EY: Greece’s Attractiveness as FDI Destination Continues Upward Trend

Photo source: Ernst & Young (EY)

Despite a retreat in Foreign Direct Investment (FDI) across Europe, Greece remains attractive to investors, according to the sixth Ernst & Young (EY) Attractiveness Survey released about the country.

Presented on Wednesday at the 7th Invest GR Forum in Athens, the EY survey for 2024 highlights Greece’s continued progress in terms of the number of investment projects it attracts, as well as the investment community’s perceptions of the country’s attractiveness as an investment destination.

“The sixth edition of our survey confirms the progress made in recent years in the investment sector,” EY Greece CEO Giorgos Papadimitriou said.

“The number of Foreign Direct Investment (FDI) projects is steadily increasing, their qualitative composition is improving, the intention to further invest is strengthening, and critical indicators are moving in the right direction,” Papadimitriou added.

The EY Attractiveness Survey Greece 2024 saw the participation of 250 foreign company executives.

According to the 6th EY Attractiveness Survey, Greece shows continued improvement in Foreign Direct Investment (FDI) for the second consecutive year, exhibiting the following features:

– Half of the respondents (51 percent) indicated that their company plans to establish or extend their business in Greece in the coming year. This is the highest percentage ever recorded, compared to 30 percent when the survey was first introduced in 2019.

– Among very large companies, with revenues over 1.5 billion euros, 65 percent of respondents confirmed their intention to invest in Greece, significantly higher than the average. Additionally, 70 percent of companies already active in Greece stated they will proceed with new investments.

– Two out of three participants in the survey (69 percent) anticipate that Greece’s attractiveness as an investment destination will improve over the next three years.

Greece’s attractiveness in comparison with other countries. Source: Ernst & Young (EY)

– 62 percent of respondents, up from 60 percent the previous year and 47 percent in 2019, stated that their perception of Greece as a country where their company could establish or expand its activities has improved.

– According to the EY European Investment Monitor (EIM), a database tracking greenfield project investments, Greece attracted 50 Foreign Direct Investments in 2023, up from 47 in 2022, ranking 19th among 45 countries included in the survey.

Sixty-two percent of those asked – up from 47 percent in 2019 – said that their view of Greece as a country where their company could establish or extend its activities has improved. Source: Ernst & Young (EY)

– This year’s survey confirms the trend of Greece being chosen for higher-quality foreign investments, focusing on sectors with high know-how intensity and added value, which are critical for transforming the country’s production base. Key sectors include software and information technology (IT) at 24 percent of total FDI, professional services and business-to-business (B2B) services at 16 percent, and transportation and logistics, also at 16 percent of total FDI.

Challenges

However, the survey also highlights that in a highly competitive environment, Greece needs to accelerate its efforts to become a leading destination for foreign investments.

“We must not forget that in the battle to attract investment, Greece starts from a lower starting point and must compete with strong and established European powers, as well as with several regional economies that also prioritize strengthening FDI,” EY Greece CEO Georgios Papadimitriou said.

Among other things, survey respondents highlighted several risks to Greece’s attractiveness as a direct investment destination over the next three years. The primary concern, cited by 44 percent of respondents, was high interest rates and a limited financing environment. Additionally, 34 percent expressed concerns about the size of Greece’s national debt and its impact on taxation, while 32 percent mentioned fears of inflation.

EY’s Proposals

Based on the research findings and its experience from daily interactions with the investment community, Papadimitriou said EY Greece has submitted its proposals for further improving the country’s attractiveness. These proposals focus on nine key areas:

– Enhancing human resources skills.
– Utilizing and developing artificial intelligence.
– Strengthening the research and development sector.
– Promoting sustainable development by leveraging the country’s comparative advantages.
– Improving the attractiveness of the tax system.
– Accelerating the pace of justice.
– Enhancing infrastructure to capitalize on reshoring opportunities.
vFostering the growth of small and medium enterprises (SMEs) and emphasizing the role of medium and large enterprises.
– Transforming the domestic industry and attracting industrial investment.

“We must intensify our efforts by focusing on the critical issues that influence investment decisions today. We believe that the proposals submitted by EY can contribute significantly in this direction,” Papadimitriou said.

Minister: Aim to make Greece even more attractive to FDIs

Takis Theodorikakos, Greek Minister of Development speaking at the 7^th Invest GR Forum.

Participating as a central speaker at the 7th Invest GR Forum, Greek Minister of Development Takis Theodorikakos noted that the results of the EY Attractiveness Survey Greece 2024 are “encouraging”.

According to Theodorikakos, the results of the EY survey for 2024 confirm that Greece is on an upward path due to the improvements in the business environment achieved over the last five years under the New Democracy Party’s government.

“The goal, of course, is to make Greece even more attractive to foreign investments,” the minister said.

The EY Attractiveness Survey Greece 2024 was based on data collected from March 8 to April 4 this year by FT Longitude.