An official website of the United States Government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

United Kingdom

Executive Summary

The United Kingdom (UK) is a top global destination for foreign direct investment (FDI) and imposes few impediments to foreign ownership.  The United States is the largest source of direct investment into the UK.  Thousands of U.S. companies have operations in the UK.  The UK also hosts more than half of the European, Middle Eastern, and African corporate headquarters of American-owned firms.  The UK government provides comprehensive statistics on FDI in its annual inward investment  report:   https://www.gov.uk/government/statistics/department-for-international-trade-inward-investment-results-2019-to-2020.

Following a drop in inward investment each year since 2016 that mirrored global declines, and amidst a historically sharp but temporary recession related to the COVID-19 pandemic, the UK government established the Office for Investment in November 2020.  The Office is focused on attracting high-value investment opportunities into the UK which “align with key government priorities, such as reaching net zero [carbon emissions], investing in infrastructure, and advancing research and development.  It also aims to drive inward investment into “all corners of the UK through a ‘single front door.’”

The UK’s National Security and Investment Act, which came into effect in May 2021, significantly strengthened the UK’s existing investment screening powers.  Investments resulting in foreign control generally exceeding 15 percent of companies in 17 sectors pertaining to national security require mandatory notifications to the UK government’s Investment Security Unit

The UK formally withdrew from the EU’s political institutions on January 31, 2020, and from  the bloc’s economic and trading institutions on December 31, 2020.  The UK and the EU concluded a Trade and Cooperation Agreement (TCA) on December 24, 2020, setting out the terms of their future economic relationship.  The TCA maintains tariff-free trade between the UK and the EU but introduced a number of new non-tariff, administrative barriers.   On January 1, 2021, the UK began reviewing cross-border activities with a UK-EU nexus in parallel to the European Commission.

The United States and the UK launched free trade agreement negotiations in May 2020, which were paused with the change in U.S. Administration.  The United States and UK have enjoyed a “Commerce and Navigation” Treaty since 1815 which guarantees national treatment of U.S. investors.  A Bilateral Tax Treaty specifically protects U.S. and UK investors from double taxation.

On April 8, 2021, the UK established the Digital Markets Unit, a new regulatory body that will be responsible for implementing upcoming changes to competition rules in digital markets.  The Competition and Markets Authority (CMA), the UK’s competition regulator, has indicated that it intends to scrutinize and police the digital sector more thoroughly going forward.   The EU’s General Data Protection Regulation (GDPR) no longer applies to the UK.  Entities based in the UK must comply with the Data Protection Act (DPA) 2018, which incorporated provisions of the EU GDPR directly into UK law

In April 2020  a two percent digital services tax (DST) came into force that targets certain types of digital activity attributable to UK users. The in-scope digital services activities are: social media services; Internet search engines; and online marketplaces.  If an activity is ancillary or incidental to an in-scope digital services activity, its revenues may also be subject to the DST.

In March 2021, The UK government identified eight sites as post-Brexit freeports to spur trade, investment, innovation and economic recovery.  The eight sites are: East Midlands Airport, Felixstowe and Harwich, Humber region, Liverpool City Region, Plymouth, Solent, Thames, and Teesside.  The designated areas will offer special customs and tax arrangements and additional infrastructure funding to improve transport links.

HMG brought forward new immigration rules on January 1, 2021. The new rules have wide-ranging implications for foreign employees, students, and EU citizens.  The new rules are points-based, meaning immigrants need to attain a certain number of points in order to be awarded a visa.  The previous cap on visas has been abolished.  EU citizens who arrived before December 31, 2020, will not have to apply for a visa, but instead are eligible to apply for “settled” or “pre-settled” status, which allows them to live and work in the UK much the same as they were before the UK left the EU.  EU citizens arriving to the UK after January 1, 2021, must apply for the relevant visa.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 11 of 180 www.transparency.org/research/cpi/overview
World Bank’s Doing Business Report “Ease of Doing Business” 2020 8 of 190 www.doingbusiness.org/rankings
Global Innovation Index 2020 4 of 131 https://www.globalinnovationindex.org/analysis-economy  
U.S. FDI in partner country (M USD, stock positions) 2019 $851,400 www.bea.gov/international/factsheet/
World Bank GNI per capita 2019 $49,040 data.worldbank.org/indicator/NY.GNP.PCAP.CD 

Currency conversions have been done using XE and Bank of England data.

Investment Climate Statements
Edit Your Custom Report

01 / Select A Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future