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23 07 2015
Berlin: Attractive Destination for Direct Foreign Investments

According to a recent survey done by the EY (Ernst & Young) auditing firm, Berlin was one of the preferred destinations for direct foreign investments last year, and its popularity surged considerably. It registered 80 direct foreign investments, which marks an increase by 22 percent since 2013. The surge placed Berlin – as a state in its own right – among the first four German states, behind Baden-Württemberg, Hesse and North Rhine-Westphalia. Indeed, Berlin claimed a market share of ten percent out of all direct investments undertaken by foreign investors in Germany in 2014. When comparing German cities rather than German states, the popularity becomes even more obvious: Here, Berlin actually takes the lead, ahead of Frankfurt am Main, Düsseldorf and Munich. It also cuts a great figure when compared to cities elsewhere in Europe. In terms of direct foreign investments, it ranked third behind London and Paris.

These findings are based on the “European Investment Monitor” of EY, an analysis of foreign direct-investment projects that create permanently established businesses or jobs. The survey also included interviews with 200 executives of internationally active companies on the subject of Germany as investment location.

Berlin is Capitalising on its Popularity

According to the EY survey, Berlin's image as a growing metro region has improved among the majority of foreign investors. When asked which of the German states had the highest appeal for setting up a business, 19 percent of the 200 respondents named Berlin, making it the runner up just behind Bavaria. Among those interviewees without a footprint in Germany yet, the responses were more differentiated: For this group, Berlin is actually the most attractive German state for starting a business.

Direct Foreign Investments Creating Jobs in Berlin

Another beneficiary of the growing number of direct investments is the city's labour market. The investments alone helped to create more than 1,500 new jobs in Berlin last year. It meant a year-on-year increase by 395 percent for the German capital. In this respect, the city state of Berlin has moved up into third place, topped only by the large and traditionally outperforming states of North Rhine-Westphalia and Baden-Württemberg.