Massive decline in foreign investment in Switzerland expected

The Alpine nation attracted 73 new projects last year, registering an increase of 20%. Martin Ruetschi

An increase in foreign direct investment in 2019 is likely to be followed by a drop of up to 50% in 2020 due to the impact of Covid-19. 

In a European comparison, Switzerland has risen four places and is ranked 17th in terms of investment projects by foreign companies, according to the Ernst & Young (EY) study published on Monday. The Alpine nation attracted 73 new projects last year, registering an increase of 20%. France took the lead followed by the UK and Germany, with Europe attracting a total of 6,412 projects by foreign companies in 2019. 

Switzerland was also busy returning the favour. In 2019, Swiss companies announced 258 foreign investment projects – which is 12% fewer than in 2018. Most of these investments were made in France, Germany, Spain and the UK.  

Ernst & Young predict a rather grim outlook for 2020 with inflows of foreign direct investment expected to fall between 30% and 50% in Europe depending on the country and sector.  

“For the countries of Europe, this means that competition between them for foreign investment will continue to increase. In order to be successful, they must be prepared to the challenges that are currently evolving due to the coronavirus pandemic – including the redesign of supply chains, the introduction of innovative technologies and the development of new ways of processing customers,” said Fabian Denneborg, Partner and Head of Mergers & Acquisitions at EY in Switzerland.