Foreign direct investment (FDI) stocks in the European Union continued to decline in 2025, although the United States and the United Kingdom remained the bloc’s largest investment partners, both as destinations for European capital and as sources of inward investment.
The figures represent accumulated investment positions at the end of the year, rather than new capital entering or leaving the EU during 2025. This distinction matters because changes in investment stocks do not directly reflect annual investment flows.
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Inward investment stocks have been declining since 2022, when holdings by non-EU investors reached €7.88 trillion, their highest level since 2013.
Special-Purpose Entities Retain A Significant Share
Special-purpose entities (SPEs) accounted for 26.2% of EU outward FDI stocks and 33.3% of inward stocks held by non-EU residents at the end of 2025.
These legal entities are primarily used to facilitate financial transactions and investment structures rather than conduct substantial operational activities, highlighting the role of corporate and financial arrangements in cross-border investment.
US And UK Lead As Investment Destinations
The United States remained the largest destination for EU investment outside the bloc, accounting for €2.79 trillion, or 29.4% of outward FDI stocks. The United Kingdom ranked second at €1.88 trillion (19.8%), followed by Switzerland with €812 billion (8.6%).
Other major destinations included Brazil (€310 billion), Canada (€246 billion), the Cayman Islands and Mexico (2.4% each), China excluding Hong Kong and Singapore (2.3% each), and Bermuda (2%).
US Remains The Largest Source Of Investment
The United States was also the leading source of foreign investment within the EU, with €2.08 trillion, representing 29.7% of inward FDI stocks. The United Kingdom followed with €1.26 trillion (18.1%), while Switzerland accounted for €602 billion (8.6%).
Other significant sources included the Cayman Islands (€323 billion, 4.6%) and Japan (€249 billion, 3.6%). Singapore represented 3.5% of inward stocks, Canada 3.2%, Bermuda 2.8%, while Gibraltar and Jersey each accounted for 2.1%.
Investment Ties Remain Concentrated
The figures underline the importance of the United States and the United Kingdom to the EU’s international investment relationships. Both remain its leading partners in terms of outward and inward FDI stocks, alongside Switzerland and several major financial centres.
