International investment flows strengthened in 2025, with global foreign direct investment reaching approximately $1.6 trillion, according to the latest assessment from UN Trade and Development.

The organization reported that global FDI increased by around 6%, reflecting stronger investment activity in several major markets. However, the recovery was uneven, with developing economies recording considerably slower growth than the global figure.

The latest data highlight an increasingly concentrated international investment landscape in which a relatively small group of economies continues to attract a large share of global capital.

Investment Recovery Remains Uneven

Although global FDI increased, developing economies saw investment growth of only around 2%.

This difference illustrates the challenges faced by emerging and developing countries in attracting international capital. Investors often consider factors such as infrastructure, market size, political stability, access to skilled workers and regulatory conditions when deciding where to allocate funds.

Countries that can offer a combination of these advantages may be better positioned to attract long-term investment.

Major Economies Dominate Investment Flows

UNCTAD data indicate that the world’s 20 largest host economies attracted more than 80% of global FDI.

This concentration means that international investment is heavily focused on a relatively small number of destinations.

Large markets can offer multinational companies access to extensive consumer bases, established infrastructure and sophisticated financial systems. These advantages can reinforce their position as preferred destinations for foreign investors.

Developing Countries Face a Different Challenge

For developing economies, attracting FDI can be particularly important because foreign investment can provide capital for infrastructure, manufacturing, technology and job creation.

However, competition for investment is intense.

Countries seeking to attract multinational companies may need to improve transport and digital infrastructure, simplify business procedures and strengthen the reliability of regulatory institutions.

The quality of human capital is another important factor because modern investment increasingly depends on skilled workers.

Investment Is Changing With Technology

Technological transformation is influencing where companies invest.

Digital services, data infrastructure, artificial intelligence and advanced manufacturing are becoming increasingly important areas for international capital.

Countries with strong digital ecosystems can therefore gain an advantage in attracting technology-focused investment.

At the same time, economies lacking reliable electricity, broadband connectivity or specialized skills may find it harder to participate in these investment flows.

Supply Chains Influence Investment Decisions

Global companies are also reconsidering their supply chains.

Changes in trade policies, transportation costs and geopolitical conditions are encouraging some businesses to diversify production locations.

This could create opportunities for developing economies that are able to integrate themselves into international manufacturing and services networks.

However, capturing these opportunities requires dependable infrastructure and competitive production capabilities.

FDI Can Support Economic Development

Foreign investment can contribute to development in several ways.

New investment projects can create employment, increase production capacity and introduce technologies or management practices. Multinational companies can also connect local suppliers to international markets.

The benefits, however, are not automatic. Governments need policies that encourage investment while ensuring that local economies gain meaningful advantages from international capital.

The Importance of Investment Policy

The latest UNCTAD figures suggest that policymakers need to look beyond the headline global FDI number.

A rise to $1.6 trillion demonstrates that international investment remains substantial, but the concentration of flows shows that many economies are not benefiting equally.

Improving investment conditions, strengthening infrastructure and developing skilled workforces could help more countries participate in future investment growth.

A Concentrated Global Investment Landscape

The latest figures present a mixed picture for the global economy.

Foreign investment is expanding, but the gains remain highly concentrated. With the world’s largest host economies capturing more than four-fifths of global FDI, developing countries face the challenge of creating stronger conditions for long-term international investment.

How governments respond to infrastructure, skills, technology and regulatory challenges could determine whether the next phase of global investment becomes more broadly distributed.