Kearney report: Switzerland remains an attractive destination for foreign investors
Despite a slight drop in the ranking, the 'Foreign Direct Investment Confidence Index (FDICI) 2024' by global management consultancy Kearney confirms that Switzerland is highly attractive to foreign investors. For the first time, the ranking also included the topic of AI, which now plays a role for 72% of the companies surveyed. The USA holds first place for the 12th time, followed by Canada and China, which rises from 7th place to the top 3.
The 'Foreign Direct Investment Confidence Index (FDICI) 2024' by global management consultancy Kearney continues to give Switzerland a good report card. "Although the country slipped from 12th to 13th place in the ranking, Switzerland remains an attractive destination for foreign investors thanks to its economic and political stability, its transparent and fair legal system, its reliable and extensive infrastructure and its efficient capital markets," says Victor Dijon de Monteton, Partner at Kearney Switzerland. The survey, conducted in January 2024 in 30 countries, reflects the opinion of senior executives in leading global companies with an annual turnover of at least 500 million US dollars.
Switzerland is world champion in innovation
Switzerland also ranks 6th out of 180 markets in Transparency International's 2023 Corruption Perceptions Index, highlighting its strong ethical practices and stability. Furthermore, in August 2023, the Swiss government announced draft new regulations to tighten money laundering rules, making lawyers and advisors responsible for reporting risks and strengthening oversight of legal entities, including trusts. All future real estate transactions will also be subject to due diligence. Cash payments for precious metals and gemstones are to be subject to a money laundering check from a value of 15,000 Swiss francs (17,055.14 $), instead of 100,000 francs as previously. Switzerland is also a world champion in innovation, taking first place out of 132 economies in the World Intellectual Property Organization's (WIPO) Global Innovation Index 2023.
USA in first place for the 12th time, China in the top 3 for the first time
The USA has taken first place in the ranking for the 12th time in a row. The strength of the US economy, which is considered the fastest growing in the G7, and the resurgence in consumer sentiment have likely contributed to this ranking. Canada also performs strongly and retains its second place. Canada thus remains one of the top five markets for the 12th consecutive year. China jumps from 7th position to 3rd, which can be partly explained by the easing of capital controls for foreign investors in Shanghai and Beijing in September 2023. Japan, on the other hand, falls from 3rd to 7th place, probably reflecting the market's ongoing economic problems, which fell into recession in the fourth quarter of 2023. Overall, this year's survey shows investors' preference for developed markets, which make up 17 of the 25 markets in the index. Nevertheless, emerging markets continue to expand their presence on the list, with the United Arab Emirates and Saudi Arabia seeing particularly notable rises from 18th to 8th place and 24th to 14th place respectively.
AI plays a decisive role in investment decisions
For the first time, the authors of the FDICI have considered the topic of AI, which is spreading rapidly: 72% of the companies surveyed state that they have already significantly or moderately integrated AI into their business processes. They assume that their company will use AI for customer service and chatbots, to automate manual processes and to improve supply chains in the future. According to the index, almost two thirds of respondents say that their company will expand the use of AI in investment decisions over the next three years. Investors cite cost or efficiency savings as the driving force behind this.
Emerging markets expand their presence
Overall, this year's index shows that while investors continue to favor developed markets, emerging markets are also expanding their presence. For the second year in a row in the history of the FDICI, the index provides an exclusive ranking for these countries. Led by China, the United Arab Emirates, Saudi Arabia, India, Brazil, Mexico, Poland and Argentina occupy the top eight places. They are the only emerging markets to be included in the world ranking. China jumps from 7th to 3rd place, while the United Arab Emirates and Saudi Arabia are also among the top 3 emerging markets. Both countries have implemented significant corporate and legal reforms in recent years, which are crucial for foreign investment and promise further economic growth. Globalization remains the driving force behind foreign direct investment.
Source: www.kearney.ch
