By COMFORT OGBONNA
Foreign direct investment in Germany rose by about 50% in 2025, driven largely by a sharp increase in investment from British companies that more than offset a steep decline in capital coming from the United States.
Foreign companies invested about €86 billion ($99.91 billion) in Germany last year, based on foreign direct investment transaction data from the country’s central bank, according to calculations by the German Economic Institute.
The 2025 figure was nearly 11% higher than the median annual level recorded between 2015 and 2024, although foreign direct investment can vary significantly from one year to another depending on major corporate transactions, economic conditions and investment decisions.
The composition of foreign investment in Germany changed substantially last year, with Britain emerging as the country’s largest individual source of foreign capital.
British companies invested about €26 billion in Germany in 2025, an increase of approximately 284% from the previous year. The surge meant Britain accounted for nearly 31% of total foreign investment inflows into Germany, overtaking the United States as the largest single-country source.
By contrast, investment from U.S. companies fell by almost 44% to about €11.8 billion in 2025.
The decline significantly reduced the United States’ share of foreign investment in Germany. U.S. companies accounted for more than 36% of total inflows in 2024, but their share fell to roughly 14% last year.
The shift highlights changes in the sources of foreign capital flowing into Europe’s largest economy, even as Germany continues to attract substantial investment from international companies.
Other European Union countries remained an important source of capital. Companies from EU member states invested approximately €43 billion in Germany in 2025, accounting for more than half of total foreign investment inflows despite a 2.7% decline from the previous year.
The figures suggest that Germany continued to attract significant international investment despite economic challenges that have weighed on the country’s industrial sector and broader growth outlook.
The sharp rise in British investment was particularly notable because it came despite Britain’s departure from the European Union. British companies were responsible for a larger share of foreign investment in Germany than companies from any other individual country during the year.
The increase may reflect a combination of corporate investment decisions and large individual transactions, meaning annual figures should be interpreted with caution. Foreign direct investment flows can fluctuate considerably depending on mergers, acquisitions, restructuring and other major business transactions.
Germany remains a major destination for international companies because of its large industrial base, skilled workforce, infrastructure and access to the wider European market.
However, businesses operating in the country have also faced high energy costs, weak industrial demand, geopolitical uncertainty and concerns about Germany’s long-term competitiveness.
The overall increase in foreign investment therefore provides a mixed picture. While the jump in inflows indicates continued international interest in the German economy, the sharp decline in U.S. investment and heavy dependence on large changes in investment from individual countries underline the volatility of annual capital flows.
The data also show the continued importance of European investors to Germany’s economy. Even with the modest decline from other EU countries, their combined investment remained substantially larger than the amount invested by any individual non-European country.
Germany’s ability to maintain and expand foreign investment will remain important as companies assess where to locate production, technology, research and other long-term operations.
The 2025 figures indicate that foreign investors continued to commit significant amounts of capital to Germany, but the sources of that investment shifted considerably, with Britain playing a much larger role and U.S. companies contributing far less than they did a year earlier.
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