The UK attracted more than 700 Foreign Direct Investment projects in 2025, making it the second most attractive market in Europe – though most of the continent continues to see falling rates of overseas investment, a new study from EY shows. However, London remains Europe’s leading city for tech investment, and bucked that trend, seeing a rise of 5% in 2025.
A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business, in real estate or in productive assets such as factories in one country by an entity based in another country. The cumulative value of FDIs around the world had fallen steeply in the years before the pandemic – crashing to a decade-long low in 2018 – but has been rebounding rapidly since. In 2021, the level of FDIs had already increased to more than $2 trillion, for the first time since 2016.
The UK has among the leading beneficiaries of that rallying market. And while other studies have recently emphasised a slide in the UK’s attractiveness to FDIs, new research from EY suggests the nation remains at the forefront of the continent, when it comes to welcoming overseas funds.
Source: EY European Investment Monitor
The UK secured 730 FDIs across all sectors in 2025 – narrowly behind France’s 852, and ahead of Germany’s 548. This continued a decline in each of those leading markets – having seen 1,194, 985 and 733 deals respectively in 2023.
However, in the technology and IT services sector, the UK leads the way – with 155 FDI projects, ahead of France (104 projects) and Germany (102 projects). This meant that the UK secured around 18% of technology-related FDI projects in Europe last year.
London pride
This is thanks in part to London – which remained Europe’s top city for attracting tech investment, securing 85 projects in 2025 – more than twice the number recorded by second‑ranked Paris. This performance reinforces London’s long‑running dominance as Europe’s leading tech investment hub; over the past five years, the capital has attracted 616 tech‑related FDI projects, more than double the total secured by Paris over the same period.
Source: EY European Investment Monitor
Overall, this helped Greater London outperform the UK and Europe-wide trend, by recording a 5% year-on-year increase in FDI projects in 2025. As a result, the capital is Europe’s leading region for investment for the third successive year.
EY contends that London has been a notable outperformer because of its access to talent, financing opportunities and role as an engine room for the UK’s services economy – underlining its importance as a national investment asset. As the government continues to take steps to prioritise growth, the Big Four firm also argued that “reinforcing regulatory stability and competitiveness will be critical to channelling investment” into strategically important sectors set out in the Modern Industrial Strategy.
Anna Anthony, EY regional managing partner, for the UK and Ireland, said, “Global trade disruption significantly dampened investor confidence last year, reducing FDI levels across Europe and beyond. Against this backdrop, it is encouraging that the UK has retained its position as one of Europe’s leading destinations for investment, particularly in key sectors such as technology and professional services which the government has identified as being central to future national growth.
“The UK remains a highly competitive investment destination, leading Europe in FDI-related job creation and attracting capital from a diverse global investor base.”
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