Australia's FDI profile: steady magnet, careful gatekeeper

Australia is a mid-sized economy that punches above its weight as a destination for foreign direct investment. In 2024 it received $53.7 bn of net FDI inflows, the 8th largest amount of any economy and 3.4% of the world total — against an economy that accounts for about 1.6% of world GDP.

A long record of inflows

Inflows have grown from $893 m in 1970 to an average of $44.5 bn a year over the decade to 2024, 11% more than in the previous ten years. The largest year on record was 2022, at $68.7 bn. Net inflows can also turn negative: in 2005 the figure was −$25.1 bn, reflecting large corporate restructurings and disinvestment rather than a collapse in new investment. It is a reminder that net flows can swing on a handful of transactions.

How Australia compares

Dollar amounts favour big economies, so the fairer comparison is inflows relative to GDP. Over the ten years to 2024, Australia averaged 3.0% of GDP, ranking 1st of the 5 comparable Anglophone economies shown below (Australia 3.0%; United Kingdom 3.0%; Canada 2.5%; United States 1.6%; New Zealand 1.5%). In 2024 alone the figure was 3.1%. Single years are noisy — the United Kingdom in particular swings widely because of large financial-sector transactions — so the ten-year average is the better guide.

Who invests in Australia

The Australian Bureau of Statistics publishes the stock of foreign direct investment in Australia by investing economy. At the end of 2025, the largest investor was the United States, with A$258 bn or 19.8% of the total (up from A$186 bn ten years earlier), followed by Japan and the United Kingdom. These figures attribute investment to the immediate investing country: money routed through a holding company in a third country is credited to that country, not to the ultimate owner. The Australia hub has the full partner table back to 2001.

What foreign investors own

By industry, the largest share of foreign direct investment in Australia at the end of 2025 was in mining, at A$399 bn or 31% of the total, followed by financial and insurance services (13%). Resources have long been central to Australia's foreign investment story, but finance, real estate and manufacturing also carry substantial weight.

Open, but screened

Australia combines openness to foreign capital with case-by-case review of sensitive proposals. Under the Foreign Acquisitions and Takeovers Act 1975, the Treasurer can block or place conditions on proposals found to be contrary to the national interest, on advice from the Foreign Investment Review Board (FIRB). There is no fixed definition of the national interest; reviews typically weigh national security, competition, other government policies (including tax), the effect on the economy and community, and the character of the investor. Reforms that took effect in 2021 added a separate national security test, and monetary thresholds for review are lower for sensitive sectors, agricultural land, and investors linked to foreign governments.

The OECD's FDI Regulatory Restrictiveness Index measures statutory restrictions such as screening, equity caps and limits on key personnel. The index is not in the current data snapshot; see FDI openness when it is available.

None of this has stopped Australia being one of the larger destinations for FDI among advanced economies. The policy debate is less about whether to welcome foreign capital than about how to screen efficiently: keeping review times short for low-risk proposals while concentrating scrutiny where genuine risks lie.