Abu dhabi: Governments around the world are not shying away from foreign investment; however, the rules governing such investments are evolving. According to Emirates News Agency, a record 229 investment policy measures were adopted by governments in 2025. While most of these policies remain favorable to investors, there is a noticeable trend where policymakers are directing investments towards industries they deem critical for growth and economic security.
The significant number of measures introduced in 2025 reflects a broader change in how countries view investment. The focus has shifted from merely attracting capital to ensuring that investments align with national priorities. This change is not indicative of a shift towards protectionism. Of the 229 measures, 167 were investor-friendly, accounting for 73% of the total. Unlike the broad liberalization seen in previous decades, these measures are designed to channel investment towards specific sectors, technologies, and activities.
Developing Asia has been particularly active, focusing on industrial upgrading, digital transformation, and green investment. Europe has concentrated on industrial policy initiatives and investment screening, while Latin America and the Caribbean have emphasized investment facilitation and retention. In Africa, favorable investment measures also outnumbered restrictive ones.
Governments are increasingly scrutinizing the origins and targeted sectors of investments. Restrictive measures rose to 27% of all policy changes in 2025, up from 19% in 2016. This increase is largely due to concerns related to investment screening and national security. The number of economies with investment screening regimes increased from 21 in 2016 to 52 in 2025, particularly in sectors involving critical technologies, sensitive data, infrastructure, and strategic assets.
Despite the rise in screening, outright rejection of projects remains rare. Fewer than 1% of screened projects were blocked, indicating that governments are attempting to balance security concerns with the need to attract investment. The challenge lies in keeping screening processes transparent, targeted, and risk-based to protect legitimate security interests without stifling development opportunities.
The shift towards strategic and security-sensitive investments is also impacting the international investment agreement system. In 2025, countries signed 44 investment agreements, with newer treaties focusing more on facilitation and cooperation. However, disputes continue to rely on older treaties.