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

The study, which incorporates the latest analysis by the Centre for Economics and Business Research (Cebr), shows eleven of the top twenty FDI hotspots are currently in Scotland, the Midlands, and the North of England, with these locations accounting for around 80% of the cities which improved their ranking position compared to Q3 2024.

Scotland’s capital moved up to fourth position following the three London locations, with an overall score of 49.1, and the report highlighting the city’s consistent performance across all three pillars comprising the Index.

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

According to the study, Edinburgh also performed well in the infrastructure category, attributed to its extensive public transport usage and the interconnectivity of its transport network, along with advanced digital infrastructure.

“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,” said Fraser Gillies, managing partner at Wright, Johnston & Mackenzie.

“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 performed strongly, moving up 18 places in the league table, a rise attributed to comparatively strong employment growth forecasts, as well as the city’s distance from the North East Scotland Investment Zone.

Announced last year, the North East Investment Zone is part of a collaborative effort between the Scottish and UK Governments, aiming to boost the region’s economy through targeted investments, tax reliefs, and other incentives over a five-year period.

Across the UK, these zones are designed to leverage local strengths and untapped potential by offering a range of incentives, including tax reliefs, planning support, and business assistance. 

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.”

Foreign direct investment has been growing across Scotland, with data from EY showing that in 2023, Scotland’s share of UK FDI projects increased for a fifth year in a row to 14.4%. The report found that over 140 FDI projects were secured last year, double the rate of growth experienced across the UK.   

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The Office for National Statistics recently published the latest FDI figures, revealing that the value of the UK’s inward FDI position increased by £126.8 billion, reaching £2.068 trillion.

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.