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21 May, 2021updated 12 Oct 2021 05:36

Germany’s 2020 FDI figures exceed expectations

More than 2,000 foreign business investment projects were recorded in Germany in 2020 despite the Covid-19 pandemic.

By Naomi Davies

frankfurt-germany-fdi

Business hubs such as Frankfurt have helped to maintain a steady flow of FDI into Germany throughout the Covid-19 pandemic. (Photo by Daniel Roland/AFP via Getty Images)

Germany Trade & Invest (GTAI) recently published its foreign direct investment (FDI) report,which reveals that more than 2,000 foreign business investment projects were recorded in Germany in 2020. Of these projects, 1,684 were greenfield investments, expansions or relocations and 372 were mergers and acquisitions.

Germany’s 2020 FDI figures were down 9% compared with 2019 due to the Covid-19 crisis, but still exceeded expert predictions. As GTAI chief executive officer Robert Hermann explained: “The decline is anything but surprising considering the global coronavirus crisis, but the UN Conference on Trade and Development predicted that foreign business investments would decline by 15%, so 9% is ultimately positive news.”

The US was the top source country for investment in Germany with US-based companies responsible for 254 projects in 2020, followed by Switzerland (219) and China (170). Notable projects include China-based high-tech company SVolt’s planned €2bn investment in two battery cell factories in Saarland.

The leading sector for investment was ICT and software, representing 19% of all greenfield FDI projects and expansions. It was followed by business and financial services (17%), consumer goods (10%) and industrial machinery and equipment (9%).

Sales, marketing and support operations accounted for almost 40% of all greenfield FDI projects and expansions in 2020, followed by manufacturing and R&D with 19% and business services with 18%.

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