In the communications sector, GTL Europe opened four new offices, while engineering company Dynamatic Technologies continued to expand its operations in the UK, says the UK Trade and Investment report. UKTI is the UK government’s main inbound and outbound investment department.

Despite the recession, UK has managed to retain its position as the world’s second favourite destination for setting up new projects, second only to the United States. New projects, including establishing offices and headquarters, have gone up – 251 HQ and European head offices were set up - but this year’s results show a marked decrease in M&A and joint venture activities, down 6%.

Another key trend is the change in sectoral composition – creative industries emerged as the fastest growing new sector, with inward investments rising by about 65%, though on a lower base. Software, advanced engineering, business services, ICT and Life sciences were the other favourite sectors for foreign investors.

Reiterating UK’s stance on ‘open for business,’ Lord Peter Mandelson, business secretary said “The UK maintains the best effective regulatory environment for global investors and businesses to thrive. We have to assess the merits of regulations, to consider if there are alternatives and, if there aren’t, ensure they are smart and do not serve to suffocate businesses,” he said.