Germany attracted about €86 billion ($99.91 billion) in foreign direct investment in 2025, a 50% increase from the previous year, as a surge in capital from Britain more than offset a sharp decline in investment by U.S. companies, according to calculations by the German Economic Institute (IW) seen by Reuters on Monday.
The increase lifted Germany’s foreign investment inflows to nearly 11% above the median level recorded between 2015 and 2024, signaling a stronger flow of overseas capital into Europe’s largest economy. However, the IW noted that foreign direct investment can fluctuate significantly from one year to another, making a single-year increase an imperfect measure of longer-term investor sentiment.
The composition of the inflows changed significantly in 2025, with Britain emerging as Germany’s largest single source of foreign investment.
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British companies invested about €26 billion in Germany, an increase of roughly 284% from the previous year. Their investment represented almost 31% of total foreign investment into Germany, putting Britain ahead of the United States.
By comparison, investment from U.S. companies dropped nearly 44% to €11.8 billion. The U.S. share of Germany’s total foreign investment fell to around 14% from more than 36% in 2024.
The sharp contrast between British and U.S. investment represents one of the most significant shifts in the geographic composition of capital flowing into Germany in the latest data. It also comes as German policymakers seek to strengthen investment and revive an economy that has faced prolonged weakness, particularly in its manufacturing sector.
The rise in overall FDI suggests that Germany continues to attract substantial international capital even as some major investors reduce their exposure. Yet the concentration of the increase in British investment means the headline 50% growth should be interpreted with some caution.
Investment from other European Union countries remained the largest regional source of capital. Companies from other EU member states invested around €43 billion in Germany, although that was 2.7% below the previous year. Their combined investment accounted for more than half of total foreign investment inflows.
The figures underscore the continued importance of European capital to Germany’s economy and show that the increase in foreign investment was not broad-based across all major investor groups.
Germany has been under pressure to improve its competitiveness after a prolonged period of weak growth, particularly amid high energy costs, elevated operating expenses and challenges facing its export-driven industrial base. Foreign investment can provide capital for new production capacity, technology and jobs, but the composition and destination of those investments will determine how much they contribute to Germany’s longer-term economic performance.
The decline in U.S. investment is notable given the scale of American corporate activity in Germany and the importance of U.S. companies in sectors including technology, pharmaceuticals, manufacturing and financial services. The available figures, however, do not establish the specific reasons behind the decline.
For Berlin, the stronger FDI figures provide evidence that Germany remains capable of attracting international capital, but they also highlight the need to broaden the investor base and ensure that inflows translate into productive investment.
The surge in British investment, meanwhile, gives London a stronger position among foreign investors in Germany, even as capital from the wider European Union remains dominant.