Foreign investment in Europe falls by 4% – investment in Switzer-land rises by 53%

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• 2023: decrease of 4% in the number of foreign investment projects in Europe; increase of 53% in Switzerland (89 projects, up from 58)
• In 2023, 1,781 new jobs were created in Switzerland, a sharp increase of 416% on the previous year
• France and the United Kingdom are the top-ranked countries for 2023, followed by Germany, Turkey and Spain
• With 1,058 projects, US companies are the top investors in Europe, creating over 71,000 jobs in 2023
• Swiss companies create more than 12,000 jobs in other European countries, a decline of 11%

Zurich, 2 May 2024. – In total, 5,694 investment projects across Europe were announced by foreign investors last year, a fall of 4% (5,962 projects in the previous year). This is way below the pre-pandemic level: in Europe as a whole, investment activity was 11% lower than in the pre-pandemic year of 2019 and as much as 14% lower than in the record-breaking year of 2017.

France remains top of the European rankings – despite a fall of 5% in the number of investment projects to 1,194. 2nd place goes to the United Kingdom with an increase of 6% in the number of projects to 985, followed by Germany (733 projects, –12%), Turkey (375 projects, +17%) and Spain (304 projects, –6%).

Among the major European locations, Switzerland and Turkey fared particularly well: thanks to an increase in investment of a whopping 53%, Switzerland moved up to 12th place (the number of projects rose to 89, up from 58 in the previous year). In all, 1,781 new jobs were created last year in Switzerland (2022: 345), a rise of 416%. Turkey recorded an increase in investment of 17% and now comes fourth in the rankings behind Germany. Commenting on the sharp rise in investment in Switzerland, André Bieri, Markets Leader Switzerland & Liechtenstein for EY in Switzerland, said: “Switzerland remains a highly attractive location as a gateway to the European market and offers very attractive location factors in combination with an attractive tax system for companies and private individuals. In addition, the BEPS initiative to introduce a minimum tax rate is not having a major impact on the attractiveness of Switzerland as a location for investment.”

These are the results of a study by the assurance and advisory firm EY in Switzerland on investment projects carried out by foreign companies in Europe. The study covers investment projects that lead to the creation of new sites and jobs; it does not cover portfolio and M&A investment.

Swiss companies create more than 12,000 jobs in other European countries

In the case of new jobs created by investors in 2023, Switzerland is in 7th place with 12,122 new jobs. Swiss companies created 11% fewer jobs in other European countries than in the previous year. Around 10% of the jobs created by Swiss companies were in Germany (1,299 jobs). The top 5 positions in these rankings are occupied by the United States (71,331 new jobs, –14% compared with the previous year), Germany (47,690 new jobs, +4%), France (21,424 new jobs, +24%), China (16,010 new jobs, –25%) and the Netherlands (14,568 new jobs, +48%).

A look at the individual sectors shows where the majority of the new jobs were created. The rankings are headed by the automotive/vehicle industry (51,472 new jobs), followed by software & IT services (42,214 jobs), the electronics industry (30,332 jobs), transport & logistics (26,414 jobs) and corporate services (24,028 jobs).

In the 2023 investor rankings, in which the number of projects are ranked according to the investor’s country of origin, Switzerland comes 7th with 235 projects (–5% compared with 2022). Of these 235 investment projects, 47 were in Germany. The top 5 places are taken by the United States (1,058 projects, –15% compared with the previous year), Germany (620 projects, –10%), United Kingdom (379 projects, –27%), France (305 projects, +4%) and China (257 projects, +13%).

This meant that US companies were still the most important investors in Europe last year, even though they significantly reduced their investment. “The US location policy is proving effective”, says Bieri. “US groups are evidently stepping up their investment in their own country and scaling it back in Europe.” In addition, the US Inflation Reduction Act has further intensified the competition between locations, says Bieri – and Europe has yet to come up with an answer: “The United States are awarding massive tax credits and/or subsidies for reinvestment and new investment, with investment in innovation and green technologies also being heavily subsidised. This is sharply reducing investment costs and has considerably widened the gap between the United States and the competition as a location for investment.”

Methodology

The study covers FDI projects that have led to the creation of new sites and jobs. As the areas of portfolio investment and M&A are not covered, the data included show the extent to which foreign companies actually invest in manufacturing and service companies in Europe.

However, the figures also include investment in property, plant and equipment, for example technical equipment and operating and business equipment. Valuable conclusions can be drawn from these data on how FDI projects are conducted, the activities in which there is investment, where these projects are localised and who is executing them.

Investment projects for the following categories are not covered by the database: M&A and joint ventures, portfolio investment and licence agreements.

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