This policy note explores the different ways in which the digital economy affects investment promotion. As foreign direct investment (FDI) can be a key driver of digital growth and transformation, investment promotion agencies (IPAs) are increasingly seeking to attract firms operating in digital sectors or activities. In turn, IPAs also need to undergo their own digitalisation to become more efficient and improve their performance. Investment promotion practices need to respond to the challenges posed by new technologies and adapt new business models – particularly in the COVID-19 context.