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Ranked: The Largest Recipients of Foreign Direct Investment (FDI) In 2020

Ranked: The Largest Recipients of Foreign Direct Investment (FDI) In 2020

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With new data and analysis showing that worldwide FDI flows plummeted after 2019, was interested to see which countries were able to push past the global trend and become the largest recipients of foreign direct investment in 2020.

What is an FDI?

Put simply, a foreign direct investment is a financial overseas investment made by either a company or individual from one country to another one.

For the investment to count under this term, the foreign investor (again, either a person or firm) must hold at least 10% of the company where the investment is made, otherwise, it would just be categorised as part of their stock portfolio.

Countries with the most FDI in 2020

In the top spot for FDI inflows in 2020 is China. Throughout the year, this country was the recipient of $212.5 billion. This is 14% more than in 2019, where the figure stood at $187.2 billion.

Whilst the United States is in second place for the most FDI inflows in 2020 (sitting at $177.1 billion), it took a nosedive in relation to the previous year. In 2019, the USA was the recipient of $282.1 billion which means there was a year-on-year decrease of 37%.

In 2020, India (where citizens are most in favour of a cashless society) received $64.4 billion in FDI which is more than a quarter increase on the figure in 2019 of $50.6 billion. This places it firmly in number three of this ranking of largest recipients of foreign direct investment.

Although Germany had a year-on-year decrease of 34%, it is still fourth in the global rankings of FDI inflow. This nation recorded $35.6 billion in inbound investments during 2020, placing it firmly above Ireland and Mexico.

In contrast, Sweden and Israel both had an increase in inflow when it came to FDI from 2019 to 2020. In terms of the greatest overall FDI inflow, Sweden just beats Israel with $26.1 billion to $24.8 billion.

Joining Israel in joint ninth place is Brazil. Although they both received the same amount of FDI inflows ($24.8 billion), Brazil recorded a decrease of 62% from the previous year, where the total was a mighty $65.4 billion – almost two-thirds less year-on-year.

Completing the top 10 countries with the most foreign direct investment inflow in 2020 is Canada. This North American country falls just short of the ninth spot with $23.8 billion FDI inflows which shows a decrease of 50% from the previous year.

The biggest changes from 2019 to 2020

The biggest year-on-year increase goes to Luxembourg. In 2019, 14.8 billion dollars FDI was recorded whereas, in 2020, the number rises to $62 billion – this is an increase of 319%! With the nation being the second wealthiest in the world in terms of Gross Domestic Product (GDP) per capita, it’s not hard to see why so many investments are being made into the country.

Belgium also experienced a massive increase. In 2019, there was $2.9 billion worth of foreign direct investment whereas this rose to $8.4 billion in 2020, making this a 190% increase.

Other countries with a year-on-year increase are Sweden (158%), Israel (31%), Hungary (8%) and Spain (5%).

The biggest decrease in FDI inflow from 2019 to 2020 is Finland. In 2020, the figure stands at $2.6 billion which is 81% less than 2019’s $13.5 billion – a decrease of over four-fifths. This may be somewhat surprising considering the FDI regulations are less stringent across many sectors than in other Nordic-Baltic countries.

Russia is another country that had a loss of foreign direct investment inflow. There was a total decrease of 70% as 2020 produced a figure of $9.7 billion, over two-thirds lower than the $32.1 billion in 2019.

Denmark, Brazil and Lithuania are all countries with a year-on-year decrease within 60%. The highest in this group is Denmark with a whopping 67% decline from the $3.6 billion recorded in 2019 to $1.2 billion in 2020 whilst Lithuania had $1.2 billion reduced to $478 million.

Advantages and disadvantages of foreign direct investment

Interested in the results from this study, we investigated the reasons why some countries had such an increase in FDI inflows whilst others saw massive decreases.


Both the investor and the foreign host country can benefit from foreign direct investment. These incentives are there to encourage FDI and for the process to be equally beneficial to both parties.

The following are some of the advantages for the investing businesses and host country:

  • Diversification of the market
  • Tax incentives
  • Stimulation of the economy
  • Increased employment opportunities
  • Labour costs are lower
  • Tariff preferences

Most of these advantages are focused on cost-cutting and risk-reduction for organisations whilst the benefits for the host countries are mostly economic.


In most countries, specific legislation is in place to maximise the advantages and minimise the disadvantages of the practice. However, there are a few drawbacks that still remain, regardless of domestic policies or international agreements, including:

  • Local companies are being displaced
  • Repatriation of profits

If large corporations enter into the market of a new country, it may displace local companies. Smaller businesses may struggle to keep up and will ultimately be unable to operate at the rate they did prior to the investment.

As well as this, there is the chance that the investing company will not reinvest profits in the host country, meaning there are large capital outflows from the host country. Because of this, many countries have created legislation that restricts foreign direct investment and profit repatriation.

Full results


  1. were keen to discover which countries in the world benefited the most from foreign direct investment (FDI) in 2020, so analysed the latest data from ‘Organisation for Economic Co-operation and Development’ (OECD).
  2. For the research, focused on FDI inflows (also known as ‘inward FDI’), as this type of FDI measures investments made in a country from another country.
  3. From the OECD data, identified the FDI inflows figures recorded for the four quarters in 2020 (Q1 – Jan to Mar 2020, Q2 – Apr to Jun 2020, Q3 – Jul to Sep 2020 and Q4 – Oct to Dec 2020) and then added them together to establish a collective and definitive FDI inflows figure for a whole 12-month period (which was January to December 2020).
  4. Stage three was individually done for 37 different countries from around the world in the research.
  5. Once the overall FDI 2020 inflows figure for each of the 37 countries in the research was established, the countries were ranked from highest to lowest based on the overall FDI inflows financial value/figure for 2020.
  6. For further in-depth analysis and comparison, stage three and four were repeated but this time in the context of 2019 data/figures.
  7. Thereafter, the overall FDI inflows figures for 2019 were compared against the overall FDI inflows figure for 2020 to establish if year-on-year inward FDI had increased or decreased in each of the assessed countries. 
  8. All financial values in the research are presented in American Dollars ($ USD).
  9. To make the FDI inflows financial values more digestible, rounded the figures to the nearest one hundredth.
  10. Austria, Italy, Netherlands, Norway, Slovak Republic, Switzerland and Saudi Arabia were excluded from the research because they experienced negative FDI inflows in 2020 or data for the respective countries was incomplete/unavailable.
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