In this page: FDI in Figures | What to consider if you invest in the United Kingdom | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information
According to the World Investment Report 2022 published by UNCTAD, after the declining trend observed during the last years, FDI inflows increased in 2021, reaching USD 27.6 billion, compared to USD 18.2 billion in 2020 (+51.5%). Equity investment more than doubled, together with cross-border M&A values. Large deals included the merger of Fiat Chrysler Automobiles with Peugeot for USD 22 billion and the purchase of GW Pharmaceuticals by Jazz Pharmaceuticals for USD 6.8 billion (UNCTAD). The stock of FDI in 2021 was about USD 2.6 trillion. The UK was the 14th-largest recipient of global FDI flows, winning three positions from the previous year (UNCTAD). The Brexit process has raised many concerns from some investors about increased trade costs with Europe and the volatility of the pound sterling. The main investment partners of the United Kingdom (in terms of FDI stocks) are the United States, the Netherlands, the British offshore islands (Channel Islands and Isle of Man), Luxembourg and France. In 2021 most FDI flows were directed to the scientific and technical services, information and communication, financial services, petrochemicals, and transportation and storage (ONS). According to the latest figures from OECD, in the first half of 2022 FDI inflows to the UK totalled USD 24.2 billion, compared to USD 29.4 billion recorded in the same period one year earlier.
The UK has amended the legal grounds on which the government can intervene in certain mergers under the Enterprise Act. The changes lowered the jurisdictional thresholds for merger review in three specific sectors: artificial intelligence, cryptographic authentication technology and advanced materials. The UK’s National Security and Investment Act 2021 (“NSIA 2021”) entered into force on 4 January 2022. The new law introduced a distinct investment screening regime for companies seeking to gain control of a company or asset in 17 sectors of the economy deemed relevant to the UK’s national security interests (e.g. energy, robotics, defence, AI, transport, communications, etc.). The process for notification will involve an electronic submission to the Investment Security Unit (“ISU”) at the Department for Business, Energy & Industrial Strategy (“BEIS”), which has the power to impose conditions on transactions and even to unwind or block them. Despite the Brexit process, the British economy is resisting: London remains the financial capital of Europe, home to the European headquarters of almost 60% of companies on the Fortune 500 ranking. Furthermore, Great Britain maintains a strong currency, and the country remains one of the most important European consumer markets. According to the latest The Economist’s Business Environment ranking, the United Kingdom occupies the 15th position out of 82 countries.
|Foreign Direct Investment||2020||2021||2022|
|FDI Inward Flow (million USD)||58,237||-71,174||14,093|
|FDI Stock (million USD)||2,656,647||2,689,966||2,698,563|
|Number of Greenfield Investments*||1,025||1,083||1,230|
|Value of Greenfield Investments (million USD)||44,699||62,528||102,355|
Source: UNCTAD, Latest data available.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
|Main Investing Countries||2019, in %|
|UK Offshore Islands||7.4|
|Main Invested Sectors||2019, in %|
|Professional, scientific and technical services||9.0|
|Retails and wholesale trade, repair of motor vehicles and motorcycles||7.3|
|Transportation and storage||6.8|
|Information and communication||6.4|
|Mining and quarrying||6.0|
|Electricity, gas, water and waste||5.6|
Source: Office for National Statistics, Latest data available.
One of the main strengths of the UK economy in attracting FDI is that its economy is one of the most liberal in Europe and its business environment is extremely favourable to FDI :
The main weaknesses of the UK's economy are:
|Country Comparison For the Protection of Investors||United Kingdom||OECD||United States||Germany|
|Index of Transaction Transparency*||10.0||6.5||7.0||5.0|
|Index of Manager’s Responsibility**||7.0||5.3||9.0||5.0|
|Index of Shareholders’ Power***||8.0||7.3||9.0||5.0|
Source: The World Bank - Doing Business, Latest data available.
The UK offers following free trade zones:
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: September 2023