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The UK attracted 155 software and IT services foreign direct investment projects in 2025, maintaining its position as Europe’s leading destination for digital inward investment, according to the 2026 UK Attractiveness Survey by EY.
It comes as the UK secured approximately 18% of all technology-related foreign direct investment (FDI) projects across Europe last year. The national total of 155 projects placed the UK ahead of France, which recorded 104 projects, and Germany, which recorded 102 projects.
As a result, London remained the top city on the continent for digital investment after securing 85 projects in 2025. This figure was more than double the total recorded by second-ranked Paris. Over a five-year period, the capital has secured 616 tech-related FDI projects, which is more than twice the volume attracted by the French capital.
Despite maintaining its leading position, the UK saw technology project volumes decline by 4% nationally in 2025, while projects in London fell by 12% compared with 2024. Conversely, the wider European market saw software and IT services projects increase by 8% year-on-year to 857. This total remains below the decade peak recorded in 2019, when 1,462 projects were tracked across Europe.
Investment from the US into the UK software sector showed signs of recovery following several years of decline. The number of US-originated projects rose 21% from 33 in 2024 to 40 in 2025, making the US the leading source of UK tech investment again. However, Indian-originated projects, which led the market in 2024, fell by 40% to 24 projects last year.
An accompanying investor sentiment survey of 360 international investment decision-makers showed that 57% of respondents believe the UK outperforms competitor markets for technology talent availability. Furthermore, 53% rated the UK ahead of rivals for its start-up ecosystem and research institutions, while 59% favoured its data protection regulations.
Confidence was also recorded in AI, with 48% of investors stating the UK offers a more attractive environment for AI investment, development, and deployment than rival markets, while 39% viewed it as comparable. Respondents cited the availability of skilled professionals, access to investment capital, and academic research as the primary drivers for choosing the UK for AI projects.
Peter Arnold, UK chief executive at EY, said: “While inward investment levels softened globally and across Europe last year amid trade disruption and geopolitical uncertainty, technology remained a reliable and leading source of FDI for the UK.
“London’s success as Europe’s leading hub for software investment is clear, but tech’s contribution to the UK economy extends well beyond the capital. Technology is the leading source of FDI into major cities such as Manchester and Edinburgh, reflecting the UK’s deep and widely distributed pool of skilled technology talent.”
