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BRIC economies outpace G7 by over a third in attracting inflows of foreign direct investment

• FDI into BRIC economies up 59% in five years

ASEAN economies win FDI worth 5% of GDP

BRIC economies are outpacing the G7 by more than a third (35%) when it comes to attracting foreign direct investment (FDI), according to a new study by UHY, the international accounting and consultancy network.

According to UHY, total inflows of FDI accounted for 2.3% of the total BRIC nations’ GDP last year. This figure compares to 1.7% of GDP for the G7 and the world figure of 2.2% of total GDP.

Countries are keen to win FDI because it helps power economic growth. As well as boosting job creation and tax revenues, it can act as a spur to competitiveness and productivity through knowledge transfer or investment in improved processes, technologies or infrastructure.

The UHY study looked at FDI inflows last year in 45 major economies around the world, measuring how successful they have been in attracting FDI compared to their GDP. 

Brazil attracted FDI equivalent to 4.2% of its GDP in 2015 and China 2.3%. They also had the third and second largest amounts of FDI in absolute terms (USD 75billion and USD 250billion in total respectively) after the USA (USD 379billion in total).


BRICs economies received total FDI in 2015 of $375 billion – a 59% increase on five years ago in 2010 when the figure was $236 billion.

In this five-year period, China’s absolute total more than doubled – in 2010 it attracted USD 115billion in FDI.

UHY says that BRIC economies are seen as providing better growth opportunities for multinational businesses than the more mature economies of the G7.

In addition, the shift towards locating production facilities in BRIC economies rather than in western countries continues. This is particularly true in countries such as China, where low labour costs, availability of resources and a favourable business climate are key drivers.

Other emerging markets, such as Romania, are also seeking ways to attract more FDI. At the start of 2017, for example, it created a new institution, InvestRomania, to assist foreign companies wanting to invest in the country. However, tax measures introduced by the new government may have a greater impact on consumers than on increasing FDI.

However, Russia saw only 0.5% FDI as a share of its economy (USD 6.5billion in total), as sanctions continue to impact the economy and geo-political tensions deter potential business investment.

Of the G7, Japan and Italy saw the lowest performance with 0% and 0.7% respectively. Germany was also well below the average with just 1.4% (USD 46billion in total). Overall, Europe saw FDI worth 2% of total GDP, slightly below the global average of 2.2% of total GDP.

UHY says that this is likely to be due, in part, to complex company formation processes in Germany which can discourage certain types of foreign investment.

The UK is also lagging well behind the global average, attracting FDI worth just 1.8% of GDP (USD50billion in total) in 2015. Uncertainty following the UK’s Brexit referendum could deter multinational businesses and other foreign investors from investing in the country in the future.


ASEAN economies (Association of South East Asian Nations) outperformed even the BRIC nations in terms of FDI as a share of their economies, attracting FDI worth 5.3% of GDP.

Singapore won FDI worth 22.3% of its GDP (a total of USD 65billion) - likely to be largely due to its status as a significant financial centre allowing it to draw in huge flows of capital as more wealth is created across South East Asia.

Cambodia and Vietnam also performed strongly (9.4% and 6.2% respectively), as they are seen as locations of choice for businesses offshoring production and keen to look beyond China as a destination.

UHY says that the establishment of this new economic community last year is likely to give overseas businesses and other investors increasing confidence about investment prospects as they look to rationalise their operations following the lowering of trade and employment barriers in the region.

Comments Bernard Fay, Chairman of UHY: “Despite the slowdown in emerging markets, BRIC economies are continuing to attract significant amounts of FDI – while the G7 is falling behind.”

“Inbound investment by foreign businesses is a sign of confidence in an economy, providing a boost to business growth, job creation and developments in areas such as innovation and infrastructure.”

“Countries such as China in particular have for some time now been highly focussed on fostering an environment that encourages foreign investment.”

"In Brazil, although the strong economic growth of a few years ago has slowed, the current outlook for economic growth is positive with a strong internal market, the growth of which will be further enhanced by strong levels of FDI."

“G7 economies could benefit from making themselves more attractive locations for foreign investment. One way to do this would be to make their tax regimes more favourable, by lowering corporate tax rates or introducing other incentives for multinationals to establish or expand operations there.”

“ASEAN nations are also punching well above their weight when it comes to winning high levels of FDI relative to the size of their economies. As this burgeoning economic community develops, this could further strengthen investor sentiment in South East Asia. ”

Ella Zhu, partner at UHY member firm, ZhongHua Certified Public Accountants LLP, in China says, “China’s commitment to creating a more open market means they have led the way among developing nations in FDI for two decades now.”

“As the political and legal environment has improved, more multinational companies and foreign businesses have been investing in high-tech, manufacturing and service industries. Since this approach has effectively promoted continuous, fast and healthy development of the national economy, it is unlikely to change in order to keep FDI strong. ”

Hara Nobuyuki, of UHY member firm UHY Tokyo & Co. in Japan says, “FDI in Japan has remained flat since the financial crisis and the Tohoku earthquake disaster, but the government has ambitious plans to double inward FDI stock to 35 trillion yen by 2020.”

“Key to this is the Japan Revitalisation Strategy, which aims to attract inward investment to Japan in a variety of ways. For instance, it will provide incentives, such as tax breaks, fundraising assistance and improvements in patent processes and costs, for new headquarters and R&D bases established here by multinational companies.”

Malta saw the highest FDI as a share of GDP in the study at 25.8% (USD 2.5billion in total), as the island continues to take advantage of its location at the crossroads of Europe, Africa and the Middle East to become an international centre for banking and attract substantial inflows of capital.


inflow of FDI pdf 4


inflows gross domestic product pdf


Notes for Editors

UHY global press contact: Dominique Maeremans on +44 20 7767 2621

Email: -

Nick Mattison or Peter Kurilecz

Mattison Public Relations

+44 20 7645 3636, +44 7860 657 540 or email

About UHY

Established in 1986 and based in London, UK, UHY is a network of independent audit, accounting, tax and consulting firms with offices in over 320 major business centres across more than 90 countries.

Our staff members, over 7,600 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to

UHY is a full member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit