Sweden has some of the most liberal foreign investment laws in the world. Sweden's corporate income tax rate of 28%, one of the lowest in Europe, makes Sweden an attractive target of foreign investors. It is open to nearly all foreign investment and allows 100% foreign ownership, except in certain transportation sectors (air and maritime) and in arms manufacture. For the period 1988–1990, Sweden was ranked third of 140 countries on UNCTAD's Inward FDI Potential Index, after the United States and Canada. For the period 1988–2000, Sweden was number two, behind only the United States.
Inward FDI flow was only $3.7 billion in 1993, but had reached $19.5 billion by 1998. FDI inflows peaked in 1999 at $60.8 billion, then moderated to $23.4 billion in 2000. The world economic slowdown and the collapse of the dot-com bubble reduced FDI inflows to $12.7 billion in 2001, and an estimated $11.5 billion in 2002. By 2001, cumulative FDI in Sweden totaled $155 billion, the 10th-highest total in the world. From 1998 to 2002, the 10 largest sources of inward FDI were, in order, the United Kingdom, Finland, Germany, the United States, Norway, Belgium, the Netherlands, Denmark, Canada, and Switzerland.
Sweden's outward FDI also rose steadily during the 1990s, from $1.4 billion in 1993 to a peak of $41.7 billion in 2000, ahead of inward FDI for the year by $18.3 billion. Outward FDI dropped to $6.2 billion in 2001 but rose to $11.3 billion in 2002. The countries with the largest net Swedish investment are Finland, the United States, Ireland, Norway, and the United Kingdom