Official Statistics

DBT inward investment results: technical annex

Published 27 June 2025

1. Preface

This technical annex has been published to accompany the Department for Business and Trade (DBT) inward investment results for projects landing between 5 July 2024 and 31 March 2025. It aims to provide technical details to help interpret the statistics.

The statistics include the estimated jobs created as an outcome of these investments and also the estimated economic impact. The investments are all foreign direct investment (FDI).

This annex outlines the definitions, data collection process, eligibility and validation process that underpin the publication.

2. Definitions

This section outlines what FDI is, its benefits to the UK economy, the 3 main measures of FDI and types of FDI projects.

2.1 FDI

From a UK perspective, inward FDI is an investment from a foreign investor into a UK enterprise. The UK entity then becomes an affiliate enterprise, which is either a subsidiary, branch, or an affiliate company of the parent company – the foreign investor. In practical terms a foreign company can either set up a version of itself in the UK, or can acquire/merge with an existing UK company.

The parent company needs to own at least 10% of the shares or voting power in the UK entity for it to classify as FDI. Direct investments include the initial operation establishing the relationship between the 2 units, and also all later capital operations between them and between related institutional units, whether incorporated or not.

FDI is considered to deliver economic benefits to the UK by improving economic competitiveness and enabling improvements in productivity for both new and existing firms. FDI can create an important positive contribution to an economy by generating employment and increasing tax revenue. It can also provide external resources such as capital, technology and managerial know-how that can substantially aid productivity and economic growth.

2.2 Measures of FDI

There are 3 main measures of FDI:

• FDI flow
• FDI stock
• FDI projects

FDI flow

FDI flows measure the net movement in inward direct investments made during a given reference period. 

FDI flows comprise of:

• acquisitions or disposals of equity capital (which includes mergers and acquisitions)
• reinvested earnings
• inter-company debt

FDI stock

FDI stock measures the total financial value of FDI in the UK at a point in time.

FDI stock has the following main components:

• foreign companies’ share capital and reserves
• net amount due to foreign parents on the inter-company account
• net amount due to foreign parents on the branch head-office account

FDI stock is a statistical measure that is directly linked with the FDI flow. The annual FDI flow contributes to the change in the inward FDI stock.

FDI projects

Investment promotion agencies, including DBT, are focused on and measure their operational performance based on the number of specific individual investment decisions, or FDI projects. FDI projects can be recorded at any point in their journey, and DBT have various tests to validate that the volume of unique FDI projects which land in a reporting period are accurately recorded (see sections 3 and 4).

2.3 Types of FDI projects

FDI can come in different forms depending on the characteristics of the investment project and the nature of actual engagement of the investor in the UK.

For the purposes of DBT definitions and this publication, the 3 types under which FDI projects are categorised are:

• new investments
• expansions on an existing investment (includes retentions)
• mergers and acquisitions (M&As) (includes joint ventures)

New investment projects

A type of FDI where a foreign investor starts a new business by establishing a new entity. This could be setting up new offices, buildings or production/operational facilities in the UK. This type of investment directly contributes to capital formation through new capital expenditures, increases the output and generates employment and other benefits. New investments can be made by either an existing investor or a new investor.

Expansion investment projects

A type of FDI where an existing investor expands the production or operational facilities of an existing UK foreign direct enterprise with additional investments.

Retention investment projects

A type of investment where a foreign investor agrees to make an additional investment in an existing foreign direct enterprise. The purpose is to prevent the enterprise from rationalisation or closure.

M&A projects

A type of FDI made by foreign investors to either merge with or acquire at least 10% of existing equity or assets of an existing UK company. A merger occurs when 2 or more companies agree to merge into a new single company rather than remain separated for creating business synergies. An acquisition is a transaction between 2 companies by which the acquiring company purchases the existing assets and liabilities of the target company.

M&As are a common mechanism for entering a new market and are usually followed by new additional investments.

Joint ventures

Agreements between a foreign enterprise and an existing UK enterprise to invest in a joint project. These are usually short-term focused.

3. Methodology and production

This includes methods of data collection, project eligibility and DBT’s involvement in foreign investors investing and re-investing in the UK.

3.1 Data collection

As the government department responsible for the promotion and facilitation of inward investment, DBT aims to record and report information on all FDI projects that successfully land in the UK. This includes projects supported by the DBT network teams and those which land without the DBT network’s support. DBT aims to capture all FDI projects which meet the DBT definitions and standards and can be validated as having landed in the reporting period.

The new jobs created through FDI are estimates over a 3-year period. Job numbers are sourced from interactions with businesses and public announcements, and, in the case of projects which DBT did not support, estimated in external databases as referenced below. For more information, see their associated products.

3.2 DBT support for investment projects

One of DBT’s key ambitions is to generate increased international awareness of the benefits of investing in the UK and provide information and advice to investors, both in the UK and overseas. This helps them prosper and succeed in investing and re-investing in the UK. DBT collaborates with the devolved administrations and local partners to achieve this.

For a project to be recorded as supported by DBT, there must be sufficient evidence that the DBT network has provided substantive assistance to the foreign investor in the delivery of the investment project. There must be evidence that the assistance and advice was essential for the delivery of the investment project in the UK. Where no substantive assistance has been provided to land a project into the UK, the project is recorded as a success occurring without DBT support, validated and quality assured.

Process for DBT-supported projects

Data and information related to the projects supported by DBT are self-reported by the DBT network on an internal database. All parties involved in a project are responsible to enter the necessary data on the system following agreed operating principles and eligibility criteria.

Process for FDI projects which have not been supported

DBT network teams also use the local sources available to them (such as media and events) to identify and record projects emerging from their source markets or in their sectors which have not been supported by DBT. Additionally, DBT centrally compares its internal database with fDi Markets – the Financial Times’ database of cross-border greenfield investments.

Projects which have not previously been supported or recorded by DBT are identified and validation tests are carried out to determine whether they can be classified as FDI.

3.3 FDI project eligibility

Projects that meet the following criteria are validated as an FDI project:

1. There must be a new, additional financial investment in the UK foreign direct enterprise as part of the FDI project. Each FDI project must demonstrate it is bringing in some financial investment into the UK.
2. To qualify as an FDI project, the foreign ownership or voting power in the UK company as a result of the new equity investment must be at least 10%.
3. The business activities supported by the investment project are expected to last at least 3 years. DBT supports those investments that create or expand long term businesses in the UK.
4. New investments or expansions must create one or more new permanent (such as those expected to last for at least 2 years) jobs in the UK. Total jobs expected to be created or safeguarded in the UK cover the first 3 years of each project.
5. (Applicable only for retention and M&A projects claiming safeguarded jobs) There must be sufficient evidence that without new additional investment the UK based company would potentially reduce its production capacity, and/or employment level. This could ultimately result in the closure of the UK business.

Projects that are characterised by any of the following elements are not treated as an FDI project for the purposes of this publication:

• a project that does not involve new (or additional) financial investments or capital expenditure
• a project that has short term business objectives (for example, less than 3 years), which do not make it qualify for the ‘lasting interest’ test of the FDI definition
• contract agreements, collaboration and partnerships (except when they involve research and development (R&D)) that do not involve any financial investment and creation of new businesses for production of goods or services in the UK
• franchise contracts under which a UK company will sell or provide products or services produced by a non-UK entity
• investment in UK residential property (such as purchasing houses or flats in London) without creation of new long-term businesses and associated jobs in the UK

4. Validation

This section outlines the validation process prior to confirmation as an inward investment success.

4.1 Validation and accuracy

All projects, including those DBT has not supported, undergo an independent validation process prior to confirmation as a success for official reporting in the DBT inward investment publication.

Along with confirming the eligibility of projects, additional objectives of the validation process are to ensure that investment projects are genuine. The robustness, accuracy and consistency of the project data reported by the DBT network is also assessed. The tests applied on each project in the main validation stage are mapped out below.

FDI project verification tests

1. The UK foreign direct enterprise must be occupying or legally committed themselves to taking premises in a specific physical business address. This is sourced through confirmation of the UK business address on the company’s website or through official documentation.
2. There must be evidence that the investment funds have been secured, that at least one person is working or is in the process of being recruited to work. The activities planned as a result of the investment should have commenced. Evidence is sourced from public announcements, investor confirmation, or through a note from the DBT officials’ visit to the UK company site.

In addition to the main validation process, prior to publication, a quality assurance exercise takes place whereby checks are performed to ensure consistency, accuracy, and to identify any irregularities within the data set.

5. Technical notes for publication

This covers the timing of the data and methodology for estimating an FDI project’s gross value added (GVA).

5.1 Timing of projects landing

Projects which underpin this publication landed (that is revenue generating activities commenced) in the UK between 5 July 2024 and 31 March 2025.

5.2 Estimate for GVA

Using DBT’s analysis into the economic impact of FDI, DBT has developed estimates for the GVA associated with the DBT-supported FDI projects. This allows us to demonstrate a broader understanding of the economic value of projects supported by DBT, to contribute to wider government initiatives and DBT’s overall objective for stimulating economic wealth creation.

Estimates are made by applying the sector specific multipliers detailed in DBT’s research report to either the number of new jobs generated from FDI projects or the capital expenditure invested by the FDI projects. This is determined by whether a sector is deemed as labour intensive or capital intensive. Full detail is available in the research report.

There is complete coverage with the number of jobs recorded for FDI projects as it is a requirement for project eligibility. However, data on capital expenditure is not complete due to some foreign investors withholding the information. It was possible to estimate the economic impact for around 96% of projects in this publication. This means the estimated impact published is the minimum level of GVA expected over 3 years.