EU direct investment flows, by country and economic activity (NACE Rev. 2)
methods, notes and classification
DATA_DESCR Eurostat uses as a base for its work the OECD Benchmark Definition of Foreign Direct Investment Third Edition, a detailed operational definition fully consistent with the IMF Balance of Payments Manual, Fifth Edition, BPM5. Foreign direct investment (FDI) is the category of international investment made by an entity resident in one economy (direct investor) to acquire a lasting interest in an enterprise operating in another economy (direct investment enterprise). The lasting interest is deemed to exist if the direct investor acquires at least 10% of the voting power of the direct investment enterprise. FDI statistics record separately: 1) Inward FDI (or FDI in the reporting economy), namely investment by foreigners in enterprises resident in the reporting economy. 2) Outward FDI (or FDI abroad), namely investment by residents entities in affiliated enterprises abroad. FDI statistics record both the initial investment and all subsequent investment made by the direct investor, either in the form of equity capital, or in the form of loans, or in the form of reinvesting earnings. Investment made through other affiliated enterprises of the same group of the direct investor should also be recorded according to the international methodology. There are three main indicators: FDI flows, stocks and income. The indicators described in more detail below are presented in the complete tables with a breakdown by partner country or region and a breakdown by the kind of activity in which FDI is made. In the table called "Main indicators" there is a reduced breakdown by partners and data for total activity only. See the part on classification system for more detail. See also the User's guideon the structure on the database and for practical information on data downloading. 1) FDI flows denote the new investment made during the period. FDI flows are recorded in the Balance of Payments financial account. Total FDI flows are broken down by kind of instrument used for making the investment: Equity capital comprises equity in branches, all shares in subsidiaries and associates (except non-participating, preferred shares that are treated as debt securities and are included under other FDI capital) and other contributions such as the provision of machinery. Reinvested earnings consist of the direct investor's share (in proportion to equity participation) of earnings not distributed by the direct investment enterprise. Reinvested earnings are an imputed transaction. Reinvested earnings are also recorded with opposite sign among FDI income (see below). This recording represents not distributed income as being earned by the direct investor and reinvested in the direct investment enterprise at the same time. Other FDI capital (loans) covers the borrowing and lending of funds, including debt securities and trade credits between direct investors and direct investment enterprises. Debt transactions between affiliated financial intermediaries recorded under direct investment flows are limited to permanent debt. 2) FDI stocks (or positions) denote the value of the investment at the end of the period. FDI stocks are recorded in the International Investment Position. Outward FDI stocks are recorded as assets of the reporting economy, inward FDI stocks as liabilities. Similarly with flows, FDI stocks are broken down by kind of instrument. However, there are only two categories instead of three: Equity capital and reinvested earnings is the value of the own capital of the enterprise, including the value of own reserves that are accumulated from past reinvested earnings. Reserves corresponding to reinvested earnings are not shown separately from other equity capital as in the case of flows. Other FDI capital is the stock of debts (assets or liabilities) between the direct investors and the direct investment enterprise. 3) FDI income is the income accruing to direct investors during the period. FDI income is recorded in the current account of the Balance of Payments. Total FDI income is broken down by kind of income. The categories of FDI income available are linked to the breakdown of FDI flows and stocks by kind of instrument, namely: Dividends Dividends payable in the period and branch profits remitted to the direct investor, gross of any withholding taxes. Dividends include payments due on common and preferred shares. Reinvested earnings See definition under FDI flows. Interest on loans Interest accrued in the period on loans (other FDI capital) with affiliated enterprises, gross of any withholding tax. 4) FDI intensity Out of FDI annual data, an indicator useful to measure EU market integration is also calculated and disseminated in the domain Structural Indicators: FDI intensity as % of GDP: Average of inward and outward FDI flows divided by GDP. A higher index indicates higher new FDI during the period in relation to the size of the economy as measured by GDP. If this index increases over time, then the country/zone is becoming more integrated with the international economy.
CLASS_SYSTEM The main general reference classifications used are contained in the IMF Balance of Payments Manual, Fifth Edition, BPM5ááand the OECD Benchmark Definition of Foreign Direct Investment Third Edition. For the classification of FDI by economic activity, the reference classification is NACE Rev. 1.1 (up to reference year 2009) and the NACE Rev.2 (from reference year 2008). For the classification by partner country or region see the list of partners. For a detailed description of the classifications used, see the áBoP Vademecum.
STAT_CONC_DEF Eurostat uses as a base for its work the OECD Benchmark Definition of Foreign Direct Investment Third Edition, a detailed operational definition fully consistent with the IMF Balance of Payments Manual, Fifth Edition, BPM5. Foreign direct investment (FDI) is the category of international investment made by an entity resident in one economy (direct investor) to acquire a lasting interest in an enterprise operating in another economy (direct investment enterprise). The lasting interest is deemed to exist if the direct investor acquires at least 10% of the voting power of the direct investment enterprise. FDI statistics record separately: 1) Inward FDI (or FDI in the reporting economy), namely investment by foreigners in enterprises resident in the reporting economy. 2) Outward FDI (or FDI abroad), namely investment by residents entities in affiliated enterprises abroad. FDI statistics record both the initial investment and all subsequent investment made by the direct investor, either in the form of equity capital, or in the form of loans, or in the form of reinvesting earnings. Investment made through other affiliated enterprises of the same group of the direct investor should also be recorded according to the international methodology.á There are three main indicators presented: FDI flows, stocks and income. These indicators are described in more detail below and are presented in the complete tables with a breakdown by partner country or region and a breakdown by the kind of activity in which FDI is made. In the table called "Main indicators" there is a reduced breakdown by partners and data for total activity only. See the part on classification system for more detail. See also the User's guideon the structure on the database and for practical information on data downloading. 1) FDI flows denote the new investment made during the period. FDI flows are recorded in the Balance of Payments financial account. Total FDI flows are broken down by kind of instrument used for making the investment: Equity capital comprises equity in branches, all shares in subsidiaries and associates (except non-participating, preferred shares that are treated as debt securities and are included under other FDI capital) and other contributions such as the provision of machinery. Reinvested earnings consist of the direct investor's share (in proportion to equity participation) of earnings not distributed by the direct investment enterprise. Reinvested earnings are an imputed transaction. Reinvested earnings are also recorded with opposite sign among FDI income (see below). This recording represents not distributed income as being earned by the direct investor and reinvested in the direct investment enterprise at the same time. Other FDI capital (loans) covers the borrowing and lending of funds, including debt securities and trade credits between direct investors and direct investment enterprises. Debt transactions between affiliated financial intermediaries recorded under direct investment flows are limited to permanent debt. 2) FDI stocks (or positions) denote the value of the investment at the end of the period. FDI stocks are recorded in the International Investment Position. Outward FDI stocks are recorded as assets of the reporting economy, inward FDI stocks as liabilities. Similarly with flows, FDI stocks are broken down by kind of instrument. However, there are only two categories instead of three: Equity capital and reinvested earnings is the value of the own capital of the enterprise, including the value of own reserves that are accumulated from past reinvested earnings. Reserves corresponding to reinvested earnings are not shown separately from other equity capital as in the case of flows. Other FDI capital is the stock of debts (assets or liabilities) between the direct investors and the direct investment enterprise. 3) FDI income is the income accruing to direct investors during the period. FDI income is recorded in the current account of the Balance of Payments. Total FDI income is broken down by kind of income. The categories of FDI income available are linked to the breakdown of FDI flows and stocks by kind of instrument, namely: Dividends Dividends payable in the period and branch profits remitted to the direct investor, gross of any withholding taxes. Dividends include payments due on common and preferred shares. Reinvested earnings See definition under FDI flows. Interest on loans Interest accrued in the period on loans (other FDI capital) with affiliated enterprises, gross of any withholding tax. 4) FDI intensity Out of FDI annual data, an indicator useful to measure EU market integration is also calculated and disseminated in the domain Structural Indicators: FDI intensity as % of GDP: Average of inward and outward FDI flows divided by GDP. A higher index indicates higher new FDI during the period in relation to the size of the economy as measured by GDP. If this index increases over time, then the country/zone is becoming more integrated with the international economy.
STAT_UNIT Foreign direct investor A direct investor is an individual, an incorporated or unincorporated public or private enterprise, a government, a group of related individuals, or a group of related incorporated and/or unincorporated enterprises which have a direct investment enterprise operating in a country other than the country or countries of residence of the direct investor or investors. Direct investment enterprise A direct investment enterprise is an enterprise in which a foreign investor owns 10% or more of voting power or has an effective voice in the management of the enterprise. Some countries may feel it necessary to treat the 10% limit with flexibility to fit circumstances. A direct investment enterprise may be an incorporated enterprise - a subsidiary or associate company - or an unincorporated enterprise (branch): Subsidiary: ownership > 50% or control. A subsidiary is an incorporated enterprise in which: i) the foreign investor controls directly or indirectly (through another subsidiary) more than 50% of the shareholders' voting power, or ii) the foreign investor has anyway control over the enterprise, i.e. the right to appoint or remove a majority of the members of this enterprise's administrative, management or supervisory body. Associate: ownership between 10% and 50% and no control on enterprise. Branch: wholly or jointly owned unincorporated enterprise. For example, a permanent establishment or office abroad of a foreign direct investor; or mobile equipment operating within an economy for at least one year if accounted for separately by the operator (e.g. ships, aircraft, gas and oil drilling rigs); but also: land, structures and immovable equipment and objects directly owned by a foreign resident (e.g. holiday and second homes). Indirect participation in direct investment enterprises Statistics based on the definitions given above should cover all enterprises in which the direct investor has directly or indirectly a direct investment interest (Framework of Direct Investment Relationships). In particular, this mainly means that: a) reinvested earnings (flows, income) and the corresponding reserves (stocks) of indirectly participated enterprises should be included in FDI statistics in proportion to the indirect percent of equity held by the direct investor. The indirect percent of equity is obtained by multiplying the direct percent of equity held at each step of the chain linking the direct investor and the direct investment enterprise; b) direct investment flows, income and stocks within a group of enterprises should be included in FDI statistics without consideration of the percent of equity directly held by these enterprises in each other. For more detail, see the OECD Benchmark Definition of Foreign Direct Investment Third Edition.
STAT_POP The statistical population is composedáof all direct investors (for outward FDI) and by all direct investment enterprises (for inward FDI).
REF_AREA For the most recent years all FDI data for the EU Member States, EU-15, EU-25, EU-27, Euro area, the United States and Japan, EFTA countries (except Liechtenstein) and Candidate Countries (Croatia and Turkey) are provided. For less recent years data availability varies across Member States.
BASE_PER N/A
UNIT_MEASURE Data are in millions of Euro/ECU.
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