Only Two of Top 10 Inward FDI Leaders by Value in the OECD Saw Growth in 2023. But What’s Up in Estonia?



The midsummer sun rises over the Kalamaja District and the Baltic Sea in Tallinn, Estonia.

Photo by Mlenny: Getty Images

Twice a year, the Paris-based Organization for Economic Co-operation and Development (OECD) publishes “FDI in Figures.” The most recent release dropped April 30, showing that global FDI flows dropped by 7% in 2023 to US$1.36 trillion, including a decrease in more than two-thirds of the 38 OECD economies.

However, overall FDI flows (inward and outward) are not the same thing as inward FDI flows alone, which increased by 11% across those OECD countries. Here are the top 10 countries by inward FDI value and by inward FDI growth rate in 2023:

Country Inward FDI (US$M) Growth Rate 2023
United States 341,407 -6%
Brazil 63,619 -13%
Canada 50,348 9%
China 42,728 -78%
Germany 36,699 34%
Mexico 36,058 -1%
Spain 34,377 -20%
Australia 31,517 -53%
France 29,798 -18%
Sweden 29,437 -36%

Country Inward FDI (US$M) Growth Rate 2023
Estonia 4,565 402%
Belgium 22,154 130%
Argentina 22,911 49%
Finland 7,923 37%
Germany 36,699 34%
Chile 21,027 25%
Costa Rica 4,122 25%
Denmark 8,781 11%
Canada 50,348 9%
Colombia 17,446 2%

Only Germany and Canada make both lists. Notably, the No. 8 country in growth rate, Costa Rica, is the newest OECD member country, having been ratified three years ago on May 25, 2021. Colombia was ratified in 2020.

In terms of accumulated inward FDI position, here are the top 10 countries.

Country Inward FDI Position (US$M)
United States 13,526,285
Netherlands 3,958,661
China 3,553,135
United Kingdom 3,048,960
Luxembourg 2,857,080
Canada 1,665,774
Ireland 1,410,050
Switzerland 1,247,242
Germany 1,208,918
Spain 947,359

But the real question is: With 402% growth, what’s going on in Estonia? Well, Invest in Estonia says it plainly on its FDI page: “Estonia's open and stable economy is characterized by adaptability and innovation. With conservative budget policy, flat-rate income taxation, extensive freedom for foreigners to own land, and 100% profit repatriation, Estonia is one of the most business-friendly countries not only in Eastern and Central Europe but in the whole world.”

That said, a White & Case memo notes that “on September 1, 2023, by virtue of the Foreign Investment Reliability Assessment Act (FIRAA) entering into force, an FDI screening mechanism was eventually established in Estonia.” The U.S. Department of State investment climate report on the country notes that the mechanism was put in place in order “to adhere to the EU Foreign Investment Screening Regulation , which created an information-sharing mechanism and allows Member States and the European Commission to comment on planned foreign investments in other Member States.”

In 2023 the country saw 30% of its FDI from financial and insurance activities, with 18% from the real estate sector, 16% from professional, scientific and technical activities, 10% each from manufacturing and trade, and 5% from ICT. Curiously, most of the countries of origin are in Estonia’s immediate periphery, led by Luxembourg, Finland and Sweden. In fact, only 29% of FDI in 2023 came from outside its part of the world.

Moreover, the majority of the nine major corporate end-user facility investment projects tracked in Estonia by Site Selection’s Conway Projects Database since January 2023 come from companies already established in the country (hence not FDI), including a battery manufacturing venture in Tallinn from Aktsiaselts Elcogen and AS Maru Ehitus and a $3.2 million manufacturing investment from Nordecon Betoon OU and BioForce OU in Laatre. Among recent FDI-driven projects are a $169 million investment from Sweden’s Ericsson in Tallinn and a $100 million investment from Canadian firm Neo Performance Materials in Ida-Virumaa.



Ericsson’s smart manufacturing and technology hub, announced last July, consolidates all of the company’s Estonian operations in one 50,000-sq.-meter (538,200-sq.-ft.) complex that includes test labs, warehouses, production lines and offices. “It will be used for co-developing cellular ecosystems and production techniques mainly with customers and partners in Europe but with global impact on industrialization for volume production,” the company said. “By establishing this European hub, Ericsson will enable a symbiotic relationship between its established R&D in Sweden and manufacturing, where product innovation extends into production and vice versa.”

The property transaction, expected to close by Q4 2024, is for a parcel in Ülemiste City in Tallinn, which Ericsson referred to as “the largest business park and future-oriented urban area in the Baltics.” The new European hub is expected to be operational in early 2026. Ericsson said it has more than 2,200 employees in Estonia, including engineers and experts in AI and machine learning. “The existing factory plays a strategic role in Ericsson’s global supply footprint, accounting for more than 40% of the industrialization of Ericsson 5G products,” the company said.

Ericsson is consolidating its Estonian operations at a new hub in Tallinn’s Ülemiste City.

Rendering courtesy of Ericsson

“We are committed to being at the forefront of sustainable operations in Europe as we revolutionize our manufacturing process jointly with our partners and customers, and support the scale up of 5G deployment,” said Fredrik Jejdling, executive vice president and head of networks for Ericsson, at the announcement last year. “This smart hub will be powered 100% by renewable electricity and built with optimal efficiency through AI, machine learning, robotics, and other advanced Industry 4.0 technologies. In addition, we aim to attract local and European talent by creating an environment that fosters collaboration, innovation, employee wellbeing, diversity, and inclusion.”

“Ericsson’s decision to establish a high-tech, smart manufacturing and technology hub in the forward-looking Ülemiste City stands as a prime illustration of the economy's next generation for Estonia,” added Estonian Minister of Economic Affairs and Information Technology Tiit Riisalo. “It serves as a concrete demonstration of Estonia's commitment to the green transition, our robust ties to emerging technologies, and the creation of an ecosystem that fosters innovation for other companies as well.”