European countries are listed by the European Chamber according to Foreign Direct Investment (FDI) inflows per capita, based on the 2013 data published by the World Bank. The rate considers the capital used to acquire an ownership of at least 10%, in an enterprise of a country other than the one where the investors reside in.
According to “Doing Business”, there is a strong correlation between FDI inflow and the degree of ease of doing business in a specific country. EuCham analyzes FDI per capita to highlight its relevance to business success.
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EuCham Charts
March 2015
Foreign Direct Investment per capita in Europe
| 1 | Luxembourg | 55,367 |
| 2 | Ireland | 10,872 |
| 3 | Netherlands | 1,911 |
| 4 | Austria | 1,634 |
| 5 | Iceland | 1,451 |
| … | ||
| 44 | Malta | -4,414 |
USD FDI per capita in 2013, World Bank, 2014
44 European countries were considered
- Foreign Direct Investment (FDI) is a controlling ownership in an enterprise by a company based abroad
- There is a strong correlation between FDI inflow per capita and the degree of ease in doing business with a specific country
- Luxembourg attracts most of the foreign investments per capita, with USD 55,367 per resident
- Following in the ranking are Ireland, Netherlands, Austria and Iceland
- Malta positions at the bottom, facing a loss of USD 4,414 per resident in terms of foreign investments
Source: eucham.eu/research
Detailed Information
EuCham – European Chamber lists the European countries according to Foreign Direct Investment (FDI) inflows per capita based on the 2013 data published by the World Bank. The rate considers the capital used to acquire an ownership of at least 10%, in an enterprise of a country other than the one where the investors reside in. According to “Doing Business”, there is a strong correlation between FDI inflow and the degree of ease of doing business in a specific country. EuCham analyzes FDI per capita to highlight its relevance to business success.
Luxembourg is ranked top with USD 55,366.8 FDI inflow per capita, which are mainly concentrated in the banking and insurance sectors. The countries following in the top 5 are Ireland, Netherlands, Austria and Iceland. Surprisingly, Malta, which could count on an English-proficient labour force and privileged geographical position, facilitating trade in the Mediterranean area, occupies the bottom of the chart with a negative USD 4,414.4 per capita. This is due to the decline in tourism resulted from the 2008 worldwide crisis and the Libyan war.
In conclusion, EuCham focused this month Chart on FDI inflow figures to highlight its relevance to a country’s economic growth and its impact on society welfare. Benefits for the local population include increased employment opportunities and improved infrastructures.
Methodology
A positive value of FDI per capita represents an inflow of foreign investment in a country’s economy distributed among its residents, whereas negative values indicate withdrawn investments.
Table 1 has been created based on the values of the “Total Population” and “Foreign Direct Investment, net inflows” 2013 databases of World Bank (2014). For San Marino, Monaco and Liechtenstein data were not available.
Business focus:Foreign Investment in Europe
Migration has overflowed the political and economic debate over the past decades as the globalization of the job markets expands. However, its benefits, costs, issues and advantages are generally overlooked from a business perspective.
Undoubtedly, immigration has proven to be highly beneficial for businesses and for SMEs. Yet, a lack of governmental intervention on a global and national scale cause the frequent occurrence of some issues, of which illegal immigration is the most severe. It puts businesses at risk and make ethical enterprises be outcompeted by unethical organization, which can benefit by hiring illegal immigrants at lower costs thus unfairly providing cheaper services. Other issues include the difficulty to assimilate immigrants into the work culture and language barriers.
When considering a global expansion, countries with high immigration may be preferred due to their favourable conditions such as the provision of language and cultural knowledge that current staff might not possess. Moreover, the diversification of the workforce might foster innovation and protect from anti-discrimination laws.
Furthermore, skilled immigrants represent an under-tapped talent pool of highly flexible, adaptable and loyal workers, ideal for expanding businesses. Unskilled immigration can also be beneficial for the national economy and enterprises, by providing a steady supply of candidates to fill job openings often neglected by native people.
EuCham – European Chamber listed the European countries according to the migration rates, which indicates the difference between immigrants and emigrants of a country in a given year per 1,000 persons, based on data from Central Intelligence Agency (2014). As seen here by these metrics, SMEs could take advantage of the high migration inflows occurring in Cyprus, Luxembourg, Norway which by providing advantageous tax and bureaucratic laws attracting with immigration a stream of inflow capital which can ultimately stimulate the economy.
Table 1: FDI Net Inflows per capita USD
| Rank | Country | FDI in USD | Population | FDI per capita |
| 1 | Luxembourg | 30,075,373,593 | 543,202 | 55366.8 |
| 2 | Ireland | 49,960,134,752 | 4,595,281 | 10872.1 |
| 3 | Netherlands | 32,109,654,413 | 16,804,224 | 1910.8 |
| 4 | Austria | 13,843,770,472 | 8,473,786 | 1633.7 |
| 5 | Iceland | 468,688,707 | 323,002 | 1451.0 |
| 6 | Spain | 44,917,006,387 | 46,647,421 | 962.9 |
| 7 | Portugal | 7,881,591,922 | 10,459,806 | 753.5 |
| 8 | Estonia | 964,588,953 | 1,324,612 | 728.2 |
| 9 | Montenegro | 446,490,330 | 621,383 | 718.5 |
| 10 | Germany | 51,266,993,711 | 80,621,788 | 635.9 |
| 11 | Cyprus | 607,038,885 | 1,141,166 | 531.9 |
| 12 | Norway | 2,627,258,488 | 5,084,190 | 516.8 |
| 13 | Russia | 70,653,718,709 | 143,499,861 | 492.4 |
| 14 | Czech Republic | 5,006,911,507 | 10,521,468 | 475.9 |
| 15 | Albania | 1,253,783,309 | 2,773,620 | 452.0 |
| 16 | Latvia | 880,800,000 | 2,013,385 | 437.5 |
| 17 | Slovakia | 2,148,266,702 | 5,414,095 | 396.8 |
| 18 | Denmark | 1,597,210,042 | 5,613,706 | 284.5 |
| 19 | Azerbaijan | 2,619,437,000 | 9,416,598 | 278.2 |
| 20 | Serbia | 1,974,338,182 | 7,613,976 | 275.6 |
| 21 | Greece | 2,945,417,938 | 11,032,328 | 267.0 |
| 22 | Bulgaria | 1,887,670,064 | 7,265,115 | 259.8 |
| 23 | Lithuania | 712,435,949 | 2,956,121 | 241.0 |
| 24 | Belarus | 2,246,100,000 | 9,466,900 | 237.3 |
| 25 | Italy | 13,126,395,561 | 59,831,093 | 219.4 |
| 26 | Georgia | 949,335,750 | 4,476,900 | 212.1 |
| 27 | Romania | 4,108,000,000 | 19,963,581 | 205.8 |
| 28 | Macedonia | 376,454,351 | 2,107,158 | 178.7 |
| 29 | Turkey | 12,918,000,000 | 74,932,641 | 172.4 |
| 30 | Croatia | 588,376,068 | 4,252,700 | 138.4 |
| 31 | Armenia | 370,196,773 | 2,976,566 | 124.4 |
| 32 | Ukraine | 4,509,000,000 | 45,489,600 | 99.1 |
| 33 | France | 6,480,400,817 | 66,028,467 | 98.1 |
| 34 | Bosnia & Herzegovina | 315,018,539 | 3,829,307 | 82.3 |
| 35 | United Kingdom | 4,831,445,402 | 64,097,085 | 75.4 |
| 36 | Moldova | 249,040,000 | 3,559,000 | 70.0 |
| 37 | Poland | -4,586,000,000 | 38,530,725 | -119.0 |
| 38 | Slovenia | -418,664,939 | 2,060,484 | -203.2 |
| 39 | Belgium | -3,268,505,983 | 11,195,138 | -292.0 |
| 40 | Hungary | -4,301,988,209 | 9,592,247 | -434.7 |
| 41 | Sweden | -5,119,205,196 | 9,592,552 | -533.7 |
| 42 | Finland | -5,296,740,409 | 5,439,407 | -973.8 |
| 43 | Switzerland | -8,179,472,592 | 8,081,482 | -1012.1 |
| 44 | Malta | -1,868,526,810 | 423,282 | -4414.4 |
Sources: World Bank (2014)
EuCham Research Department – Compiled by Ms Mitsuko Takagi and Mr Luca Nazzicone 2015-02-27
