FDI regulatory restrictiveness index Europe 2020

As of 2020, the Russian Federation was the European country with the most restrictive regulatory environment in relation to foreign direct investment (FDI), followed by Iceland and Ukraine. Countries restrict FDI for varying reasons - some restrict access to strategic industries for national security reasons, others try to protect their domestic industries in certain sectors by restricting foreign ownership. In general, the countries of the European Union and the United Kingdom have much higher FDI restrictions in their primary sectors - that is, agriculture and natural resource extraction - than in their secondary (manufacturing) or tertiary (services) sectors. Kosovo, Luxembourg, and Slovenia had the lowest FDI barriers in 2020, with these countries hardly having any restrictions against foreign investment at all.

Foreign direct investment (FDI) regulatory restrictiveness index in Europe in 2020, by country and economic sector

Characteristic	Total FDI Index	Agriculture & raw material extraction	Manufacturing	Services
Russia	0.26	0.21	0.15	0.35
Iceland	0.17	0.24	0.18	0.13
Ukraine	0.12	0.13	0.08	0.15
Austria	0.11	0.15	0.14	0.07
Norway	0.09	0.16	0	0.11
Belarus	0.09	0.03	0.01	0.16
Switzerland	0.08	0	0.07	0.12
Poland	0.07	0.05	0	0.13
Sweden	0.06	0.14	0	0.07
Türkiye	0.06	0.01	0	0.11
Albania	0.06	0.17	0.03	0.04
Moldova	0.06	0.08	0.05	0.06
France	0.05	0.16	0	0.03
Italy	0.05	0.13	0	0.06
Slovak Republic	0.05	0	0	0.1
Serbia	0.05	0.04	0.03	0.07
Belgium	0.04	0.04	0.02	0.05
Ireland	0.04	0.14	0	0.04
United Kingdom	0.04	0.14	0	0.03
Bosnia and Herzegovina	0.04	0.02	0.03	0.05
Denmark	0.03	0.06	0	0.05
Greece	0.03	0.08	0	0.04
Hungary	0.03	0	0	0.06
North Macedonia	0.03	0.08	0.01	0.01
Croatia	0.03	0.06	0.02	0.04
Finland	0.02	0.02	0.02	0.02
Germany	0.02	0.07	0	0.02
Netherlands	0.02	0.06	0	0.01
Spain	0.02	0.01	0	0.04
Estonia	0.02	0.02	0	0.03
Latvia	0.02	0.02	0.01	0.03
Lithuania	0.02	0.03	0.01	0.03
Romania	0.02	0.04	0	0.02
Montenegro	0.02	0.03	0	0.04
Czechia	0.01	0.03	0	0.01
Portugal	0.01	0.01	0	0.01
Slovenia	0.01	0	0	0.02
Luxembourg	0	0	0	0.01
Kosovo	0	0	0	0

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Release date

February 2024

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Region

Europe

Survey time period

2020

Supplementary notes

The FDI Regulatory Restrictiveness Index (FDI Index) measures statutory restrictions on foreign direct investment across 22 economic sectors. It gauges the restrictiveness of a country’s FDI rules by looking at the four main types of restrictions on FDI: 1) Foreign equity limitations; 2) Discriminatory screening or approval mechanisms; 3) Restrictions on the employment of foreigners as key personnel and 4) Other operational restrictions, e.g. restrictions on branching and on capital repatriation or on land ownership by foreign-owned enterprises. Restrictions are evaluated on a 0 (open) to 1 (closed) scale. The overall restrictiveness index is the average of sectoral scores.

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