Administration consulting agency Kearney’s ‘2026 International Direct Funding Confidence Index’ displays a world funding surroundings formed by intensifying geopolitical tensions, increasing industrial coverage and accelerating technological competitors.
The survey exhibits that corporations are dedicated to worldwide funding regardless of mounting uncertainty, with 88% of respondents saying they plan to extend FDI over the following three years, which alerts sustained confidence in long-term international alternatives.
The current escalation of battle within the Center East provides a layer of uncertainty to the worldwide funding surroundings, with the potential to disrupt, delay or redirect FDI flows, relying on how dangers evolve, the report says.
“Capital continues to move, however corporations have gotten extra selective about the place they make investments as they weigh technological capabilities, geopolitical dangers and the rising affect of commercial coverage,” says Kearney International Enterprise Coverage Council companion and MD and report co-author Erik Peterson.
“Buyers nonetheless imagine within the worth of FDI, however they’re recalibrating how they make their choices in a extra turbulent working surroundings.”
Executives stay alert to rising international dangers, at the same time as funding intentions are sturdy. Geopolitical tensions rank because the most certainly improvement over the following 12 months, as reported by 36% of respondents, adopted by commodity value will increase and political instability in developed markets at 30%.
Concurrently, industrial coverage is taking part in a central position in shaping funding choices, with 84% of traders saying industrial coverage is extraordinarily or essential in figuring out the place they make investments, and 57% believing it has a constructive influence on their firm’s enterprise efficiency.
Nonetheless, almost 9 in ten traders report no less than average enterprise danger from competing nationwide industrial insurance policies, which underscores the complexity created by overlapping coverage frameworks, the report outlines.
Additional, traders view infrastructure improvement and tax incentives as the simplest industrial coverage instruments, with about 80% saying infrastructure funding is efficient in reaching financial and safety objectives, whereas enthusiasm for tariffs and export controls is considerably decrease.
“Industrial coverage is reshaping the worldwide funding panorama and quick turning into a key consider FDI decision-making,” says Kearney International Enterprise Coverage Council principal and report co-author Terry Toland.
“Buyers are weighing the alternatives created by subsidies and different coverage incentives with the complexity of competing industrial insurance policies throughout markets.”
In the meantime, the report exhibits that technological and innovation capabilities rank as crucial issue influencing the place corporations select to speculate, surpassing conventional concerns equivalent to regulatory effectivity and home financial efficiency.
Buyers cite technological innovation because the strongest or tied strongest cause to spend money on ten of the 25 markets on the Index, underscoring the rising significance of innovation ecosystems in attracting international capital.
As funding in AI, digital infrastructure and data-driven applied sciences accelerates worldwide, markets with sturdy innovation ecosystems are more and more considered as probably the most engaging locations for long-term funding, Kearney notes.
Buyers’ choice for technologically superior economies is evidenced by the US sustaining its place because the world’s most tasty vacation spot for overseas direct funding for the fourteenth consecutive 12 months.
Buyers proceed to quote the nation’s technological management and financial resilience as key causes for investing.
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Nonetheless, regardless of the US sustaining its prime rating, investor sentiment has softened, with web optimism concerning the market’s three-year financial outlook falling by 17 factors in contrast with 2025.
Additional, Canada holds the second place for the fourth 12 months in a row and continues to shut the hole with the US. Buyers level to Canada’s pure useful resource base, steady financial fundamentals and rising expertise capabilities as key strengths.
Equally, Asia exhibits significantly sturdy momentum on this 12 months’s rankings. Japan rises to 3rd place, supported by investor confidence in its innovation ecosystem and focused funding incentives. China climbs to fourth, reflecting the size of its home market and its continued progress in expertise improvement.
Asia claims the most important share of markets on the Index for the primary time in additional than a decade. The shift underscores a rising investor deal with markets that mix technological functionality, financial development potential, and geopolitical relevance.
Moreover, so-called center energy economies are additionally gaining prominence on this 12 months’s outcomes, Kearney notes.
Singapore posts some of the notable enhancements within the rankings, whereas South Korea additionally climbs within the Index, reflecting sturdy investor curiosity in its technological innovation and superior industrial capabilities.
These markets are considered as strategic funding hubs, providing rising roles in international provide chains.
The report exhibits that rising markets stay dynamic and more and more interconnected with international funding flows. China, the United Arab Emirates (UAE) and Saudi Arabia rank as the highest three markets on the Rising Markets Index for the third consecutive 12 months, whereas Thailand and Malaysia posted a number of the largest features within the rankings amid ongoing provide chain diversification.
A number of rising markets, together with China, the UAE, Brazil, Mexico, Thailand, Malaysia and India, additionally seem on the worldwide rankings, which highlights the rising overlap between international and rising funding locations.
Investor sentiment towards rising markets has improved modestly 12 months over 12 months, with traders expressing the strongest optimism concerning the financial outlook for markets such because the UAE and Thailand.
The outcomes counsel that extra corporations are trying past conventional funding hubs as they broaden provide chains and pursue development alternatives throughout a broader set of rising markets, Kearney says.
