BERLIN, May 21 (Xinhua) -- Foreign companies announced fewer investment projects in Germany for the eighth consecutive year in 2025, with activity falling to its lowest level since 2009, a study by consultancy EY showed on Thursday, highlighting concerns about the country's appeal as a business destination.

This photo taken on May 3, 2026 shows the Reichstag building in Berlin, Germany, May 3, 2026. (Photo: Xinhua)

The number of foreign direct investment projects in Germany dropped 10 percent from the previous year to 548, EY said. The consultancy, which has tracked the data since 2006, defines investment projects as those involving the creation of new sites and jobs, but it did not disclose investment volumes.

Germany remained the third-largest destination for foreign investment projects in Europe, behind France and Britain. France attracted 852 projects while Britain recorded 730, although both countries posted steeper percentage declines than Germany, EY said.

Across Europe, foreign investors announced 5,026 new or expanded projects in 2025, down 7 percent from a year earlier. The figures include investments from countries such as the United States and China, as well as cross-border projects by European companies.

Henrik Ahlers, head of EY Germany, said the country was increasingly losing ground to competing European locations that had advanced reforms, including the digitalization of public administration and tax simplification.

EY attributed the drop to high taxes, elevated labor and energy costs, and a lack of reforms to what it described as rigid and bureaucratic administrative procedures.

Germany had largely lost its reputation as a high-quality business location and economic safe haven, highlighting the urgent need for corrective measures, Ahlers added.