4 July 2016

Canada ranks third among the places most conducive to foreign direct investment, according to A.T. Kearney’s 2016 FDI Confidence Index^®.

In comparison to 2015, Canada gained one position, with only the United States and China ranking higher on this list of the top 25 countries.

According to A.T. Kearney, improvements to the Canadian regulatory framework helped increase Canada’s appeal in terms of foreign direct investment.

The survey shows that global corporate leaders prefer to invest in developed markets, mainly North America and Europe, given the degree of uncertainty about many emerging markets.

Eight of the top ten positions are held by developed countries, which also make up 80% of the overall ranking. This contrasts with recent FDI Confidence Index® rankings: in 2013, emerging markets accounted for more than 50% of countries, and up to 70% in 2007 and 2010.

Nearly 75% of the companies surveyed plan a moderate or significant increase in foreign direct investment in the next three years.

The report also highlights that, at 194%, the United States and Canada experienced the strongest growth in inflow of foreign direct investment in 2015.

Decision-making Factors

A.T. Kearney Foreign Direct Investment Confidence Index also released the main factors that inform the decisions related to foreign direct investment made by senior management:

Domestic market size – 15 %
Cost of labour – 15 %
Regulatory transparency and lack of corruption – 15 %
General security environment– 14 %
Technological and innovation capabilities– 13 %
Tax rates and ease of tax paiement– 12 %
Talent and skill level of labour pool – 12 %
Government incentives for investors – 11 %

Sherbrooke remains the Canadian city with the most competitive operating costs among the 34 cities ranked in KPMG’s 2016 Competitive Alternatives study.

Source : A.T. Kearney