Foreign investment in Germany rose by 50%, Britain overtook the US
Foreign companies invested about 86 billion euros of direct investment in Germany in 2025 — 50% more than a year earlier. The structure of capital inflows changed noticeably: American companies sharply reduced their investments, and the United Kingdom became the largest single foreign investor in the German economy.
This is according to calculations by the German Economic Institute (IW), published on August 31 and based on data from the German Federal Bank.
The growth occurred after a weak 2024, when foreign direct investment in Germany shrank by almost 32%. Despite the substantial recovery, IW warns against assessing the trend only by comparison with one year: direct investment flows can change greatly due to individual large transactions.
Compared with a more stable benchmark, the picture remains positive. The volume of foreign investment in 2025 was almost 11% above the median for 2015–2024.
American investment fell almost 44%
The most noticeable changes occurred in the distribution of capital among countries. American companies invested 11.8 billion euros in Germany in 2025. This is almost 44% less than a year earlier.
As a result, the share of the US in total foreign investment shrank from more than 36% in 2024 to about 14% in 2025.
At the same time, investments from British companies rose sharply. Over the year they increased by roughly 284% and reached 26 billion euros. British investors accounted for almost 31% of all foreign capital directed to Germany.
Thus, the United Kingdom overtook the US and became the largest single foreign investor in the German economy.
More than 80% of investment came from Europe
European countries as a whole maintained their dominant position. European Union states excluding Germany itself invested about 43 billion euros. This is slightly less than the previous year — a decline of 2.7% — yet EU countries still account for more than half of all foreign investment.
If the United Kingdom is added, European countries account for over 80% of all foreign capital entering Germany. IW regards these figures as evidence that Germany's closest and most stable economic ties remain above all with its European neighbours.
Investment from China also grew — roughly 51% — but its absolute volume remained small at just 199 million euros, or about 0.2% of total foreign direct investment.
The German Economic Institute stresses that the published figures may subsequently be revised by the Bundesbank. In addition, annual direct investment volumes can be significantly affected by individual large transactions, so the 50% growth should not automatically be seen as an equally large improvement in Germany's investment climate.
Source: German Economic Institute
