Cross-Border Investments: Mapping the Flow of Capital and Influence

In an era of intertwined economies, the movement of funds across borders shapes our present and future. This article dives deep into the complex world of global investments, uncovering trends, regional shifts, and the transformative power of technology.

Global Investment Trends and Overview

After two consecutive years of decline, global foreign direct investment (FDI) showed signs of resilience in 2025. Although FDI fell by 3% in the first half of 2025 and by 11% in 2024 to $1.5 trillion, cross-border investment remained robust. By December 2024, cross-border assets under management had reached €7 trillion, representing a significant portion of total assets across regions outside North America.

Meanwhile, the cross-border payment market approached nearly one quadrillion dollars in combined traditional and crypto transactions in 2024. This astounding volume underscores the critical role of payments as an economic engine, facilitating trade, travel, and digital commerce.

The rise in cross-border spending, projected to hit $320 trillion by the end of 2025, demonstrates that capital flows continue to defy headwinds. Low-interest-rate environments in some regions, paired with government stimulus programs, have encouraged corporations and individuals to seek opportunities beyond their domestic markets.

Regional and Sectoral Investment Patterns

The United States remains a magnet for foreign capital, with non-U.S. investors driving notable growth in key real estate sectors during Q1 2025.

• Commercial real estate: Cross-border investment soared to $2.4 billion, more than double the previous year’s total, driven by strong demand for industrial properties.
• Hospitality: Investment volume climbed nearly thirteenfold to $284 million, highlighted by a $141 million acquisition of PGA National Resort by a British private equity firm.
• Multifamily: Investments totaled $800 million, marking a 23% decline year-over-year, while retail property investment fell by 40%, reflecting shifting consumer behavior.

Geographic distribution of U.S. commercial real estate investment demonstrates the scale of international engagement:

Secondary markets are also on the rise, with cities like Reno, Nevada, and several Sun Belt regions attracting significant capital due to onshoring trends, affordable land, and thriving logistics sectors. These movements highlight the flow of global capital into diverse and emerging locales.

AI and Technology-Driven Investment

Technology and artificial intelligence have emerged as top destinations for cross-border greenfield investment. The first half of 2025 saw greenfield project value rise by 7%, propelled by AI infrastructure and the digital economy.

Key highlights include:

• AI-related data center projects resulting in over $150 billion of announced investments in 2025, more than doubling the previous annualized levels.
• Semiconductor manufacturing attracting $103 billion in greenfield FDI in just six months, as nations vie for technological sovereignty.
• Data centers capturing $27 billion of investment, accounting for over 85% of FDI in the communications and software sector since 2022.

Investment vehicles from the Gulf Cooperation Council entered the fray, announcing multibillion-dollar projects across the United States and Europe. These initiatives underscore the acceleration of industries of the future as global competition intensifies.

Manufacturing and Supply Chain Trends

While investment in technology surges, supply-chain-intensive manufacturing has faced headwinds. Greenfield project announcements in textiles, electronics, and automotive sectors fell by 17% in number, driven by uncertainty around tariffs and trade policies.

Despite these declines, companies are reshoring critical operations and diversifying suppliers. The emphasis on resilience has created new opportunities in localized manufacturing hubs and logistic centers. Investors are evaluating projects with a focus on sustainability, efficiency, and risk mitigation within supply-chain intensive manufacturing sectors.

Automation, robotics, and digital twins play an increasingly important role in modernizing factories, further enticing cross-border capital looking to capitalize on productivity gains.

Infrastructure and Development Investment

International project finance remains vital for global infrastructure, though it has contracted in recent years. Deal numbers fell by 11% and value by 8% in the first half of 2025, contrasting with large-scale agreements in developing economies.

Significant projects in Panama, the United Arab Emirates, and Uzbekistan contributed to a 21% surge in total value for developing markets. However, overall greenfield infrastructure investment declined by 31% in value, with Latin America and the Caribbean particularly impacted.

In mature economies, renewable energy faces challenges, as renewable energy investment weakened amid policy shifts and financing constraints. Water and sanitation projects experienced a 40% drop in new commitments, raising concerns over SDG targets. Yet, targeted investments in agrifood systems and health in Asia offer a glimmer of hope, driven by rising demand and demographic trends.

Subsidies continue to play a nuanced role. Studies show that financial incentives like loans and guarantees can boost new cross-border projects by 7%, primarily in capital-intensive sectors in capital-abundant countries. This dynamic reinforces existing comparative advantages while incentivizing strategic expansions.

Venture Capital and Start-Up Investment

Cross-border venture capital fuels innovation and scale for high-growth companies. Regions such as Europe, Israel, and Canada have seen foreign investors participate in major funding rounds, often leading to successful exits.

In Europe, the UK remains a leader, with London hosting one of the world’s premier financial hubs. Canadian start-ups benefit from strong government support and growing tech ecosystems. Meanwhile, Israel’s reputation as a “start-up nation” continues to attract global capital seeking disruptive solutions.

Early-stage investors value access to emerging markets that offer novel talent pools, advanced research institutions, and supportive regulatory environments. However, policymakers grapple with the balance between welcoming foreign capital and nurturing domestic venture ecosystems. Measures such as tax credits, co-investment programs, and regulatory frameworks aim to bolster local participation while maintaining openness.

Policy Implications and Future Outlook

Cross-border investments present both opportunities and challenges. On the positive side, they offer global diversification helps reduce reliance on any single economy, unlocking growth in undercapitalized regions and fostering innovation worldwide.

Yet, concerns persist over economic sovereignty, potential capital flight, and uneven benefits. Governments must craft policies that encourage sustainable, inclusive investment. This includes strengthening regulatory transparency, promoting collaborative research, and ensuring that benefits reach local communities.

As geopolitical landscapes evolve and technology continues to transform industries, investors and policymakers alike must adapt. Mapping the flow of capital is not merely an academic exercise; it is a blueprint for shaping a more interconnected, prosperous, and equitable global economy. By understanding these patterns, stakeholders can make informed decisions that drive long-term value and collective progress.