Germany Books Massive Foreign Business Direct Investment Increase in 2022

Despite the economic turmoil following Russia’s war on Ukraine, 2022 was a record year for international business expansion to Germany. That’s the conclusion of the annual FDI Report by Germany Trade & Invest (GTAI), the government’s international business promotion agency. 

Companies from various parts of the world committed to expansions worth a head EUR 25.3 billion. Intel’s decision to build new megafab production facilities in Magdeburg accounted for EUR 17 billion. But even when that behemoth investment is factored out, FDI into Germany was still EUR 8.3 billion – a significant increase over the 7 billion in 2021.

“This performance is very impressive,” says GTAI CEO Robert Hermann. “Given all the negative factors, many people would have predicted FDI levels would decline. But the German economy showed its strength.” In terms of absolute numbers of business expansion projects, the situation roughly held steady at 1,783 projects (down 23 from 2021). Ten percent more American companies (279 projects in total) opted to set up shop in Europe’s largest economy, making the US the top source country. Incoming FDI from second-ranking Switzerland was slightly down while FDI from Britain (170 projects) rose 21 percent, landing it third on the list.

“Companies from all over the world appreciate Germany’s market size, secure legal framework, highly qualified workforce, infrastructure and R&D environment,” says Hermann. “That’s why a host of big American companies have expanded here. For British companies, it is also particularly important to have a foothold in the European Union after Brexit.” Major areas for FDI to Germany were semiconductors, clean energy, digitalization, logistics and the service sector.