Regulatory restrictions are only one element of an economy’s investment climate, but evidence shows that less restrictive FDI regimes are associated with higher levels of foreign investment. Monitoring statutory restrictions therefore remains important for identifying opportunities for reform and supporting broader efforts to maximise the contribution of FDI to sustainable development.
The 2025 FDIRRI results suggest that the broad liberalisation trend of previous decades has slowed considerably, without giving way to a generalised reversal. Average restrictiveness across the 106 covered economies increased marginally for a second consecutive year, but most economies (95) recorded no change and more liberalised than tightened. The increase was instead driven by a small number of relatively large tightening measures, prolonging the recent interruption of the longer-term liberalisation trend rather than signalling a broad shift towards more restrictive FDI policies.
Substantial differences in openness nevertheless persist across economies, regions and sectors. Non-OECD economies remain considerably more restrictive on average than OECD Members, with MENA, East Asia and the Pacific, and Sub-Saharan Africa recording the highest regional restrictiveness levels. Foreign equity limits continue to account for most measured restrictiveness, while barriers remain concentrated in selected primary activities and services, particularly media, real estate, transport, agriculture, fisheries and legal services. These patterns point to opportunities for reform, particularly where equity limits and other significant barriers in highly restricted activities continue to constrain foreign participation and policy objectives could be achieved through less restrictive means.
The reforms recorded in 2025 also illustrate an increasingly selective pattern of investment policymaking, with changes predominantly taking the form of targeted adjustments rather than broad-based liberalisation or tightening. Liberalising measures generally addressed specific barriers while often retaining partial conditions or safeguards in sensitive activities. Tightening measures similarly reflected specific domestic policy objectives related to local ownership and participation, public procurement and other conditions in selected activities. While some measures concerned strategically important activities, they do not point to a systematic shift towards restrictions directly associated with current geopolitical or national-security concerns. This relative stability in statutory FDI restrictions should nevertheless be viewed against the broader policy environment in which governments are making increasing use of industrial, trade, innovation and security-related policies to pursue strategic objectives and influence the location and composition of investment.
Security considerations are becoming more prominent within the investment-policy landscape. Security-related investment screening continued to expand within and beyond the OECD area. As such mechanisms spread, maintaining transparent, proportionate and non-discriminatory frameworks is ever more important for safeguarding legitimate security interests without unduly discouraging beneficial investment.
As reforms to discriminatory FDI restrictions become less frequent and such restrictions remain concentrated in selected primary activities and services, regional and multilateral initiatives may provide additional impetus for domestic reform. Such initiatives can support further liberalisation while also promoting broader improvements in transparency, predictability, regulatory coherence and investment facilitation. For example, the WTO Investment Facilitation for Development Agreement, should it enter into force, and regional frameworks aimed at deepening investment integration can support governments in addressing remaining discriminatory restrictions as part of broader investment-climate reforms.
This may be particularly relevant in regions where restrictiveness remains comparatively high. In Africa, the African Continental Free Trade Area (AfCFTA) and its Protocol on Investment provide a continent-wide framework for deeper investment integration and more predictable investment conditions (UNECA, 2025[29]). More open and predictable frameworks could help broaden the investment base and support more sustained inflows across the continent (AfDB, 2026[30]). In Asia, the ASEAN Comprehensive Investment Agreement and the ASEAN Trade in Services Agreement (ATISA) provide frameworks for progressive liberalisation and greater transparency and predictability of investment barriers (ASEAN and UNCTAD, 2025[31]). Sustained implementation of these frameworks can complement domestic reform and support further liberalisation.
Ultimately, greater regulatory openness is, however, only one condition for attracting investment and maximising its benefits. The wider investment climate and effective implementation of reforms remain critical. Strong institutions, effective public governance, infrastructure, skills and domestic linkages, among other structural factors, remain important for translating foreign investment into productivity gains and sustainable development.