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FDI

FDI Projects & Stocks

Germany counts among the world’s leading foreign direct investment (FDI) destination countries.

Germany is one of the world's most attractive business and investment locations. Within the European Union, the country enjoys a reputation as the preferred business destination for international investors.

FDI Data

Germany ranks among the world’s top ten FDI recipient countries according to the United Nations Conference on Trade and Development (UNCTAD).

European Stocks on Top

According to official Bundesbank (“German Central Bank”) statistics for 2022, almost half – or EUR 335 billion – of all FDI stocks in Germany originate from within the European Union. A further 17 percent stem from the remaining European non-EU countries. Investment from outside the EU also continues to grow. North America accounts for 22 percent of FDI stock, while Asia holds an eleven percent share. The total amount of foreign FDI stocks in Germany amounts to EUR 681 billion.

Continued Interest in Greenfield Investments

Between 2019 and 2023, fDi Markets recorded more than 6,100 investment projects by some 4,900 foreign companies in Germany. In 2023, approximately 1,200 projects were established, making it one of the best recorded results to date.  Germany is placed third worldwide in terms of FDI projects attracted. Foreign direct investment results are based on greenfield project announcements (including expansions and joint ventures) collected in the Financial Times Group's fDi Markets database.

The most important countries as sources for new investment projects are the USA (18 percent of all investment projects since 2019), Switzerland (10 percent) as well as the UK (10 percent), the Netherlands (seven percent) and China (seven percent). The majority of projects were realized in the strategic industries of “digitalization” (22 percent of new projects), and electronics & robotics (16 percent). Other industrial growth driver sectors include mobility & logistics, energy & resources and healthcare & life sciences.

Most new projects open sales and marketing & support offices. One in eight investment projects is a manufacturing site or R&D-facility – making Germany an important business location for international investors. 

FDI Reputation

Want to know what makes Germany so attractive? Renowned FDI studies provide the answers.

First choice in Europe

Several studies this year (2023) have confirmed the attractiveness of the German location. Both Kearney's "FDI Confidence Index" and "EY UK Attractiveness Survey" confirm Germany's reputation as the most attractive location in Europe.

A recent study (2023) conducted by the American Chamber of Commerce highlights the positive image in which the German business environment is held by US companies. Invited to indicate how attractive the German investment environment is coming out of the pandemic, 62 percent of the participating American companies replied the investment conditions are either „very good/good“ or stayed the same. A further 88 percent want to either expand or maintain their current activities in Germany over the next three to four years.

Mergers and Acquisitions (M&A)

In most cases, foreign investors can acquire stakes in German companies without restriction. The Federal Ministry for Economic Affairs and Climate Action (BMWK) may however review and, where necessary, prohibit acquisitions of German domestic companies.

Greenfield investments, where a new company is established, are not affected by the review. The scope of the review procedure is limited to acquisitions of domestic companies as well as substituting transactions  - such as asset deals involving all significant assets of domestic companies.

The subject of the cross-sectoral investment review is whether the acquisition is likely to affect the security or public order of Germany, another member state of the EU or specific projects/programs of EU interest. Any acquisition of 25 percent or more of the voting rights of a company located in Germany by investors based outside the EU or the EFTA region can be subject to such review. 

  • If the domestic target company in particular operates critical infrastructure or provides other specific security-relevant services related to the operation of such infrastructure, BMWi can review acquisitions of 10 percent or more of the voting rights. 
  • For acquisitions of domestic companies operating within the field of specific emerging technologies - for example semiconductors, AI, 3D printing or quantum technologies -  a review threshold of 20 percent or more of the voting rights applies.

Investments falling under one of the two above-mentioned groups with a review threshold of 10 or 20 percent of the voting rights must be reported to the BMWK.

Under the sector-specific investment review, special rules apply to the acquisition of domestic companies that operate in sensitive security areas (e.g. manufacturers and developers of weapons and other military key technologies). Under these rules, the BMWK can review whether an acquisition of 10 percent or more of the voting rights of a domestic company by any foreign buyer poses a threat to German essential security interests. These acquisitions are also subject to a notification obligation.

At the European level the FDI Screening Regulation establishes an EU-wide framework in which the European Commission and the Member States can coordinate their actions on foreign investments. The main purpose  is to help identifying and addressing security or public order risks that affect at least two Member States or the EU as a whole by establishing a cooperation mechanism between the Member States and the European Commission. National screening machanisms remain the exclusive responsibility of the Member States.

For further information on investment reviews in Germany please refer to the Federal Ministry for Economic Affairs and Climate Action.


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