Foreign direct investment (FDI) is one of the key indicators of economic development and competitiveness in European Union countries. Attracting capital from abroad helps strengthen national economies, stimulate
business activity, create jobs, encourage innovation and improve countries’ positions in the global market. The greater the volume of productive foreign investment, the more opportunities countries have to modernise their industries, develop infrastructure and support long-term economic growth.
However, the ability to attract international capital varies considerably across the EU. Some member states are particularly successful in attracting investment from within the European single market, while others rely more heavily on investors from outside the European Union. These differences reflect national economic structures, investment policies, business environments and international economic relationships.
According to the latest figures published by Eurostat, nine of the 14 EU countries reporting inward foreign direct investment positions for 2025 received the largest share of their investment from other EU member states. This data is particularly important because it identifies the ultimate investing economy, taking into account complex ownership structures and providing a more accurate picture of where investment capital ultimately originates.
The Czech Republic, Romania and Estonia recorded the highest proportions of foreign direct investment originating from other EU countries. EU investors accounted for 75.1% of inward investment in Czechia, 73.3% in Romania and 64.8% in Estonia. These figures demonstrate the importance of the European single market as a source of capital and highlight the attractiveness of Central and Eastern European economies to investors from neighbouring EU countries.
At the same time, investment from outside the European Union remains an essential component of the economic development of several member states. In five of the 14 reporting countries, non-EU economies accounted for the majority of foreign direct investment. Cyprus stood out particularly strongly, with 79.4% of its inward investment originating outside the EU. Spain, Sweden, Greece and Denmark also recorded substantial shares of non-EU investment, ranging from 51.0% to 55.1%.
These differences illustrate the diversity of investment relationships across the European Union. While some countries benefit primarily from capital circulating within the single market, others have established strong connections with international investors from outside Europe. Both sources of investment can contribute to economic growth, technological development and the expansion of international business partnerships.
For the EU as a whole, attracting foreign direct investment is also an important element of its strategy to maintain global economic competitiveness. In an increasingly competitive international environment, European countries must create favourable conditions for businesses, ensure regulatory stability, develop skilled workforces and support innovation. Competition for international capital is particularly significant as the United States and Asian economies continue to attract major investment projects.
The Eurostat figures therefore offer an important insight into the geography of investment across Europe. They show that the European single market remains a major source of capital for many member states, while international investment from outside the EU plays a particularly significant role in several others. Maintaining a balance between these two sources of financing will be essential for strengthening Europe's economic resilience, attracting new businesses and ensuring sustainable growth in the years ahead. Photo by perzon seo, Wikimedia commons.
