Foreign Direct Investment in the U.K.

Overview by

FDI in Figures

According to the World Investment Report 2010 of the United Nations Conference on Trade and Development (UNCTAD), the United Kingdom is the fifth highest recipient of direct foreign investment (FDI) in the world. In 2008-2009, FDI flow was on the decline and this trend should continue in the coming years. FDI flux decreased sharply since the international financial crisis and should remain low in the coming years.

The UK nevertheless has real strengths: London still seems to be Europe's financial capital. Furthermore, Great Britain has a strong currency and one of the most important European markets.


Country Comparison For the Protection of Investors

  United Kingdom OECD United States Germany
Index of Transaction Transparency* 10.0 6.0 7.0 5.0
Index of Manager’s Responsibility** 7.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 7.0 6.8 9.0 5.0
Index of Investor Protection**** 8.0 6.0 8.3 5.0

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 186,381 91,487 45,676
FDI Stock (million USD) 1,242,949 980,920 1,125,066
Performance Index*, Ranking on 141 Economies 51 78 73
Potential Index**, Ranking on 141 Economies 3 8 -
Number of Greenfield Investments*** 683 873 1,036
FDI Inwards (in % of GFCF****) 37.4 20.5 29.0
FDI Stock (in % of GDP) 44.4 36.8 51.7

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in the United Kingdom

Strong Points
One of the United Kingdoms main strong points is the speed of formalities: only thirteen days are required to set up a company in the United Kingdom, compared to the European average of 32 days, which puts the country in first place in Europe and sixth place in the world. Low taxation makes the environment investor-friendly. London is the world's leader in terms of financial services centers, on a number of key performance indicators and was once again voted best European city by the European Cities Monitor, which studies the appeal of cities .
Weak Points
The country's main weak points are: the financial sector's excessive influence on the GDP, poor quality infrastructures and a high level of competitiveness from foreign companies in the industrial sector.
Government Measures to Motivate or Restrict FDI
Once foreign companies are established in the UK, they are treated exactly like British firms. Within the EU, the British Government is a strong defender of any British registered company's rights, irrespective of its nationality or the nationality of its owner.
Bilateral Investment Conventions Signed By the United Kingdom
The UK has concluded 106 Bilateral Investment Treaties (BITs) with other countries, of which 94 are in force. More information is available on the website of UNCTAD.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Foreign companies establishing British subsidiaries generally encounter no special nationality requirements on directors or shareholders, although at least one director of any company registered in the UK must be ordinarily resident in the UK.
Acquisition of Holdings
In the United Kingdom, a majority holding interest in the capital of a local company is legal.
Competent Organization For the Declaration
Companies house
Find Investment Service Providers in the United Kingdom on

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Investment Opportunities

Investment Aid Agency
Tenders, Projects and Public Procurement
OGC, Government Procurement Service
Tenders Info, Tenders in United Kingdom
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

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