as assets of the reporting economy, inward FDI stocks as liabilities. Similarly with flows, FDI stocks are broken down by kind of instrument. However, there are only two categories instead of three:
Equity capital and reinvested earnings
is the value of the own capital of the enterprise, including the value of own reserves that are accumulated from past reinvested earnings. Reserves corresponding to reinvested earnings are not shown separately from other equity capital as in the case of flows.
Other FDI capital
is the stock of debts (assets or liabilities) between the direct investors and the direct investment enterprise.
3) FDI income is the income accruing to direct investors during the period.
FDI income is recorded in the current account of the Balance of Payments. Total FDI income is broken down by kind of income. The categories of FDI income available are linked to the breakdown of FDI flows and stocks by kind of instrument, namely:
Dividends
Dividends payable in the period and branch profits remitted to the direct investor, gross of any withholding taxes. Dividends include payments due on common and preferred shares.
Reinvested earnings
See definition under FDI flows.
Interest on loans
Interest accrued in the period on loans (other FDI capital) with affiliated enterprises, gross of any withholding tax.
4) FDI intensity
Out of FDI annual data, an indicator useful to measure EU market integration is also calculated and disseminated in the domain Structural Indicators:
FDI intensity as % of GDP: Average of inward and outward FDI flows divided by GDP. A higher index indicates higher new FDI during the period in relation to the size of the economy as measured by GDP.
If this index increases over time, then the country/zone is becoming more integrated with the international economy.
Foreign direct investor
A direct investor is an individual, an incorporated or unincorporated public or private enterprise, a government, a group of related individuals, or a group of related incorporated and/or unincorporated enterprises which have a direct investment enterprise operating in a country other than the country or countries of residence of the direct investor or investors.
Direct investment enterprise
A direct investment enterprise is an enterprise in which a foreign investor owns 10% or more of voting power or has an effective voice in the management of the enterprise. Some countries may feel it necessary to treat the 10% limit with flexibility to fit circumstances. A direct investment enterprise may be an incorporated enterprise - a subsidiary or associate company - or an unincorporated enterprise (branch):
Subsidiary: ownership > 50% or control.
A subsidiary is an incorporated enterprise in which:
i) the foreign investor controls directly or indirectly (through another subsidiary) more than 50% of the shareholders' voting power, or
ii) the foreign investor has anyway control over the enterprise, i.e. the right to appoint or remove a majority of the members of this enterprise's administrative, management or supervisory body.
Associate: ownership between 10% and 50% and no control on enterprise.
Branch: wholly or jointly owned unincorporated enterprise. For example, a permanent establishment or office abroad of a foreign direct investor; or mobile equipment operating within an economy for at least one year if accounted for separately by the operator (e.g. ships, aircraft, gas and oil drilling rigs); but also: land, structures and immovable equipment and objects directly owned by a foreign resident (e.g. holiday and second homes).
Indirect participation in direct investment enterprises
Statistics based on the definitions given above should cover all enterprises in which the direct investor has directly or indirectly a direct investment interest (Framework of Direct Investment Relationships). In particular, this mainly means that: a) reinvested earnings (flows, income) and the corresponding reserves (stocks) of indirectly participated enterprises should be included in FDI statistics in proportion to the indirect percent of equity held by the direct investor. The indirect percent of equity is obtained by multiplying the direct percent of equity held at each step of the chain linking the direct investor and the direct investment enterprise; b) direct investment flows, income and stocks within a group of enterprises should be included in FDI statistics without consideration of the percent of equity directly held by these enterprises in each other. For more detail, see the OECD Benchmark Definition of Foreign Direct Investment Third Edition.
The statistical population is composed of all direct investors (for outward FDI) and by all direct investment enterprises (for inward FDI).
For the most recent years all FDI data for the EU Member States, EU-15, EU-25, EU-27, Euro area, the United States and Japan, EFTA countries (except Liechtenstein) and Candidate Countries (Croatia and Turkey) are provided. For less recent years data availability varies across Member States.
FDI stocks refer to the end of the recording period; flows and income refer to the recording period. All data are annual.
The national authorities, the European Central Bank and Eurostat follow well prescribed harmonised methodology in the compilation of FDI statistics (see section 11.1). Thus, these are associated with a high level of overall accuracy. Moreover, the national statistics delivered to the ECB and to Eurostat undergo rigorous validation in order to ensure their correctness. These checks examine the logical consistency between reported values, consistency with historical data, consistency with independently reported relevant statistics, agreement between aggregates and detailed data and, finally, agreement between aggregates produced by ECB and Eurostat.
FDI statistics may be revised in the two years following their initial dissemination. The magnitude of revisions has been decreasing, but they may still be sizeable due to the difficulty of estimating especially reinvested earnings.
Data are in millions of Euro/ECU.
All series are given in current value (EUR million starting from 1999, ECU million before 1999). For FDI statistics, the Balance of Payments sign convention is not applied. This means that both inward and outward FDI are published with a positive sign. A negative sign for flows indicates disinvestment in both cases.
Aggregate data for the European Union are in general obtained as the sum of the respective Member States data. Member States data are in some cases confidential and therefore are not shown in datasets or tables published on Eurostat website. Moreover, starting from reference period 1999, data for Special Purpose Entities (SPEs) are additionally collected by Eurostat and the ECB from Member States not including SPEs' FDI in national data. This insures adherence to international standards, exhaustiveness of the EU aggregates and explains why the total of Member States' flows differs systematically from the EU aggregates. SPEs are mainly financial holding companies, foreign-owned, and principally engaged in cross-border financial transactions, with no or negligible local activity in the Member State of residence.
EU FDI data are collected by Member States Balance of Payments compilers through a variety of sources. The main types of sources used are reports by the banking system on international transactions and direct surveys addressed to resident statistical units.
Concerning Member States' current practices, most common implementation problems and recommendations for improvement see also the final report of the Task force on FDI .
Annual.
Annual FDI data are released around 12 months after the reference period. Preliminary data, with limited detail for partners and posts, are released 5 months after the reference period.
National authorities, ECB and Eurostat follow a methodology for the compilation of FDI statistics which is harmonised to a large extent. The methodology is defined in 'OECD Benchmark Definition of Foreign Direct Investment, third edition' and 'International Monetary Fund Balance of Payments Manual, fifth edition' and has been augmented to cover additional statistical needs. Some methodological differences exist however and hence the comparability of FDI statistics among different countries is restricted. For example:
The extremely high values of Foreign Direct Investment (FDI) intensity as % of GDP for Luxembourg are explained for the most part by the presence of Special Purpose Entities (SPEs, often empty shells or holding companies), which account for 85-90% of FDI inflows and outflows. Moreover, EU aggregates include Special Purpose Entities (SPEs), which are a particular class of enterprises not included in all countries' national statistics.
EU aggregates are produced with data including Special Purpose Entities for all Member States and hence are not just sums of national figures. Besides this, some of the data used in the aggregates are estimates produced by Eurostat.
Regarding SPEs, the following particular situations apply:
Austria:National data are without investments made or received by Special Purpose Entities and with geographical allocation according to the Ultimate Beneficial Owner.
Hungary: Investments made or received by Special Purpose Entities are excluded in the national FDI data starting from reference year 2006.
Cyprus: Investments by Special Purpose Entities are not included in the national data from reference year 2008.
Luxembourg: Investments made or received by Special Purpose Entities are not included in the national FDI stock data. The contribution of Luxembourg to the EU aggregates has been substantially revised upwards since 2011 due to a new survey on Special Purpose Entities.
The Netherlands: Investments made or received by Special Purpose Entities are not included in the national data. The contribution of the Netherlands to the EU aggregates is subject to substantial upward revisions since 2009 due to a regular benchmark update of the Dutch resident Special Purpose Entities population.
Moreover, national compilation methods are still undergoing changes with the aim to enhance harmonization or implement methodological developments. Two particular situations apply:
Spain: Break in time series since 2005 due to the inclusion of new sources of information in FDI position data.
Belgium: Break in series for national data on flows since 2008 and positions since 2009 due to the implementation of new methodological standards.
The data comparability over time is restricted. EU aggregates have a break in 1999 due to the incorporation of data on SPEs from that year onwards.
National compilation methodologies have been undergoing changes (geared towards further harmonisation with other EU Member States) throughout the period for which data are available. The extent of breaks in national series depends on the extent of revisions undertaken by each country in response to such changes.
