World direct investment patterns

Data extracted in June 2024.

Planned article update: August 2025.

Highlights

In 2022, Europe was the largest location of foreign direct investment stocks in the world, accounting for more than one-third (35%) of the world's inward investment positions.

In 2022, Europe was the leading outward investor in the world, accounting for more than two-fifths (42%) of the world's outward investment stocks.

World stocks of foreign direct investment, 2022
(% of total)
Source: Eurostat (bop_fdi6_pos) and UNCTAD (FDI/MNE database)

Globalisation patterns in EU trade and investment is an online Eurostat publication presenting a summary of recent European Union (EU) statistics on economic aspects of globalisation, focusing on patterns of EU trade and investment.

In an attempt to remain competitive, modern-day business relationships extend well beyond international trade in goods and services. Indeed, there is a growing reliance upon different forms of industrial organisation, including foreign affiliates, overseas investment, mergers, joint ventures, subcontracting, offshoring or licensing agreements. Foreign direct investment (FDI) is one such economic strategy and is the subject of this article.

Some economists argue that, compared with international trade, FDI creates deeper links between economies, thereby stimulating technology transfers and fostering the exchange of know-how, which in turn drives productivity and makes economies more competitive. Governments often use economic arguments as a reason for seeking to attract FDI, based on the premise that it can help generate economic growth and provide jobs.

On the other hand, other economists provide a range of counter arguments, highlighting the role played by some multinational enterprise groups in 'stripping' resources or exploiting lower labour and environmental standards in host economies. Furthermore, there is also a considerable amount of literature around corporate responsibility, ethics and tax-optimisation/avoidance techniques that may be adopted by multinational enterprise groups. As such, there remains a sizeable debate over the motives and redistributive effects of FDI.

Data for the world and non-EU countries have been converted from United States dollars to euro. Annual average exchange rates have been used for FDI flows and end-of-year rates for FDI stocks (positions).

Statistics on foreign direct investment

Statistics on foreign direct investment

Foreign direct investment (FDI) is an investment made by a resident enterprise in an economy (direct investor or parent enterprise) with the objective of establishing a lasting interest in an enterprise that is resident in another economy (direct investment enterprise). This implies the existence of a long-term relationship between the direct investor and the direct investment enterprise, as well as the ability to exercise some form of control/influence over business decisions. Indeed, this effective voice in the management of the foreign enterprise is 1 of the principal differences between FDI and other forms of investment, such as portfolio investment (where the investor doesn't seek control the foreign enterprise) or other assets (for example, intellectual property rights).

FDI data are based on international standards: since 2013, these data follow the standards laid out in the IMF's Balance of Payments and International Investment Position Manual, 6th edition (BPM6) and the OECD's Benchmark Definition of Foreign Direct Investment, 4th edition (BD4). Within the financial account of the balance of payments, a positive sign represents an increase in an asset or a liability to which it relates, while a negative sign represents a decrease. Therefore, a plus sign denotes a net increase in financial assets or liabilities, while a minus sign refers to a net decrease in financial assets or liabilities.

There are 4 broad types of FDI: i) the creation of productive assets, for example, establishing a new plant/office abroad (so-called 'greenfield investment'); ii) the purchase of existing assets abroad through acquisitions, mergers or takeovers ('brownfield investment'); iii) the extension of capital, which relates to additional investments being made to expand an established business; and iv) financial restructuring, which refers to investments for debt repayment or loss reduction.

Important: note that the data presented for the EU include special purpose entities (SPEs), while those for the rest of the world exclude SPEs (see article on Foreign direct investment – intensity ratios for more information). Time series for the EU and its countries excluding SPEs are only available, at the time of writing, for the period since 2013 and hence in order to avoid a break in series the information presented systematically include SPEs. From an economic standpoint, the inclusion of SPEs may distort the geographic distribution of FDI statistics as it can appear that countries receive or make investments when in reality the funds are simply being passed through holding companies and other similar structures. For this reason, statistics excluding SPEs should generally be preferred for economic analyses of FDI, as they remove those flows of FDI that have little or no impact on 'real' economies. On the other hand, as part of the balance of payments, the inclusion of SPEs should generally be favoured insofar as the main objective for this type of analyses is to measure all (direct) cross-border monetary transactions, irrespective of whether these are through SPEs or not.

Stocks of foreign direct investment

In 2022, Europe accounted for 42% of the world's outward investment positions

The international investment position of a country details its stock of financial assets and liabilities; for the purpose of this publication these stocks are measured at the end of each year (although more detailed statistics are collected at the end of each quarter). FDI stocks reflect the accumulated value held at the end of the reference period, reflecting the value of stocks at the start of the year, adjusted for any transactions (flows) which take place during the year and any changes in the value of positions other than transactions (for example, revaluations due to exchange rates or other price changes).

In 2022, the global stock of FDI was valued at €39.4 trillion (€39 400 billion), based on an average of inward and outward positions. Europe was the largest source and destination of FDI stocks in the world. According to the United Nations, more than one-third (35.3%) of global inward investment was located in Europe (€14.6 trillion), while it accounted for more than two-fifths (42.1%) of the world's outward investment stocks (some €15.7 trillion).

Between 2012 and 2022, Northern America and Asia became a more common location for foreign investment

There was a relatively strong decline between 2012 and 2019 in the share of global FDI stocks that were located in Europe, its share of the world total falling by 5.8 percentage points (pp). However, there was a considerable change in 2020, in part reflecting the impact of the COVID-19 crisis, as investment stocks in Europe grew rapidly – the share of Europe rose 4.4 pp between 2019 and 2020. However, the long-term development returned, as Europe's share dropped to 35.3% by 2022, somewhat below the 2019 share and 6.7 pp below the 2012 share. The fall between 2012 and 2022 in the share of global FDI stocks that were located in Europe was the largest fall recorded in any of the continents over this period.

The share of FDI stocks located in Latin America and the Caribbean also fell (down 1.9 pp between 2012 and 2022), and falls were also recorded in Oceania (down 1.1 pp) and Africa (down 0.7 pp). By contrast, the share of global direct investment in Northern America and Asia increased, up 5.6 and 4.9 pp, respectively.

Europe's outward stocks of FDI were greater than the value of inward FDI stocks held by the rest of the world within Europe; as such, Europe was a net investor. Europe was the only continent that reported being a net investor. The second part of Figure 1 shows that there were relatively large fluctuations concerning Europe's share of the world's outward FDI stocks between 2012 and 2022. This proportion started at 48.3% in 2012, in the aftermath of the global financial and economic crisis, in other words, at close to half of the global total. This share fell for 5 successive years to 42.6% by 2017; an increase to 43.9% in 2018 was followed by a return to 42.6% in 2019. The EU's share of the world's outward FDI stocks increased strongly in 2020, up to 45.7% before the generally downward trend returned in 2021 and 2022. The 42.1% share recorded in 2022 was the lowest during the period under consideration.

Asia had the second highest share (28.0%) of the world's outward FDI stocks in 2022, closely followed by Northern America (25.3%). Between 2012 and 2022, Europe's share declined greatly (down 6.2 pp), while there were smaller decreases observed for Northern America (down 1.9 pp), Oceania (down 0.5 pp), Latin America and the Caribbean (down 0.3 pp) and Africa (down 0.1 pp). By contrast, there was a sizeable increase in the share of outward FDI from Asia (up 8.8 pp).

Figure 1: Stocks of foreign direct investment, by continent, 2012–22
(% of world total)
Source: UNCTAD (FDI/MNE database)

Stocks of foreign direct investment represent about one-third of the world's annual economic output

Figure 2 presents information on the size of FDI stocks relative to the size of each economy (as measured by annual gross domestic product (GDP)). The global average in 2022 for the ratio of outward direct investment stocks to GDP was 39.9%, while the ratio of inward direct investment stocks to GDP was 44.0%.

In 2022, 2 Asian economies – Hong Kong and Singapore – reported particularly high degrees of 'openness', insofar as inward FDI stocks in both these reporting economies were valued considerably higher than their levels of GDP; the values of direct investment stocks in Hong Kong and Singapore were 5.8 and 5.1 times as high as their GDP, respectively. In all of the remaining economies presented in Figure 2, the value of inward FDI stocks was less than the economic output of the country / geographical aggregate concerned; the next highest share was recorded in the United Kingdom (with inward FDI stocks representing 87.4% of GDP).

Direct investment stocks in the EU were valued at 48.5% of GDP in 2022, which was somewhat higher than the global average. Aside from Hong Kong, Singapore and the United Kingdom, Canada was the only other global competitor (among those shown in Figure 2) that recorded a higher ratio than the EU. By contrast, stocks of inward FDI relative to GDP were much lower in the Chinese (21.3%), Turkish (18.2%), Russian (16.9%), South Korean (16.3%), Indian (14.7%) and, in particular, Japanese (5.3%) economies. The relatively low overall level of inward FDI stocks in Japan resulted from an absence of foreign investment in most activities, aside from the manufacture of machinery and motor vehicles.

Most 'open' economies have considerable stocks of both inward and outward investment

Reversing the analysis and considering the relative importance of outward stocks of FDI from each economy, a general pattern emerges whereby many of those countries which were 'open' to a high degree of market penetration in the form of inward FDI were also found to have high ratios of outward FDI relative to GDP. This supports a view that some economies seek to gain a competitive advantage by encouraging free trade and investment opportunities, whereas other countries are more inward-looking.

Nevertheless, there were some exceptions: for example, the ratio of stocks of direct investment abroad relative to GDP for Japan was 46.0% (much higher than the ratio of inward FDI stocks relative to GDP) – suggesting that while it was relatively commonplace for Japanese enterprises to invest in foreign plants, it was far less common for foreign enterprises to invest in Japan. A similar pattern was observed in Canada, where the ratio of outward stocks of FDI relative to GDP was 95.1%, and also in South Korea (where outward investment was more than double the size of inward investment). By contrast, the value of stocks of direct investment abroad from Brazil, India, Mexico and Türkiye was relatively low (both in relation to GDP and in relation to the value of stocks of inward investment in each of these economies).

These differences between ratios for inward and outward stocks of FDI may also be used to identify which economies were net investors in 2022; this was the case for Japan, the EU, Canada, South Korea, the United Arab Emirates and South Africa.

Figure 2: Stocks of foreign direct investment, relative to GDP, 2022
(%)
Source: Eurostat (bop_fdi6_pos) and (nama_10_gdp) and UNCTAD (FDI/MNE database)

Multinational enterprises

A wide range of factors may influence an enterprise's decision as to whether to (re)locate (some) production abroad, including the size and distance of the foreign market, its growth prospects, wage and productivity levels, or regulatory and legal regimes. However, investment decisions are often focused on profits. As the relative price of transport and communications fell, it became considerably easier for multinational enterprises to consider moving their production locations across the globe. For example, this may lead to benefits from cost savings that may be linked to lower labour costs or local resource endowments of raw materials. In a similar vein, the provision of some services has also been affected, as witnessed by the concentration of call centres / helpdesks and software developers in some countries. Furthermore, FDI provides enterprises with the possibility of accessing protected and regulated service markets through the establishment of a commercial presence in the host economy.

Table 1 provides details relating to the size of the top 20 non-financial multinational enterprise groups in the world in terms of their foreign assets. The information comes from the United Nations Conference on Trade and Development (UNCTAD).

Half (5 out of the top 10) of the world's leading multinational enterprise groups (in terms of foreign assets) in 2023 had their headquarters in the EU: the Volkswagen Group (Germany) and Stellantis NV (the Netherlands) were specialised in the manufacture of motor vehicles, Deutsche Telekom AG (also Germany) was specialised in information and communication services, TotalEnergies SE (France) was specialised in energy activities, while Anheuser-Busch InBev NV (Belgium) was specialised in the manufacture of beverages (principally the brewing of beer).

Looking across the whole of the top 20 non-financial multinational enterprises, 8 were located in the EU (3 from Germany, 2 from France and 1 from each of Belgium, Italy and the Netherlands), 4 were from the United Kingdom, 3 from the United States, 3 from Japan, leaving a single multinational from each of China and Hong Kong.

The share of foreign assets in total assets was generally very high for most multinationals shown in Table 1, accounting for more than four-fifths of all assets in half (10 out of the top 20). However, more than half of all assets were in the domestic economy for 4 of the non-financial multinationals – Volkswagen Group (57.2%), Microsoft (61.1%), EDF (66.0%) and China National Petroleum Corp (76.0%).

Table 1: Top 20 non-financial multinational enterprise groups ranked by foreign assets, 2023
Source: UNCTAD (World Investment Report 2024)

The stock of foreign investment in China was 5.2 times as high in 2022 as it had been in 2013

Developments for both inward and outward stocks of FDI are shown in Table 2. There were 6 countries where the value (in current prices) of inward FDI stocks more than doubled between 2013 and 2022; the highest growth rates were recorded by China (where the value was 5.2 times as high in 2022 as it had been in 2013), Singapore, India, the United Arab Emirates, the United States and the United Kingdom.

The pace of change was even more rapid concerning the level of Chinese investment stocks abroad: in 2022, outward FDI stocks from China were valued at 5.7 times as high as they had been in 2013. It should be noted that the total value of these stocks had been, in 2013, still relatively small (compared with the levels recorded for the EU or the United States). The next highest growth rates for outward FDI stocks were recorded for the United Arab Emirates, South Korea and Singapore.

Table 2: Stocks of foreign direct investment, 2013–22
(€ billion)
Source: Eurostat (bop_fdi6_pos) and UNCTAD (FDI/MNE database)

The final presentation of information concerning inward and outward stocks of FDI describes the share of world stocks between the leading global players (see Figure 3). In 2022, just under one-fifth (18.6%) of global inward investment stocks were located in the EU; its share of global outward investment was somewhat higher, reaching 25.1%. The EU recorded the highest share of outward stocks of FDI in 2022 and the second highest share of inward stocks; the reverse situation – highest inward stocks and second highest outward stocks – was observed in the United States. China and the United Kingdom accounted for the third and fourth highest shares of global FDI stocks both for inward and for outward investment.

Figure 3: World stocks of foreign direct investment, 2022
(% of total)
Source: Eurostat (bop_fdi6_pos) and UNCTAD (FDI/MNE database)

Foreign direct investment flows

FDI flows comprise capital provided by a foreign direct investor to an FDI enterprise, or capital received from an FDI enterprise by a foreign direct investor. These flows are composed of 3 components: equity capital, reinvested earnings and intra-company loans. Global flows of FDI were valued at €1 331 billion in 2022, based on an average of inward and outward flows.

In 2022, Europe was the world's second largest source of foreign direct investment, behind Asia, but smallest recipient due to net divestment

Figure 4 shows the share of global flows of FDI accounted for by each continent during the period 2012–22. Note the sudden change in the geographical structure of investment flows since 2018 that may be attributed, at least in part, to recent crises. There was a dramatic overall fall in global inward investment flows in 2020 (down 45.0%), while outward flows fell somewhat more (down 48.8%). The recovery in 2021 was notably in terms of outward flows (up 128.2%) than inward flows (up 49.4%) while the changes in 2022 were more subdued (down 0.3% for inward flows and down 3.2% for outward flows. Geographically, the share of flows into and out of Asia increased greatly in 2020, while the shares into and out of Europe fell greatly.

Over the longer-term, inward investment followed a fluctuating pattern of developments coupled with a restructuring of investment flows with less directed towards Europe and more towards other continents, particularly Asia. A similar pattern was observed for outward investment. Europe's share of the world's outward investment fell from 32.7% in 2012 to 26.8% in 2014. It rebounded to 53.2% by 2018. At the start of the COVID-19 crisis (in 2020), it turned negative, down to -5.3%, but grew to 33.2% in 2021 before falling back to 15.1% in 2022. FDI inflows into Europe were negative in 2022, valued at -€101 billion, while Europe's outflows of FDI were larger at €213 billion.

While the European share of world FDI flows was considerably lower in 2022 than in 2012, Asia saw an increase in its respective shares; this was particularly the case in 2020. While global investment flows generally plummeted in 2020, inward flows to Asia were almost stable in euro terms (up 0.3%). For comparison, outward flows from Asia fell 18.5% in euro terms. As a result, Asia attracted a majority (57.9%) of global inward investment flows in 2020 and provided close to two-thirds (70.7%) of the world's outward flows. These shares dropped considerably in 2021 but increased again in 2022

back to 57.8% for inward flows, almost the same as the peak in 2020
to 42.5% for outward flows, close to the share recorded in 2019 (before the COVID-19 crisis) and above the shares recorded between 2012 and 2017.

Figure 4: World flows of foreign direct investment, by continent, 2012–22
(% of world total)
Source: UNCTAD (FDI/MNE database)

Prior to the COVID-19 crisis, developments for FDI flows were quite irregular (similar to the pattern observed for international trade in goods). Large increases in investment flows were observed in 2015, 2019 and 2021. By contrast, there was a particularly large fall in global investment flows in 2020 (coinciding with the onset of the COVID-19 crisis).

Developments observed in the levels of global FDI flows are often strongly influenced by particularly large changes observed for just 1 or 2 countries / geographical aggregates.

Looking at inward flows, the large increase observed in 2015 reflected very large changes in the level of FDI flows reported by the EU and the United States, while the large decrease observed in 2017 reflected very large changes in the level of FDI flows reported by the United Kingdom, the United States and the EU.
Concerning movements in outward flows, the large increase in 2015 mainly reflected changes reported for the EU, while the large decrease observed in 2018 reflected changes for United States, the EU and (to a lesser degree) the United Kingdom.

For both inward and outward flows, the decrease in 2020 and increase in 2021 were exceptions, as they were more broadly observed, being recorded in a majority of economies in both cases.

FDI flows entering the United States were considerably higher in 2022 than they had been in 2013

Among the economies presented in Table 3, the highest increases in absolute terms for inward flows of FDI between 2013 and 2022 concerned investment in the United States, Singapore and China (with increases in the range of €86.3 to 119.1 billion). By contrast, the highest relative growth was recorded in Japan, as its inward flows of FDI in 2022 were 17.8 times as high as in 2013, although they remained relatively low in absolute terms (€30.9 billion). Among the remaining countries, Singapore recorded inward flows of FDI in 2022 that were 3.1 times as high as they had been in 2013, inward flows more than doubled in the United Arab Emirates and India and almost doubled in Hong Kong.

Between 2013 and 2022, the United States and Australia became increasingly important investors in the global economy

The highest increases in absolute terms for outward flows of FDI between 2013 and 2022 concerned investment from the United States (which was €125.8 billion higher in 2022 than in 2013), Australia (which was €109.6 billion higher in 2022 than in 2013) and the United Kingdom (which was €92.6 billion higher in 2022 than in 2013). The highest relative growth rates were recorded for Australia and India, as their outward flows of FDI in 2022 were 102.0 and 10.9 times, respectively, as high as in 2013, although India's outflows remained relatively low in absolute terms (€13.8 billion in 2023). Most of the remaining economies also recorded higher outward flows of FDI in 2022 than in 2013, the exceptions being the EU, Russia and South Africa.

Another interesting aspect of the information presented in Table 3 is the transformation of the balance between inward and outward flows of FDI to/from certain countries. For example, Australia was a net recipient of investment every year from 2013 to 2021, but outward flows exceeded inward flows in 2022. The United Kingdom was also a net recipient of investment in most years, but not in 2017 nor in the two most recent years (2021 and 2022). Hong Kong had been a net investor abroad in 2013 and 2014 but was a net recipient from 2015 to 2022. The balance for China and the United States was more varied, both recording more inward investment in half the years studied and more outward investment in the other half. For the EU, the situation was similar, being a net recipient of investment in a few years, but more often being a net investor abroad.

Geopolitical concerns may also impact on the development of investment flows. For example, there was a considerable decrease in flows of inward and outward investment to and from Russia between 2014 and 2015, reflecting the introduction of economic sanctions and restrictions on access to capital markets for the Russian banking sector (which may have impacted this sector in the form of capital flight). Inward flows to Russia turned negative in 2022 (reflecting divestment), while outward flows decreased substantially from their record level in 2021.

Table 3: Flows of foreign direct investment, 2013–22
(€ billion)
Source: Eurostat (bop_fdi6_flow) and UNCTAD (FDI/MNE database)

In 2022, the United States was the world's largest outward investor and also the largest recipient of inward investment

Among the economies studied, the United States was the host economy that received the highest value of inward FDI in 2022, with a 21.7% share of the world total (see Figure 5). The Chinese economy received 14.4% of the world's FDI while around a tenth went each to Singapore (10.7%) and Hong Kong (9.0%). The value of inward FDI in the EU in 2022 was negative, due to disinvestment exceeding new investment by an amount equivalent to -30.6% of the world total for inward investment.

In 2022, the United States was also the leading outward investor among the economies studied, accounting for one-quarter (25.0%) of the world's FDI flows abroad. The next highest shares were observed for Japan (10.8%) and China (9.8%). As for inward FDI, the value of outward FDI from the EU in 2022 was negative, equivalent to -8.4% of the world total.

Figure 5: Share of world flows of foreign direct investment, 2022
(%)
Source: Eurostat (bop_fdi6_flow) and UNCTAD (FDI/MNE database)

Source data for tables and graphs

Direct investment patterns: tables and figures

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Database

Balance of payments – International transactions (BPM6) (bop_6)

Thematic section

Selected datasets

Balance of payments statistics and International investment positions (BPM6) (t_bop_q6)

Methodology

Balance of payments
Balance of payments – International transactions (BPM6) (ESMS metadata file – bop_6_esms)

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