London leads the world as the top destination for foreign investment in financial and professional services
New figures published today [26 April] by the City of London Corporation, show that London continues to hold the top spot in attracting foreign investment in financial and professional services, attracting 114 projects in 2021 – well clear of Dubai (104 projects), Singapore (103), New York (54) and Paris (51).
The research analyses foreign direct investment (FDI) into the financial and professional services (FPS) sector across the world. It found that overall the UK attracted £1.1bn worth of investment in 2021, the largest number of FPS FDI projects in Europe (186), and second in the world only to the US (234).
The Covid-19 pandemic had an adverse effect on global investment, causing the number of FDI projects in finance and insurance to drop by 30% between 2019 and 2020 globally. While the UK was affected by the pandemic it saw a steady recovery in 2021. In fact, in 2021 FPS investors in the UK engaged in more expansion projects and made more jobs and capital investment on average than before the pandemic.
Between 2017-2021 the UK attracted investment from 64 countries around the world – the highest among all financial service centres. The US was the largest investor into the UK’s FPS followed by Switzerland and Australia. France was the largest investor into the UK’s FPS from the EU and fourth largest overall followed by Germany (5) and Ireland (6).
Fintech firms have become the largest source of financial service FDI projects in the UK, accounting for a third of all projects, demonstrating the UK’s appeal as a world leading financial service innovation hub.
Lord Mayor of the City of London, Vincent Keaveny, said:
“Despite the challenges of the pandemic, the UK’s financial and professional services sector has proven resilient. The UK’s offer to global investors continues to go from strength to strength due to its unique combination of time zone, language, legal system, global talent, and financial services ecosystem.
“Our position at the crossroads of Europe’s biggest financial and tech sectors make us one of the globe’s foremost hubs for innovation.”
Policy Chair at the City of London Corporation, Catherine McGuinness, said:
“It comes as no surprise that London continues to lead the world as the top destination for investment in financial and professional services. Our fundamentals remain strong and the UK’s continuing appeal to investors is demonstrated by a robust pipeline of projects both in the capital and other regions.
“It is vital that we continue to build on this success. We must future-proof the sector and make sure we remain globally competitive as we forge a new chapter in our trading history.”
The research is available here: https://www.theglobalcity.uk/resources/the-uk-a-top-destination
Notes to editors
About the City of London Corporation
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk
About the research
This publication was produced by the City of London Corporation using data provided by FDI Markets, a service from The Financial Times Limited, accessed in February 2022. In this analysis foreign direct investment refers to cross-border investments from one country to another either through setting up a new entity or expanding the operations in the investment destination. Franchises and M&A activities are excluded. The methodology used is different from published statistics from the Office of National Statistics and the Department for International Trade.