US and UK dominate EU's foreign investment landscape

Foreign direct investment (FDI) stocks held by EU investors outside the bloc fell by 2.3 per cent in 2025, while investment held by non-EU residents within the EU declined by 2.8 per cent, according to Eurostat.

EU investors held €9.48 trillion in net FDI stocks in non-EU countries at the end of 2025, down from €9.70 trillion in 2024.

In the opposite direction, FDI stocks held by investors from outside the EU in the bloc fell to €6.99 trillion, compared with €7.19 trillion a year earlier.

The decline in inward investment stocks continues a trend that has been under way since 2022, when holdings by investors from the rest of the world reached €7.88 trillion, their highest level since 2013.

The figures measure the accumulated value of direct investments held across borders, rather than investment flows recorded during a particular year.

Special Purpose Entities (SPEs) continued to account for a substantial share of international investment positions, representing 26.2 per cent of total EU FDI stocks held abroad at the end of 2025.

They accounted for an even larger proportion of investment held within the bloc by non-EU residents, at 33.3 per cent.

SPEs are legal entities established primarily to facilitate financial transactions and investment structures, rather than to carry out substantial operational activities.

The United States remained the largest destination for EU foreign investment, accounting for 29.4 per cent of the bloc’s total FDI stocks held outside its borders.

This amounted to €2.79 trillion at the end of 2025, placing the US comfortably ahead of the United Kingdom, which accounted for €1.88 trillion, or 19.8 per cent.

Switzerland ranked third with €812 billion, representing 8.6 per cent of EU investment stocks abroad.

Brazil followed with €310 billion, or 3.3 per cent, while Canada accounted for €246 billion, equivalent to 2.6 per cent.

The Cayman Islands and Mexico each represented 2.4 per cent of EU foreign investment stocks, while China, excluding Hong Kong, and Singapore each accounted for 2.3 per cent.

Bermuda completed the list of the leading destinations, with a 2 per cent share.

The United States was also the largest source of foreign investment held within the EU, accounting for €2.08 trillion, or 29.7 per cent of the total.

The United Kingdom ranked second, with €1.26 trillion, representing 18.1 per cent of inward FDI stocks.

Switzerland followed with €602 billion, or 8.6 per cent, while the Cayman Islands accounted for €323 billion, equivalent to 4.6 per cent.

Japan was the fifth-largest source, with €249 billion, representing 3.6 per cent of the total.

Investors from Singapore accounted for a further 3.5 per cent of FDI stocks held in the EU, followed by Canada at 3.2 per cent and Bermuda at 2.8 per cent.

Gibraltar and Jersey each accounted for 2.1 per cent.

The figures highlight the continued importance of the United States and the United Kingdom in the EU’s international investment relationships, with both countries occupying the two leading positions in outward and inward FDI stocks.