Europe experienced a robust growth phase characterized by increased project numbers and capital expenditures from 2023 to 2024, . Europe's share in opened Greenfield Foreign Direct Investment (FDI) projects, dominated by Western Europe, rose to 40% in 2024. Despite visible FDI opportunity, Eurozone GDP growth stunted at 0.9% in 2024, with structural issues like low productivity, rapidly increasing bond yields, and energy costs weighing on industrial competitiveness
Despite healthy levels of inward Greenfield FDI recorded in 2024, Europe’s FDI climate is facing the brunt of US levies, weak macroeconomic performance, and prolonged war; these headwinds are explanatory for why opened projects in Europe declined by 44% YoY in H1 2025. Evidently, projects are stalling and/or relocating while investors seek clarity on the new global trade status quo.
As part of a US-UK Economic Prosperity Deal, the UK is subject to a baseline 10% tariff rate, made effective April 5th 2025. Still, goods such as copper, pharmaceuticals, semiconductors, lumber, steel and aluminium are subject to variable higher rates.
Switzerland has been hit with a 39% tariff rate to curtail exports of luxury goods to the US.
The ability of Ursula von der Leyen-President of the European Commission-and Europe more broadly to retaliate is somewhat hamstrung by the region’s dependence on US investment. Europe, unlike emerging economies, is notably less dependent on inward FDI flows with strong intracontinental trade. Still, the US is Europe’s largest greenfield investor, announcing 954 projects (2023-H1 2025), trailed by China with 140 over the same time frame.
In terms of announced projects, Europe’s distribution of inward FDI is relatively equitable among the UK, Germany, France, Spain, Türkiye and Poland. Furthermore, 40% of incoming projects (announced 2020-2024) are in renewable and alternative power, as the UK rejoins the EU’s Carbon Border Adjustment Mechanism and the US pivots back toward petrochemical energy.
Moving forward, The analyst’s FDI team expects current sectoral trends to escalate, whereby international investment in renewable energy becomes more European-centric. Nations across the UK, EU and Schengen area all boast high-skilled labor, a unified regulatory framework, and attractive green credit incentives. However, whether announced investments translate into opened projects and Europe yields the benefits of renewable energy development depends on whether macroeconomic outlooks ameliorate. Strong institutional frameworks will aid development, but without attractive financial incentives and supportive macroeconomic conditions, projects will continue to stall and international investors will look elsewhere.
Despite healthy levels of inward Greenfield FDI recorded in 2024, Europe’s FDI climate is facing the brunt of US levies, weak macroeconomic performance, and prolonged war; these headwinds are explanatory for why opened projects in Europe declined by 44% YoY in H1 2025. Evidently, projects are stalling and/or relocating while investors seek clarity on the new global trade status quo.
To-date:
The EU faces an “all inclusive” 15% tariff rate as part of an EU-US trade agreement signed on July 27th, 2025. The deal effectively halved previously threatened rates (up to 30%) and prevented further escalation. However, copper, steel and aluminum levels remain at 50%.As part of a US-UK Economic Prosperity Deal, the UK is subject to a baseline 10% tariff rate, made effective April 5th 2025. Still, goods such as copper, pharmaceuticals, semiconductors, lumber, steel and aluminium are subject to variable higher rates.
Switzerland has been hit with a 39% tariff rate to curtail exports of luxury goods to the US.
The ability of Ursula von der Leyen-President of the European Commission-and Europe more broadly to retaliate is somewhat hamstrung by the region’s dependence on US investment. Europe, unlike emerging economies, is notably less dependent on inward FDI flows with strong intracontinental trade. Still, the US is Europe’s largest greenfield investor, announcing 954 projects (2023-H1 2025), trailed by China with 140 over the same time frame.
In terms of announced projects, Europe’s distribution of inward FDI is relatively equitable among the UK, Germany, France, Spain, Türkiye and Poland. Furthermore, 40% of incoming projects (announced 2020-2024) are in renewable and alternative power, as the UK rejoins the EU’s Carbon Border Adjustment Mechanism and the US pivots back toward petrochemical energy.
Moving forward, The analyst’s FDI team expects current sectoral trends to escalate, whereby international investment in renewable energy becomes more European-centric. Nations across the UK, EU and Schengen area all boast high-skilled labor, a unified regulatory framework, and attractive green credit incentives. However, whether announced investments translate into opened projects and Europe yields the benefits of renewable energy development depends on whether macroeconomic outlooks ameliorate. Strong institutional frameworks will aid development, but without attractive financial incentives and supportive macroeconomic conditions, projects will continue to stall and international investors will look elsewhere.
Scope
- This reports provides an overview of FDI trends in Europe. The report will also help in unpacking the realities of Europe’s FDI Activity.
Reasons to Buy
- This report will help you to understand the trends of FDI in Europe.
- The report will also help in unpacking the realities of Europe’s FDI Activity.
- Understand the sentiments of investors behind investing in Europe.
- Identify the top sectors and top inward FDI hotspots.
Table of Contents
- Executive Summary
- The Global FDINarrative
- Top Global FDI Hotspots in Q2 2025: Developed vs Developing Markets
- The Europe FDI Narrative
- Inward FDI Hotspots in Europe
- Sectoral Disparities: Unpacking the Realities of Europe’s FDI Activity
- Top Investors
- Appendices
- Methodology
- Contact the Publisher
