The EU’s net foreign direct investment (FDI) position has strengthened impressively, rising by 16.5 per cent in 2024 compared to the previous year, as reported by Eurostat.
- The EU’s net foreign direct investment (FDI) position has strengthened impressively, rising by 16.5 per cent in 2024 compared to the previous year, as reported by Eurostat.
- This growth is attributed to contrasting trends in FDI stocks. EU investors have increased their holdings abroad, while investments from non-EU residents within the EU have declined.
- Other significant non-EU destinations included Switzerland with €778 billion (8.4 per cent), Brazil at €276 billion (3.0 per cent), and Singapore at €250 billion (2.7 per cent).
This growth is attributed to contrasting trends in FDI stocks. EU investors have increased their holdings abroad, while investments from non-EU residents within the EU have declined.
Foreign direct: Increased Investment Abroad
Investors residing in the EU held €9.30 trillion in net FDI stocks in non-EU countries by the end of 2024, marking a 1.5 per cent rise from €9.16 trillion in 2023. This upward trajectory indicates robust confidence among EU investors in global markets.
Decline in Non-EU Investments
Conversely, the total FDI stocks held by non-EU investors in the EU fell to €7.03 trillion in 2024, down 2.5 per cent from €7.21 trillion in the prior year. This shift suggests a cooling interest from foreign investors in the EU market.
Key Global Partners for EU Investments
The United States and the United Kingdom remain pivotal partners for the EU in terms of foreign direct investment. By the end of 2024, the US accounted for 28.7 per cent (€2.67 trillion) of the total FDI stocks held by the EU outside its borders. The UK followed closely, representing 19.5 per cent (€1.81 trillion).
Other significant non-EU destinations included Switzerland with €778 billion (8.4 per cent), Brazil at €276 billion (3.0 per cent), and Singapore at €250 billion (2.7 per cent).
Non-EU Investment in the EU
On the reverse side, the US held the largest share of FDI stocks within the EU, totalling €2.18 trillion (31.0 per cent). The UK was again a key player with €1.22 trillion (17.5 per cent). Other notable contributors included Switzerland (€630 billion, 9.0 per cent) and the Cayman Islands (€352 billion, 5.0 per cent).
Role of Special Purpose Entities
Special Purpose Entities (SPEs) have continued to be a significant factor in the FDI landscape. As of the end of 2024, SPEs accounted for 29 per cent of total EU FDI stocks held abroad and 34 per cent of the FDI stocks held by the rest of the world in the EU. Their prominence reflects the complexities of international investment flows and the strategic use of entities to facilitate these transactions.
