Inward investment into the UK jumped by 31% last year, creating almost 39,600 jobs, according to the Department of Trade and Industry.
That was up from 25,463 jobs created by 811 investment projects the previous year.
Trade and industry secretary Alan Johnson said international comparisons showed the UK was Europe’s top investment destination.
“The predictions of the death knell for inward investment in the UK have been proved wrong,” he said.
The North-West and South-East took the largest share of new jobs with more than 5,000 each.
US companies were the largest creators of new jobs with 17,700, followed by German businesses with 5,200 and Japanese companies with 3,300 jobs.
The manufacturing sector was the most successful, followed by the services sector.