EY: Foreign investment projects in Germany hit lowest level since 2009

Foreign companies announced fewer investment projects in Germany for the eighth consecutive year in 2025, underlining concerns about the country's attractiveness as a business location, according to a study by consulting firm EY.

The number of announced projects fell 10% from the previous year to 548, the lowest level since 2009, EY said.

The firm has tracked the data since 2006 and defines investment projects as those creating new sites and jobs. It did not disclose investment volumes.

Germany ranked third in Europe behind France and the United Kingdom. France attracted 852 foreign investment projects, while the UK recorded 730. Both countries, however, posted steeper percentage declines than Germany.

Across Europe, foreign investors announced 5,026 new or expanded projects last year, down 7% from a year earlier, according to EY. The figures include investments from countries such as the United States and China as well as projects by European companies abroad.

EY Germany head Henrik Ahlers said Germany was losing ground to competing European locations, which had pushed ahead with reforms including the digitalization of public administration and tax simplification.

He pointed to high taxes, elevated labour costs, expensive energy and bureaucracy as key obstacles weighing on investment in Germany. 

Ahlers added that Germany's reputation for being unable to implement reforms had increasingly spread internationally and that little remained of its image as a strong high-quality business location and economic safe haven, making urgent countermeasures necessary.