Foreign investment remains a cornerstone of economic growth, innovation, and employment across Europe. When multinationals establish factories, research centres, or regional headquarters, they inject capital, create jobs, and integrate local suppliers into global value chains. Governments across the continent compete fiercely for these projects, offering tax breaks, streamlined regulations, and high-profile investment summits.
France has made this a strategic priority under President Emmanuel Macron. Since 2018, the "Choose France" initiative has courted international capital with annual summits at the Élysée Palace. At this year's event, Macron announced that foreign companies had pledged investments worth €93 billion—a record, according to the Élysée. Yet the broader picture across Europe is less rosy.
Europe's Investment Landscape in 2025
According to the latest EY Europe Attractiveness Survey, which tracks the number of individual investment projects rather than volatile financial flows, Europe recorded 5,026 new projects in 2025—a 7% drop from 2024 and the lowest figure in 11 years. The decline was widespread, but some countries bucked the trend.
France retained its top spot with 852 projects, despite a 17% year-on-year fall—the steepest among major destinations. The United Kingdom came second with 730 projects (down 14%), and Germany third with 548 (down 10%), its lowest since 2009. Germany's long-term trajectory is particularly worrying: compared with 2019, its project count has plummeted 44%, far worse than France's 28% or the UK's 34% decline.
Spain and Turkey emerged as bright spots. Spain jumped to fourth place with 383 projects, a 20% increase, while Turkey followed closely with 376 projects, up 7%. Poland continued its upward march, recording 285 projects (up 10%), securing sixth place. The Netherlands also posted growth, with 159 projects (up 8%).
Italy, Belgium, and Portugal saw declines: Italy fell 8% to 206 projects, Belgium dropped 11% to 187, and Portugal slipped 5% to 186.
Who Is Investing in Europe?
The United States remained the largest external investor, with American companies announcing 943 projects across Europe. German firms were the second-largest source, but their intra-European investment fell sharply—484 projects, down 24% from 2024. Despite this, Germany remained Europe's top intra-European investor, with France as its primary destination (101 projects). Turkey ranked second for German investment for the first time, ahead of the UK.
On a global scale, Europe's share of foreign direct investment (FDI) is shrinking. UNCTAD's World Investment Report 2025 shows global FDI fell to $1.49 trillion in 2024, an 11% decline. Europe attracted only $182 billion, a staggering 58% drop from $439 billion the previous year. By contrast, North America saw FDI rise 23% to $343 billion, and Asia remained the largest recipient with $605 billion (down just 3%). These figures exclude conduit economies like Luxembourg, the Netherlands, and Ireland to avoid distortions from holding-company structures.
Why the caution? EY points to weak economic growth across much of Europe, high energy prices, geopolitical uncertainty, and a cautious corporate climate. Trade tensions and the threat of new tariffs are adding further pressure. For a continent that prides itself on openness, the challenge is clear: Europe must sharpen its competitive edge or risk losing ground to faster-growing regions.
