n the following pages we present the Top Countries and Top Countries Per Capita in our annual Global Best to Invest rankings, topped by the United States, Canada and Germany in the first category and the United States, Canada and Ireland by the per-capita yardstick. The rankings are based on an index derived from the following:
The breakout Top 5 Countries rankings by world region are determined by a blend of cumulative and per capita calculations into one integrated ranking based on the criteria above.
These pages also include the Global Best to Invest Top Global Metros (minus metro regions in Canada and the U.S because we separately rank U.S. and Canadian metros elsewhere on our editorial calendar). London, Dublin and Singapore top our rankings, followed by Barcelona and Shanghai. These rankings are based on the following:
Finally, we present regional breakouts of metros. Because of the paucity of metro-level data sets, these regional metro rankings are based purely on the Conway Data Projects Database data.
Each citation includes the name and URL of the relevant economic development organization. In some cases, a country’s investment promotion agency is named as a proxy.
Time to Triangulate
When it comes to global rankings, corroboration provides comfort — both to global corporate investors and to global publication publishers. In this case, two recent sets of rankings from the Economist Intelligence Unit and from Kearney offer affirmation in some cases and compelling points of comparison in others.
The EIU’s annual business environment rankings are based on an analytical framework of 91 indicators.
“Our ranking for the second quarter of 2023 shows that North America and western Europe continue to be the best places in the world to do business,” says the report. “Asia ranks third, ahead of eastern Europe, while Latin America marginallyoutperforms the Middle East and Africa (MEA).”
The three countries with the best business environment over the next five years? Singapore, Canada and Denmark. But others in the EIU Top 10 also appear in ours. It’s also worth noting the biggest movers in the EIU rankings: “The biggest improvements over the past year are in the business environments of Vietnam, Thailand, Belgium, Sweden, India and Costa Rica,” the report finds. “The biggest deteriorations are in China, Bahrain, Chile and Slovakia.”
Among conclusions to be drawn from the EIU report’s observations:
While Eastern Europe has suffered from the fallout of the war in Ukraine, 10 of the Top 20 countries in the ranking are in Western Europe, which “reflects the region’s political stability, large and competitive domestic markets, and openness to world trade.” Belgium is the biggest improver in the region, while Sweden (highly ranked in our own Top 10) also has markedly improved, not just because of its stability, the EIU says, but in part because of its digitally advanced economy.
China is “the biggest loser” in Asia, while Singapore — a perennial top performer in all sorts of rankings — gets to maintain its superiority complex. Vietnam (up 12 spots), Thailand (up 10 spots) and India (up six) are the biggest climbers in Asia. “Vietnam and Thailand, which have favorable policies for foreign investors, are benefiting from firms pursuing a China+1 policy of having supply chains in both China and another Asian market,” the EIU says, reflecting guidance Site Selection readers have read in past issues from Tractus Asia and others. “This reflects China’s zero-covid policies, which have constrained business operations, and also allows firms to mitigate geopolitical risk associated with the US-China relationship.”
While Latin America has issues with political effectiveness, the report says, Costa Rica stands out with its six-slot upward move, “driven by higher infrastructure and technological readiness scores,” says the EIU, among other factors. (For more on Costa Rica and its surging FDI, see p. 138 of this issue.)
Israel and the Gulf states top the Middle East and Africa region, says the EIU, with prospects for Qatar, Saudi Arabia and the UAE improving over the next five years.
When Kearney Speaks
SelectUSA, which was to hold its annual Investment Summit near the nation’s capital the first week of May, was crowing about its No. 1 ranking in Kearney’s Global Business Policy Council’s Foreign Direct Investment (FDI) Confidence Index almost before the ink was dry on the publication, which was released on March 30.
Indeed, the U.S. was No. 1 for the 11th straight year. The rest of the Top 10 offer some parallels and some contrasts with our Global Best to Invest findings.
“Canada reclaims the second position after falling to third in 2022, and Japan jumps to third from last year’s fourth-place ranking, Kearney reported. “Germany drops two spots to fourth, likely reflecting the economic and energy challenges it has faced due to the geopolitical crisis in Eastern Europe. The United Kingdom maintains the fifth position, with France following closely behind. China jumps from 10th to 7th, perhaps attributable to signs of recovering economic activity following the reversal of zero-COVID policies in late 2022. Overall, this year’s survey once again demonstrated investor preference for developed markets, which accounted for 19 out of 25 of the countries on the Index.”
Given the level of doom and gloom around a potential recession, optimism persists in the Kearney survey of investors, with 82% stating they are planning to increase their FDI in the next three years — “up marginally from 76% last year,” Kearney found. “Further, 87% cited FDI as more important for their corporate profitability and competitiveness in the next three years, up slightly from 83% in 2022.”
Among other Kearney findings (find the full report at www.kearney.com):
In a new ranking of emerging markets, China, India, the United Arab Emirates, Qatar, Thailand, and Saudi Arabia hold the top six positions. “They are also the only emerging markets included in the world rankings,” Kearney says. “Beyond these top six, Latin America makes a strong showing, with Brazil, Mexico, and Argentina taking the 7th, 8th, and 9th positions, respectively. Southeast Asia also performs strongly, with Malaysia, Indonesia, the Philippines, and Vietnam taking the 10th through 13th positions, respectively.”
“For the second consecutive year, the top three factors that investors prioritize when choosing where to make their FDI are transparency of government regulations, technological and innovation capabilities, and tax rates and ease of tax payments. For European and Americas-based investors, the top-ranked rationale when choosing where to make foreign direct investments is transparency of government regulations and lack of corruption. This likely reflects the European Union’s focus on regulatory compliance, whether it be in terms of data transfer through GDPR legislation or business best practices. Asian investors, on the other hand, rank tax rates and ease of payment most highly when choosing where to make their FDI.”
“A distinct majority of respondents (66%) anticipate an increase in globalization in the next three years; by contrast, only 23% expect a decrease,” the report stated. “Across several measures, respondents from the Asia Pacific (APAC) region generally showed the most bullish and favorable views on their companies’ ability to continue to benefit from global linkages. The Americas generally followed closely behind APAC, while Europe showed the most pessimism relative to their counterparts.”
Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.