According to the latest quarterly report by law firms Wright, Johnston & Mackenzie (WJM) and Irwin Mitchell, Edinburgh has replaced Brighton as the highest-ranking UK city outside of London for Foreign Direct Investment (FDI) attractiveness.

The study, which incorporates the latest analysis by the Centre for Economics and Business Research (Cebr), examines recent changes to the Foreign Direct Investment (FDI) attractiveness of 50 locations based on 10 economic indicators*.

It shows 11 of the top 20 FDI hotspots are currently in Scotland, the Midlands, and the North of England. It also reveals these locations account for around 80 per cent of the 24 cities which improved their ranking position compared to Q3 2024.

Scotland’s capital moved up to fourth position with an overall score of 49.1. The report says Edinburgh’s strong performance is founded on its consistent performance across all three pillars comprising the Index.

Edinburgh demonstrates robust performance in the infrastructure category, attributed to its extensive public transport usage and the interconnectivity of its transport network, along with advanced digital infrastructure.

Regarding its growth potential, Edinburgh’s overall score has risen from July 2024, driven by relatively strong employment growth forecasts for 2025. The report adds that, although the city’s score in the skills category fell slightly, it remains strong due to institutions like the University of Edinburgh.

 Quarter-on-quarter change in FDI Attractiveness score across Q4 2024 and Q3 2024 (Irwin Mitchell / Cebr)

Fraser Gillies, managing partner at Wright, Johnston & Mackenzie LLP, which has five bases across Scotland including an office on Edinburgh’s St Andrew Square, commented on the findings: “Edinburgh’s strong performance in the previous report was already impressive, and it is particularly pleasing to see the city move even further up the league table.

“This consistent improvement highlights Edinburgh’s robust local infrastructure and growth potential, making it an increasingly attractive destination for foreign investment.”

Aberdeen is another Scottish city that is performing strongly, moving up 18 places in the league table. This was attributed to comparatively strong employment growth forecasts and its relative distance from the North East Scotland Investment Zone.

FDI Attractiveness – Biggest risers and fallers according to league table position change (Source Irwin Mitchell / Cebr)

Investment Zones in the UK are designated areas where the government collaborates with local authorities and businesses to foster economic growth and innovation. These zones aim to leverage local strengths and untapped potential by offering a range of incentives, including tax reliefs, planning support, and business assistance.

The North East Scotland Investment Zone was announced in 2023 as part of a collaborative effort between the Scottish and UK governments. The initiative aims to boost the region’s economy through targeted investments, tax reliefs, and other incentives over a five-year period.

Pushpin Singh, Senior Economist at Cebr, said: “Our findings underscore the transformative potential of Freeports and Investment Zones in reshaping the UK’s investment landscape.

“Cities like Aberdeen, Liverpool, and Newcastle are emerging as significant beneficiaries, demonstrating how targeted infrastructure and skills development could potentially create hubs of economic opportunity.”

The Office for National Statistics recently published the latest FDI statistics, revealing that the value of the UK’s inward FDI position increased by £126.8 billion, reaching £2,068 billion.

According to the latest statistics from the Department for Business and Trade, 1,555 projects landed in the UK during the 2023/24 financial year as a result of FDI, resulting in 71,478 new jobs being created. Out of these projects, 1,023 represented new investment, with 357 involving an expansion of an existing investment, and the remainder accounted for by mergers and acquisitions including joint ventures.