1. Main points

  • This article explores the role of companies with foreign direct investment (FDI) links in making capital investments in the UK. 

  • Companies with FDI links accounted for just over half (51.5%) of the respondent acquisition values in 2021, with the other 48.5% by companies with no FDI links. 

  • In 2021, companies with outward FDI links accounted for 19.7% of reported capital acquisitions values in the UK, compared with 18.7% for companies with both inward and outward links, and 13.2% for those with inward links. 

  • Microdata analysis suggests that there were more than twice as many capital acquisitions by companies without FDI links than there were by those with FDI links in 2021; however, the average value per acquisition was three times higher for companies with outward FDI links compared with companies having no FDI links.  

  • Companies with FDI links accounted for more than half of reported capital acquisitions values in five industries in 2021, which included electricity, gas and water supply and retail, transport and accommodation. 

  • New construction, computer hardware, purchased computer software, and other machinery and equipment were the main assets where companies with FDI links accounted for more than half of the reported totals in 2021.

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3. Foreign direct investment and capital acquisitions data

Annual gross fixed capital formation by industry and asset
Dataset | Released 28 October 2021
Annual estimates of gross fixed capital formation (investment) by industry and asset, in current prices and chained volume measures, consistent with the UK National Accounts. 

Foreign direct investment involving UK companies (directional): inward
Dataset | Released 23 January 2023
Annual statistics on the investment of foreign companies into the UK, including for investment flows, positions and earnings. 

Foreign direct investment involving UK companies (directional): outward
Dataset | Released 23 January 2023
Annual statistics on the investment of UK companies abroad, including for investment flows, positions and earnings.

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4. Glossary

Foreign direct investment (FDI) 

Foreign direct investment (FDI) is cross-border investment made with the objective of establishing a lasting interest in the host economy. FDI is also defined by control relationships, where the direct investor (parent company) controls at least 10% of the voting power (ordinary shares) of the direct investment enterprise. These relationships can be measured in two directions: 

  • outward: the direct investments of UK-resident companies in other countries 

  • inward: the direct investments in the UK from non-resident companies 

Capital asset 

A capital asset is a piece of property, such as a building, transport equipment, computers, plant and machinery or intellectual property such as software. For businesses, these are typically held for longer than one year and allow it to operate in the production, delivery or sale of goods and services.

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5. Data sources and quality

Data sources 

The results in this article identify companies that responded to the Quarterly Acquisition and Disposal of Capital Assets Survey (QCAS) by type of foreign direct investment (FDI) link using the FDI populations. The target population for QCAS is every business in the UK, while the populations for FDI are every company in the UK that either controls or is controlled by a foreign company. This information can be combined at the enterprise level to identify a company group that both made a capital acquisition or disposal, and where at least one FDI link is present. Therefore, the reported capital acquisition is not necessarily made by the company with an FDI link, but both would be part of the same enterprise. 

Quality 

More quality and methodology information on strengths, limitations, appropriate uses and how statistics were calculated are available in our Business Investment Quality and Methodology Information (QMI) and Foreign Direct Investment QMI reports.

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7. Future developments

We will continue to develop this analysis to explore our linked microdata in more detail. This could include developing the way in which these data sources are linked and producing other related experimental statistics and microdata insights. We welcome all feedback on these results, including any suggestions on areas to analyse in more detail. Please contact us at fdi@ons.gov.uk.

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8. Cite this article

Office for National Statistics (ONS), released 1 August 2023, ONS website, article, Foreign direct investment and capital acquisitions, UK trends and analysis: 2021.

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Manylion cyswllt ar gyfer y Erthygl

Andrew Jowett
fdi@ons.gov.uk
Ffôn: +44 1633 455357