A new investor survey places the US as the number one destination for foreign direct investment (FDI). The Kearny FDI Confidence Index was conducted in January 2025, before US President Donald Trump announced a wave of ‘reciprocal’ tariffs that are threatening to upend the global economic order.
Kearny, a US-based global management consultancy, conducts the survey annually, ranking the markets that are most likely to attract the largest investments in the next three years, which in this case would be until 2028.
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Second and third place were held by Canada and the UK, followed by Japan, Germany and China. According to Kearny, European destinations like the UK and Germany are made attractive by perceptions of stability and technological innovation. Japan has attracted interest for its strong wage growth and tech credentials. Out of the top 25 FDI destinations, 19 are in developed markets.
Last year eight emerging markets made it onto the list, while this year that number dropped by two as Poland and Argentina fell out of the ranking. China was sixth on the list, dropping three places from the year before. Also featured were the United Arab Emirates, Saudi Arabia, Brazil, India and Mexico. The Americas has the most countries in the emerging markets ranking.
The two most important markers of investment attractiveness were the efficiency of legal and regulatory processes and domestic economic performance, suggesting investors are looking for stability amid global uncertainty. Technological and innovation capabilities emerged as the third most important factor.
When asked “What developments […] do you think are more likely to occur in the next year?”, the most common answer among investors was a rise in commodity prices (38% of respondents). Then came an increase in geopolitical tensions (35%) and a more restrictive business regulatory environment in a developed market (32%).
While most investors have a favourable view of the EU, this changes when it comes to European investors, which tend to have a more negative view of the bloc’s standing compared with the Americas and Asia-Pacific.
It is worth noting that, while the survey was conducted in January, investor confidence has now been strongly rattled by the avalanche of US tariffs that are affecting every single country in the world. The tariffs have hit South East Asian production hubs, beneficiaries of the years-long reshoring trend, particularly hard.
Manufacturing hubs such as Vietnam, Cambodia and Thailand face 46%, 49% and 24% import tariffs, respectively. The US has gotten into a tit-for-tat tariff exchange with China. At the time of writing, US tariffs on Chinese goods are at 104% after China refused to retract retaliatory tariffs when Trump raised global stakes on 2 April. In response, China now says they will raise tariffs on US goods to 84%.
