Direct foreign investment in California rose last year despite the trade disruptions caused by President Trump’s tariffs, according to an annual tally released this week.
The number of foreign-owned enterprises rose 4% to 19,717, as did the number of jobs they supported, to 847,245, stated the report by the Los Angeles County Economic Development Corp.
The countries with the most foreign-owned businesses in the state were Japan, the United Kingdom, Canada, France and Germany — all of which have been in the top five since the nonprofit began measuring statewide investment several years ago.
Stephen Cheung, chief executive of the LAEDC, said the growth in foreign businesses was largely driven by tech industries in Southern California and the Bay Area, including AI, aerospace, defense and life sciences.
“Those types of industries are really driving those countries’ investments,” he said.
Among the newer tech companies doing businesses in the state, Cheung noted, are Japan’s Ebara Corp., a maker of semiconductor manufacturing equipment; U.K. venture company Improbable; and in aerospace, Germany’s MTU Aero Engines and France’s Thales Alenia Space.
Southern California accounted for more than half of all the businesses, with 11,840, supporting 501,679 jobs. The Bay Area accounted for 6,306 businesses, supporting 291,274 jobs.
Retail, manufacturing, and professional and business services accounted for the largest company gains. Leisure, education and health, and financial services also posted significant job gains.
The growth reflects business plans developed prior to the imposition of tariffs, noted Cheung, who added that next year’s report could show a slowdown due to the trade disruptions of 2025.
The list captures foreign-owned companies, as well as branches of foreign companies. It does not include businesses founded in California by foreign owners, a reason countries like South Korea — ranked 11th — are not higher on the report, Cheung said.
In taking the top spot, Japan nudged out the U.K. last year with 3,501 establishments accounting for 130,008 jobs.
Among the largest foreign companies are Japan’s Nissan Motor, Sony Group, Honda and Seven & I Holdings, the franchiser of 7-Eleven stores. U.K. businesses include food service company Compass, energy company BP and InterContinental Hotel Group.
But Cheung said that California’s attraction for foreign-owned businesses extended far beyond the Pacific Rim, given the predominance of European countries on the list.
French businesses includes food services and facilities management company Sodexo and luxury retailer LVMH. German companies include BMW and kidney dialysis provider Fresenius Medical Care.
Royal Bank of Canada, the owner of City National Bank in Los Angeles, is a notable Canadian company, along with Jim Pattison Group, which operates Save Mart and other supermarkets.
