Kearney's 2025 FDI Confidence Index® suggests mounting uncertainty among executives about the outlook for foreign direct investment

• Results from the 2025 survey capture a snapshot of investor sentiment last January. 
• Developed markets make up 19 of top 25 global markets, led by the United States, Canada, and the United Kingdom. 
• For the third year in a row, the FDI Confidence Index^® features an exclusive ranking for emerging markets. China, the United Arab Emirates, and Saudi Arabia lead the 2025 emerging market rankings.
• Despite overall enthusiasm about the European Union and its future, investor sentiment reflects concerns surrounding the bloc's competitiveness and economic and military power. 

WASHINGTON, April 8, 2025 /PRNewswire/ -- Kearney's Global Business Policy Council today released its 2025 Foreign Direct Investment Confidence Index (FDICI), a survey of investor sentiment regarding future (three-year) FDI flows. Now in its 27th year, the 2025 Index captures a distinct snapshot of investor sentiments at a moment of global inflection, with leadership changes in key economies following the 2024 election super cycle. Though there have been profound developments since the survey was in the field in January, key findings remain illuminating, particularly the value that investors place on efficiency of legal and regulatory processes, domestic economic performance, and technological and innovation capabilities.

"Investors highlight key risks in our 2025 Index," observed report co-author Erik R. Peterson, partner and managing director of Kearney's Global Business Policy Council. "Investors were likely responding to a persistent rise in industrial policy when they pointed to restrictive regulatory environments as a top concern. As economies attempt to bolster not only their domestic industries and resilience, particularly in strategic sectors related to national security, foreign investment becomes more difficult."

Roughly 38 percent of surveyed investors see a rise in commodity prices as the most likely development over the next year—up 12 percent from last year. The uptick is perhaps explained by investor fears of increased global conflict and subsequent supply chain disruptions that could drive commodity prices up. Related to this point, 35 percent of investors cite an increase in geopolitical tensions as a likely development in 2025, up 7 percent from last year. And ranked third is a more restrictive business regulatory environment in a developed market (32 percent), followed by a more restrictive business regulatory environment in an emerging market and political instability in a developed market (tied at 26 percent).

Erik R. Peterson notes: "For the first time in the history of our Index, we have asked respondents to share additional insights as to why they plan to invest in a specific market. This serves to illuminate the perceived strengths of each individual market, such as economic performance, talent and skill level, ease of doing business, degree of technology innovation, and natural resources, among others." He adds, "Across all markets, investors continue to highlight the importance of efficiency of legal and regulatory processes, domestic economic performance, and technology and innovation capabilities as the primary factors driving their investment decisions."

To that end, developed markets continue to dominate our rankings, making up 19 of the top 25 markets. The United States takes the top ranking on the world rankings, with a plurality of investors (45 percent) citing its technological innovation as the strongest reason they would choose to invest there. Canada retains the 2nd position and remains one of the top five markets for the 13th year in a row. The United Kingdom and Germany lead the way in Europe, holding 3rd and 5th place, respectively. In Asia, Japan's performance improves with a jump from 7th to 4th, and China slips from 3rd to 6th. And despite landing just two markets in the top 15, the Middle East is strongly represented with the United Arab Emirates and Saudi Arabia landing at 9th and 13th, respectively.

Terry Toland, principal at the Global Business Policy Council and co-author of the report, adds that "While Europe-based investors tended to be comparatively more pessimistic about the outlook for the EU, it is noteworthy that the EU remains home to the foundational strengths that appeal most to investors, including strong institutions, trusted legal and regulatory processes, and a highly educated workforce. As a result, European markets continue to perform well in our global rankings."

The thematic section this year explores investor perceptions of the European Union. Results reveal that 69 percent of respondents hold a favorable view of the EU. And 60 percent agree that they prefer to do business in the EU over any other region. Nevertheless, immigration challenges, economic stagnation, and expansion of the conflict in Ukraine remain significant areas of concern. Further, there are significant differences in perceptions of the EU across regions: Europe-based investors are generally more pessimistic about the EU's position on the world stage compared to Americas and Asia Pacific counterparts in assessing issues related to competitiveness and economic and military power.

The third annual ranking for emerging markets welcomes newcomers Kuwait and Bulgaria to the top 25. Overlap between the global rankings and the emerging market rankings include China at number one, followed by the United Arab Emirates, Saudi Arabia, Brazil, India, and Mexico. More broadly, the Americas boasts the most markets on the list with eight (down one from last year), followed by Asia Pacific at seven, the Middle East and Africa at five, and Europe also at five (up one from last year).

About the 2025 Kearney FDI Confidence Index^® 

The Kearney FDI Confidence Index^® is an annual survey of global business executives that ranks markets that are likely to attract the most investment in the next three years. In contrast to other backward-looking data on FDI flows, the FDICI provides unique forward-looking analysis of the markets that investors intend to target for FDI in the coming years. Since the FDICI's inception in 1998, the markets ranked on the Index have tracked closely with the top destinations for actual FDI flows in subsequent years.

The 2025 Kearney FDI Confidence Index^® is constructed using primary data from a proprietary survey of 536 senior executives of the world's leading corporations. The survey was conducted in January 2025. Respondents include C-level executives and regional and business leaders. All participating companies have annual revenues of $500 million or more. The companies are headquartered in 30 countries and span all sectors. Service-sector firms account for 53 percent of respondents, industrial firms for 35 percent, and IT firms for 12 percent.

The Index is calculated as a weighted average of the number of high, medium, and low responses to questions on the likelihood of making a direct investment in a select market over the next three years. Together, the markets presented to respondents in the survey received 97 percent of the world's inward FDI flows in 2023, according to UNCTAD data.

Index values are based on responses only from companies headquartered in foreign markets. For example, the Index value for the United States was calculated without responses from US-headquartered investors. Higher Index values indicate more attractive investment targets.

All economic growth figures presented in the report are the latest estimates and forecasts available from Oxford Economics unless otherwise noted. Other secondary sources include investment promotion agencies, central banks, ministries of finance and trade, relevant news media, and other major data sources.

About Kearney

As a global consulting partnership in more than 40 countries, our people make us who we are. We're individuals who take as much joy from those we work with as the work itself. Driven to be the difference between a big idea and making it happen, we help our clients break through.

To learn more about Kearney, please visit www.kearney.com.

For past editions of the FDI Confidence Index, please go to:

www.kearney.com/foreign-direct-investment-confidence-index.

For more information, contact the Global Business Policy Council ([email protected]).

Media contact:

Meir Kahtan
Meir Kahtan Public Relations, LLC
+1 917-864-0800
[email protected]

SOURCE Kearney