OECD FDI Regulatory Restrictiveness Index 2025

1. FDI regulatory landscape in 2025

FDI can support sustainable and inclusive growth by bringing capital, knowledge and technology, strengthening domestic private sector development and creating high-quality jobs, particularly in emerging markets. Under appropriate policy frameworks, it can also contribute to broader objectives, including gender equality, skills development, decarbonisation, innovation and digital transformation (OECD, 2024[2]; 2023[3]; 2026[4]).

An open, transparent, predictable and non-discriminatory investment policy framework can help economies realise these benefits (OECD, 2015[5]). Governments retain the right to regulate in the public interest to achieve legitimate policy objectives. At the same time, measures that discriminate against foreign investors, such as foreign equity limits, discriminatory screening procedures and operational restrictions, can deter investment and reduce potential productivity and efficiency gains. Their effects may extend beyond the sectors directly concerned by limiting potential tax revenues, knowledge transfers, competitive pressures and the efficient allocation of capital (Mistura and Roulet, 2019[6]; Yoon and Ko, 2025[7]; OECD, 2023[8]; World Bank, 2025[9]).

The 2025 FDIRRI results indicate that FDI restrictions remain uneven across economies and regions, but also that FDI regulatory frameworks remained broadly stable in 2025, with only limited changes. This stability is noteworthy in a period marked by heightened policy activism affecting international investment. Since 2020, governments have increasingly pursued resilience, technological leadership, the green and digital transitions and economic security through industrial, trade, innovation and national security policies (OECD, forthcoming[10]). Many of these measures may also shape the location, scale and composition of international investment, but they fall outside the scope of the FDIRRI, which focuses specifically on statutory discrimination against foreign investors. Against this backdrop, the continued stability of FDI regulatory restrictiveness provides some reassurance that, at the aggregate level, economies have not broadly reversed earlier liberalisation efforts, despite their growing use of other policy instruments to pursue wider objectives.

This section describes the current global landscape of FDI restrictions for 106 economies included in the 2025 edition of the OECD FDI Regulatory Restrictiveness Index (FDIRRI) (see Annex A for a description of the indicator). It highlights variations in FDI policy restrictiveness across countries, regions, and income groups, identifying the types of regulatory barriers most prevalent in national investment frameworks.

1.1. FDI restrictiveness varies considerably across economies and regions

In 2025, all 106 economies covered by the FDIRRI maintained at least one statutory barrier that discriminated against foreign investors or subjected them to additional conditions compared with domestic investors. The extent of these restrictions nevertheless varies considerably across the sample. As measured by the FDIRRI, average restrictiveness in the most restrictive quartile is more than 22 times that in the least restrictive quartile (Figure 1). Restrictiveness is also highly concentrated, with just ten economies accounting for more than 31% of the combined FDIRRI scores across the sample. Overall, 42% of covered economies are less restrictive than the OECD average, while 70% are less restrictive than the non-OECD average.

Figure 1. The restrictiveness of FDI regulatory regimes varies widely across countries

OECD FDI Regulatory Restrictiveness Index, 2025 (open=0; closed=1)

Note: The indices reflect regulation in force on 31 December 2025. The 106 economies are ranked from most to least restrictive and split across two panels: Panel A covers the fourth and third quartiles, Panel B the second and first. The horizontal scales differ between panels, with values in Panel B an order of magnitude smaller than in Panel A. For further information on the FDIRRI’s methodology, see Annex A.

Source: OECD (2025[11]), OECD FDI Regulatory Restrictiveness Index – Scores (dataset), https://data-explorer.oecd.org/s/5bl.

Figure 2. FDI restrictions by regions and income groups, sectors and by scope of application

Note: All panels: The indices reflect regulation in force on 31 December 2025. Panels A and B: regions and income groups according to the World Bank’s classification in the current 2027 fiscal year (FY). Panel C: data refer to unweighted FDIRRI sector scores which do not account for differences in sectors’ economic relevance, and therefore represent the sectoral distribution of FDI restrictions simply due to the incidence of a statutory restriction in a given sector and the degree of restrictiveness of the policy measure applied. Weighted scores (Panels A and B) account in addition for the economic importance of the restricted sector (sectoral weights are measured as the sector average share in total value added across countries and time); See Annex A for further methodological information. Panel D: data reflect the average contribution of horizontal and sector-specific restrictions to total restrictiveness.

Source: OECD (2025[11]), OECD FDI Regulatory Restrictiveness Index – Scores (dataset), https://data-explorer.oecd.org/s/5bl.

Regional differences remain pronounced. Europe and Central Asia continued to record the lowest average restrictiveness in 2025, followed by Latin America and the Caribbean (Figure 2, Panel A). North America remained in an intermediate position, partly reflecting the greater prevalence of economic screening and review mechanisms, which account for almost half of its measured restrictiveness. By contrast, the Middle East and North Africa (MENA) remained the most restrictive region, followed closely by East Asia and the Pacific and Sub-Saharan Africa, largely due to the more widespread use of statutory foreign equity limits.

MENA’s high level of restrictiveness persists despite substantial progress in reducing barriers to FDI in several economies in recent years (see Figure 2). A similarly pronounced divide also remains between OECD and non-OECD economies, with the average restrictiveness among non-OECD economies being 3.1 times that of OECD Members (Figure 2, Panel B).

FDI restrictiveness also continues to vary considerably across income groups. Average restrictiveness in low-income and lower-middle‑income economies stood at 0.203 and 0.185, respectively, more than three times the high-income average of 0.061, while upper-middle‑income economies occupied an intermediate restrictiveness position at 0.134 (Figure 2, Panel B). Foreign equity limits account for close to two‑thirds of measured restrictiveness in both upper- and lower-middle‑income economies. They also remain the largest contributor to FDI restrictiveness in high-income economies, but they account for a relatively smaller share, with economic screening mechanisms playing a comparatively greater role.

European Union (EU) member states remain considerably more open to FDI than non-EU economies. This difference reflects both the durability of earlier investment-liberalisation reforms and the role of the Single Market in facilitating the free movement of capital. Average restrictiveness among EU member states remained unchanged at 0.0293 in 2025, while the non-EU average changed marginally from 0.1515 to 0.1517.

1.2. Foreign equity limits account for most FDI restrictiveness

In 2025, restrictions on foreign equity ownership remained the largest statutory barrier to FDI, accounting for 61% of measured restrictiveness across the 106 economies covered by the FDIRRI. Other operational restrictions represented 26% of the aggregate score, followed by foreign investment screening based on economic criteria at 10% and restrictions on key foreign personnel at 3%.

The composition of overall restrictiveness changed little from 2024. However, the share attributable to foreign equity limits declined slightly, reflecting liberalisation in a few large economies alongside new or reinforced restrictions in selected activities elsewhere (see Section 2.1). The regulatory composition of OECD economies remained broadly stable, consistent with the substantial investment liberalisation undertaken by many members during the 1970s and 1980s (OECD, 1987[12]; 1987[13]).

1.2.1. Foreign equity limits remain widespread and concentrated in sensitive sectors

Foreign equity limits are the largest contributor of FDI restrictiveness in both OECD and non-OECD economies and across all regions (Figure 2, Panels A and B). While this partly reflects their relatively high weight in the FDIRRI methodology, their prevalence is also notable: all covered economies, except the United Kingdom and Kosovo*, maintained at least one foreign equity restriction in 2025.

Their sectoral distribution remains broadly similar across regions and economic groups. Equity restrictions are typically concentrated in network and other sensitive sectors, particularly transport, distribution, media, telecommunications and electricity. Restrictions on foreign acquisition and ownership of property for real estate investment purposes are also widespread, while nationality requirements in regulated professions, particularly legal services, sometimes indirectly restrict foreign ownership and investment in such services.

Differences across OECD and non-OECD economies tend to lie in the scope and stringency of these restrictions. In OECD economies, foreign equity caps are generally confined to a limited number of sectors, particularly air transport, media and electricity, and often permit foreign ownership up to 49%. In non-OECD economies, they are more likely to extend across a broader range of activities, including construction, financial services, mining and manufacturing, and to impose tighter ownership limits, in some cases prohibiting foreign ownership altogether.

The contribution of foreign equity limits to overall FDI restrictiveness also differs across regions. It is highest in the MENA region, where they accounted for 74% of measured restrictiveness in 2025 (up from 70% in 2024), followed by South Asia (66%) and East Asia and the Pacific (63%). Their contribution is lower in Europe and Central Asia (59%), Latin America and the Caribbean (49%) and North America (42%).

Given their strong association with lower FDI, foreign equity restrictions merit particular policy scrutiny, including periodic assessment of their costs against their intended public purpose and consideration of less discriminatory alternatives (Mistura and Roulet, 2019[6]; World Bank, 2025[9]; ADB, 2026[14]).

1.2.2. Economic screening differs in prevalence and relative importance across economies

The FDIRRI captures approval and review procedures that discriminate against foreign investors, either because they apply only to foreign-owned projects or because their assessment criteria explicitly favour domestically owned investment. Only those mechanisms that allow authorities to consider economic factors – such as effects on employment, technology or productivity, in a manner comparable to an economic needs or net benefit test – contribute to FDIRRI scores. Screening conducted exclusively to protect public order or essential security interests is recorded for transparency but does not contribute to an economy’s restrictiveness score (see Section 2.1.3).

Economic screening remained relatively common in 2025, with 44 of the 106 covered economies maintaining at least one horizontal or sector-specific screening mechanism, one fewer than in 2024. Its prevalence and contribution to measured restrictiveness nevertheless differ considerably between OECD and non-OECD economies.

Thirteen of the 38 OECD Members applied economic screening, usually in a limited number of sectors such as real estate, media and telecommunications, although some mechanisms covered most or all sectors. Despite its relatively low prevalence, economic screening accounted for 27% of average measured restrictiveness in the OECD, reflecting the broad scope of such measures in a few economies and its resulting weight within otherwise comparatively open regulatory frameworks.

Economic screening was more prevalent outside the OECD, with 31 of 66 non-OECD economies maintaining at least one such mechanism. Coverage often extended beyond sectors commonly screened in OECD economies to activities such as distribution, tourism-related services and selected manufacturing industries. Six non-OECD economies applied horizontal economic screening, one fewer than in 2024, although in two cases these measures affected only branches of foreign companies. Despite its broader prevalence, economic screening accounted for only 7% of the average measured restrictiveness in non-OECD economies, where foreign equity limits and other operational restrictions played a much larger role.

1.2.3. Restrictions on key foreign personnel contribute marginally to overall scores

The FDIRRI captures restrictions on the appointment of foreign nationals as senior executives or company board members, as well as nationality requirements for senior seafaring positions in fisheries and water transport.

Although present in many economies, these restrictions tend to have a narrow sectoral scope and therefore contribute little overall restrictiveness. In 2025, they accounted for just 2.6% of measured restrictiveness globally, unchanged from 2024 (Figure 2, Panel A). In OECD economies, where such measures are usually confined to air and maritime transport, media and professional services, they accounted for 1.9% of overall restrictiveness on average. In non-OECD economies, they represented 2.8% of measured restrictiveness on average, reflecting their more likely application across multiple sectors or as part of nationality requirements governing regulated professions.

1.2.4. Other restrictions remain more prominent outside the OECD, although the gap has narrowed

Beyond foreign equity limits, economic screening and restrictions on key foreign personnel, the FDIRRI captures a range of other discriminatory barriers preventing foreign investors from operating on equal terms with domestic ones, including restrictions on profit and capital repatriation, land and real estate ownership for business purposes, local content and capital requirements, preferences in public procurement, minimum capital requirements and reciprocity conditions.

These measures accounted, on average, for 26.8% of measured restrictiveness in non-OECD economies in 2025, compared with 20.2% in OECD economies (Figure 2, Panels A and B). The gap nevertheless narrowed from 9.2 percentage points (p.p.) in 2024 to 6.6 p.p. in 2025, reflecting a higher contribution in the OECD area and a slight decline in non-OECD economies.

The nature and scope of these restrictions differ between the two groups. In OECD economies, they tend to be sector-specific, while horizontal measures are more common outside the OECD, particularly for public procurement, access to land and real estate, the repatriation of capital, and local content requirements. Procurement preferences and restrictions on profit repatriation are almost absent from OECD economies but remain present in parts of the non-OECD sample, especially in Sub-Saharan Africa (Figure 2, Panel A).1 Discriminatory local content requirements are similarly concentrated in non-OECD economies, notably in extractive industries and media. Discriminatory minimum capital requirements have become less common, but remain present in 21 non-OECD economies, primarily in Sub-Saharan Africa and East Asia and the Pacific, but in no OECD Member. Reciprocity requirements, by contrast, remain in use in both groups, particularly in professional and financial services.

Restrictions on foreign ownership of land and real estate used for business purposes remain among the most prevalent operational barriers in non-OECD economies.2 In 2025, 42 non-OECD economies prohibited foreign ownership of such land or real estate, although medium-term leases of 30 to 70 years and long-term leases exceeding 70 years were often permitted. A further 21 economies imposed other discriminatory conditions on foreign access to land or real estate, including prior approval, reciprocity requirements or quantitative limits. These restrictions usually applied horizontally, affecting investment across a wide range of business activities. In OECD economies, prior approval requirements were more common than outright ownership prohibitions.

Local incorporation requirements also remain present in both groups. The FDIRRI records these requirements only in financial services and real estate, where the requirement to establish a locally incorporated entity rather than operate through a branch or invest directly can materially increase entry costs and constrain foreign investors’ choice of establishment. In financial services, they may also limit the allocation of capital and risk across corporate groups.

1.3. FDI restrictions are concentrated in selected primary activities and services

FDI restrictions may apply horizontally across the economy or target specific sectors and activities. Horizontal measures most commonly include operational restrictions, such as limits on land ownership and preference rules in public procurement, but may also take the form of economy-wide foreign equity limits or economic screening mechanisms. Given their broad coverage, they can contribute substantially to overall restrictiveness. In 2025, they accounted for 32% of the average measured restrictiveness in non-OECD economies, compared with 19% in OECD economies (Figure 2, Panel D).

The 2025 results confirm the sectoral pattern observed in recent years, with restrictions remaining mostly concentrated in selected primary activities and services (Figure 2, Panel C). Media, real estate, transport, agriculture, fisheries and professional services record the highest levels of policy restrictiveness on average across the covered economies. While the broad sectoral pattern is similar across OECD and non-OECD economies, FDI restrictiveness is generally higher outside the OECD area. By contrast, most manufacturing activities and several business services remain comparatively open.

Media remains the most restricted sector, particularly broadcasting, driven primarily by foreign equity limits and nationality requirements for key personnel. These measures often reflect policy sensitivities associated with national culture and control over information.

Real estate investment also remains highly restricted, largely reflecting prohibitions or limitations on foreign ownership of land and buildings, together with additional conditions such as local incorporation and screening requirements, particularly outside the OECD area.

FDI restrictions in transport are also widespread, with nearly all economies maintaining at least one restriction in the sector. Air transport is particularly affected by foreign equity limits and nationality requirements on key personnel, while maritime transport is subject to similar ownership restrictions and nationality conditions for key seafaring positions.

In agriculture and fisheries, restrictiveness largely reflects strict rules on foreign access to agricultural land and ownership of fishing vessels. Agricultural restrictions frequently prohibit foreign ownership of agricultural land while allowing leasing as an alternative. Although also present in some OECD economies, these measures are generally more stringent outside the OECD area. In fisheries, foreign participation is often constrained by conditions governing the registration and licensing of fishing vessels, including the reservation of commercial fishing activities to domestically owned vessels, as well as nationality requirements for captains and other key seafaring personnel.

Professional services restrictions are concentrated particularly in legal services. In many cases, nationality is required for obtaining a full professional licence and, where ownership of such firms is reserved for licensed practitioners, this indirectly restricts foreign investment and participation in the sector.

By contrast, manufacturing and several business services remain largely open to foreign investment, although exceptions persist in a few non-OECD economies, where activities such as basic metals, food processing and professional services remain subject to foreign equity limits, joint venture requirements or other market-entry conditions. In most cases, however, measured restrictiveness in manufacturing reflects horizontal restrictions rather than measures specifically targeted at industrial activities.

Notes

← 1.  Procurement preferences may provide price advantages to nationally owned firms, impose more restrictive qualification criteria, or exclude foreign-owned companies altogether. They are particularly common in lower-income economies, where public procurement can represent a substantial share of domestic demand.

← 2.  Restrictions based on national security grounds, such as prohibitions on the acquisition of land in border areas, are not considered in the FDIRRI.