UNCTAD’s World Investment Report 2026, released July 2026, delivers the most comprehensive analysis of global FDI trends, investment policy evolution, and strategic sector competition in an era of geopolitical turbulence.
The headline: global FDI inflows rose 6% to $1.62 trillion in 2025. Beneath that surface, however, lies a story of extreme concentration — by country, by sector, and by income group. Low-income countries captured just 2% of global manufacturing greenfield investment. Investment screening mechanisms doubled since 2019 to 52 economies. And five strategic sectors now command 44% of global greenfield investment, up from 16% in 2020.
Chapter 1: Global FDI Trends — The K-Shaped Recovery
1.1 Aggregate Flows: Modest Growth, Deep Divergence
Global FDI inflows reached $1.62 trillion in 2025, a 6% increase over 2024 — the second consecutive year of recovery from the 2023 trough, yet still well below the 2021 peak of $1.78 trillion. Outflows surged 13% to $1.86 trillion.
Table 1: Global FDI Flows, 2020–2025
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | YoY Change |
|---|---|---|---|---|---|---|---|
| FDI Inflows ($B) | 863 | 1,777 | 1,437 | 1,321 | 1,532 | 1,624 | +6% |
| FDI Outflows ($B) | 465 | 1,885 | 1,535 | 1,227 | 1,651 | 1,864 | +13% |
Table 2: FDI Inflows by Economy Type ($B)
| Economy Group | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Developed Economies | 233 | 887 | 518 | 463 | 649 | 723 |
| Developing Economies | 630 | 891 | 919 | 858 | 883 | 901 |
| — China | 149 | 181 | 173 | 177 | 160 | 105 |
| — Singapore | 71 | 126 | 136 | 127 | 136 | 151 |
| — Brazil | 38 | 47 | 74 | 63 | 89 | 66 |
| — India | 64 | 45 | 49 | 28 | 27 | 39 |
Key Findings:
- China’s FDI inflows collapsed — from $177B in 2023 to $105B in 2025, a decline exceeding 40%, marking one of the lowest levels in two decades.
- The United States regained dominance, propelled by massive industrial policy packages (CHIPS Act, IRA).
- Singapore defied gravity — $151B in inflows, becoming the top FDI destination among developing economies.
- India remained subdued — just $39B, a cumulative decline of nearly 40% from its 2020 peak of $64B.
1.2 Structural Shifts in FDI Composition
Table 3: FDI by Entry Mode ($B)
| Mode | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Announced Greenfield (~) | 600 | 700 | 900 | 980 | 810 | 807* |
| Cross-border M&A Net Sales (~) | 390 | 530 | 630 | 460 | 835 | 630 |
*Excluding strategic sectors (semiconductors, AI infrastructure, critical minerals, etc.).
Greenfield investment in traditional manufacturing declined 17% by value and 31% by project count. Cross-border M&A at ~$630B remained elevated but below 2024 levels, concentrated in tech, energy, and pharma mega-deals.
1.3 Regional Divergence
Table 4: FDI Inflows by Developing Region ($B)
| Region | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Developing Asia | 528 | 654 | 676 | 613 | 626 | 655 |
| — East Asia | 282 | 317 | 273 | 247 | 233 | 251 |
| — Southeast Asia | 123 | 177 | 191 | 174 | 187 | 214 |
| — South Asia | 70 | 51 | 56 | 34 | 34 | 46 |
| Latin America & Caribbean | 81 | 105 | 168 | 162 | 178 | 167 |
| Africa | 34 | 76 | 38 | 46 | 47 | 52 |
Southeast Asia captured 80%+ of developing Asia’s manufacturing shift: Vietnam ($20.4B), Malaysia ($15.4B), Indonesia ($21.4B), Thailand ($19.1B). South Asia beyond India remained negligible — Bangladesh $1.8B, Pakistan $1.9B.
1.4 The SDG Investment Gap
UNCTAD pegs the annual investment gap for SDG-related sectors in developing countries at roughly $4 trillion. International project finance for SDG sectors reached ~$480B in 2025 — covering only 12% of the need.
Table 5: SDG Investment Needs vs. Reality ($B)
| SDG Sector | Annual Need | 2025 Intl. Investment | Gap Rate |
|---|---|---|---|
| Clean Energy | 1,500 | ~250 | 83% |
| Infrastructure | 1,200 | ~150 | 88% |
| Food Security & Agriculture | 300 | ~20 | 93% |
| Water & Sanitation | 200 | ~15 | 93% |
| Health | 400 | ~30 | 93% |
| Digital Infrastructure | 400 | ~50 | 88% |
Chapter 2: Investment Policy — The Rise of the Screening State
2.1 Record 229 Policy Measures in 2025
Table 6: 2025 Investment Policy Measures
| Type | Count | Share | Characteristics |
|---|---|---|---|
| Liberalization / Promotion / Facilitation | ~130 | 57% | More selective; dominated by incentives |
| — of which Incentives | ~115 | 50% | Clean energy, digital, advanced manufacturing, critical minerals |
| — of which Facilitation | ~15 | 7% | Digital government tools, streamlined approvals |
| Restrictive / Regulatory | ~99 | 43% | National security screening expansion |
| Total | 229 | 100% | — |
Developing Asia was the most active policy region, followed by Europe. All liberalization measures originated in developing countries (concentrated in services). Among restrictive measures, developed economies drove screening expansion; developing economies tightened incentives and local-content requirements.
2.2 National Security Screening: 26 → 52 Economies
The most dramatic policy shift. Economies with dedicated FDI screening mechanisms doubled from 26 (2019) to 52 (2025).
Table 7: Screening Volume in Selected Economies
| Economy | 2015 | 2020 | 2024 | Growth |
|---|---|---|---|---|
| Japan | 491 | ~1,200 | 2,903 | +491% |
| Italy | 18 | ~200 | 835 | +4,539% |
| United States | 143 | ~190 | 325 | +127% |
| France | 76 | ~100 | 331 | +336% |
| Canada | 659 | ~780 | 1,128 | +71% |
| Germany | — | ~80 (2019) | ~310 (2025) | — |
| Netherlands | — | ~20 (2019) | ~80 (2024) | — |
| Spain | — | ~50 (2020) | ~150 (2025) | — |
Screening outcomes: Rejection rates remain below 1% of all filings. However, among in-depth reviews, rejection rises to 4.8% and conditional approval to 17.6%. The chilling effect — compliance costs, uncertainty, admin burden — far exceeds formal rejections.
Table 8: The Expanding Scope of National Security
| Era | Core Driver | Scope | Landmark Legislation |
|---|---|---|---|
| Pre-2005 | Defense, privatization safeguards | Military tech, defense contracts | US Exon-Florio (1988) |
| 2005–2014 | Rise of SOEs / state-linked investors | Critical infrastructure (energy, telecoms, transport) | Canada ICA (2009), Russia Strategic Sectors Law (2008) |
| 2015–2019 | Tech capability + economic security | Emerging tech, cybersecurity, advanced manufacturing, R&D | US FIRRMA (2018), EU FDI Screening Framework (2019) |
| 2022–2025 | Geopolitics + future industries + economic security | AI, semiconductors, quantum, data centers, critical minerals, supply chain bottlenecks | UK NSI Act (2022), EU Framework Reform (2025) |
2.3 Outward Investment Screening Rises in Parallel
Outward investment controls are no longer a developing-country tool. Both the US and EU have introduced or expanded outward screening — targeting AI, semiconductors, and other sensitive technology transfers. The ASML case demonstrates how export controls and outward investment reviews can shape production and investment decisions far beyond a single jurisdiction.
2.4 International Investment Agreements (IIAs): Reform Underway
Table 9: IIA Key Statistics
| Indicator | Data |
|---|---|
| New IIAs signed in 2025 | 44 (24 BITs, 20 TIPs) |
| Total IIAs globally | 3,369 |
| IIAs currently in force | ~2,600 |
| Signed before 2010 | 85% |
| New agreements with facilitation/cooperation provisions | 77% |
| New agreements with protection provisions | 62% (declining) |
| New agreements with ISDS | ~58% |
| New agreements with national security exceptions | ~90% (post-2020) |
| Cumulative ISDS cases | 1,463 (56 new in 2025) |
| ISDS cases targeting developing countries | ~80% |
| Critical minerals-related disputes | ~1/3 |
At least 131 ISDS cases (1987–2025) involve security-related issues: security restrictions (4), economic sanctions (33), conflict/civil unrest (45), economic crises (55). Notable recent cases include Huawei v. Sweden and Fridman v. Luxembourg.
No comments yet