Location debate: Study: US companies avoid Germany in investments

According to an analysis, the commitment of US companies in Germany is rapidly due to an analysis. In 2024, the number of her investment projects fell by 27 percent to 90. “In other countries, the minus in the US investment projects was significantly less drastically-among the top locations in Europe, Germany recorded the strongest break-in,” said the head of the examination and consulting company EY, Henrik Ahlers. The number of US projects all over Europe dropped only by eleven percent.

The United States location was apparently strengthened at the expense of the European countries. An improvement in the situation is not to be expected – on the contrary: “The aggressive and erratic customs policy of the US government has led to massive uncertainty at large companies worldwide, which initially put their investment plans on hold due to the unclear framework conditions.”

At the same time, according to the analysis, other actors are becoming more important: China became the most important investor in Germany for the first time. Ey counted 96 projects (minus three percent) of companies from the People’s Republic in this year – and thus more than from the USA. According to the study, Germany was by far the most popular goal in Europe for Chinese investors.

Project number almost halved since 2017

Overall, the number of foreign investment projects in Germany dropped to 608 – a decline of 17 percent compared to the previous year and the lowest value since 2011. The highest number of foreign investments in the location recorded with 1124 projects in 2017. Since then, the number has dropped continuously – a total of 46 percent. No other larger European location has recorded such a strong decline.

The number of new resettlement and expansion projects that started or carried out foreign investors fell by five percent across Europe to 5,383. In France and Great Britain, too, the number fell – but both countries remain well in front of Germany in the ranking.

EY has been carrying out the study since 2006. For this purpose, investment projects were taken into account that leads to the creation of new locations and new jobs. Other investments such as participations, mergers and corporate purchases have not been recorded. Ey does not provide information on the investment volume.

Ahlers: Germany loses ground

From Ahler’s perspective, Germany has lost massive attractiveness in recent years – and there have been numerous reasons for this for years. “While other European countries have done their homework and, for example, advanced the digitization of public administration and worked on their welcome culture for companies, Germany loses ground,” he said. High taxes and labor costs, expensive energy, bureaucracy and now also the sustainably weakening economy increasingly frightened investors from abroad.

The EY boss sees reforms as a central lever to strengthen Germany again. The billion-dollar investment package of the new black and red federal government and reduction in bureaucracy could “stop the current downward spiral and create a spirit of optimism”. However, reliable framework conditions, lower taxes and faster permits are decisive.

German companies active in Central and Eastern Europe

While foreign capital increasingly avoids Germany, German companies in the study invest more in other European countries- especially in Central and Eastern Europe. The number of German investment projects in this region rose by 22 percent in 2024. In total, German companies performed 633 investment projects in Europe – an increase of two percent. With 942, only US companies pushed more projects.