The Asia-Pacific region has surged to a record-breaking position in global investment rankings, even as geopolitical tensions and industrial policy shifts reshape the world economy, according to Kearney’s latest 2026 Foreign Direct Investment Confidence Index (FDICI).
The annual survey of 507 senior executives—conducted in January 2026—finds that APAC now accounts for 10 of the 25 ranked markets, its strongest showing in more than a decade. The shift comes as companies double down on global expansion despite an increasingly complex and uncertain international landscape.
“Eighty-eight percent of respondents say they plan to increase foreign direct investment over the next three years,” underscoring continued corporate confidence in long-term global opportunities.
The United States and Canada hold steady at first and second place respectively, but Asia’s momentum is unmistakable. Japan climbs to third, China (including Hong Kong) rises to fourth, while Singapore (8th), South Korea (11th), and India (22nd) all advance. Thailand (20th) and Malaysia (21st) also re-enter the top 25 after multi-year absences, signaling a broad regional resurgence.
“The APAC region emerges as a winner as investors recalibrate how they make decisions in a more turbulent operating environment,” said Shigeru Sekinada, Region Chair, Asia Pacific at Kearney.
“The technological capability, economic growth potential, and geopolitical relevance offered by the top-ranking APAC markets make them choice FDI destinations among a business community that is both actively pursuing emerging opportunities and attentive to mounting complexities and risks.”
Singapore delivers one of the sharpest climbs, jumping from 15th to 8th place. Investors point to its innovation ecosystem—powered by R&D incentives, tax support, and strategic partnerships—as a key driver of appeal.
Technological innovation is cited by 34 percent of respondents as the strongest reason to invest, followed by economic performance at 30 percent, supported by growth in biomedical manufacturing, electronics, and AI-driven semiconductor and server industries.
The city-state’s rise, alongside gains in markets such as Saudi Arabia, highlights the growing influence of so-called “middle powers”—countries that are not global superpowers but wield increasing strategic and economic influence.
Emerging economies continue to strengthen their position in global capital flows. China remains the top-ranked emerging market for the third consecutive year, while Thailand and Malaysia post some of the most notable gains. Vietnam also rises three places to 16th within the emerging markets index.
Overall sentiment toward emerging markets is improving modestly, as firms expand supply chains and diversify investment beyond traditional hubs.
Technological capability and innovation have overtaken traditional considerations such as regulatory efficiency and domestic economic performance as the leading driver of investment decisions. Artificial intelligence, digital infrastructure, and data ecosystems are increasingly central to corporate strategy.
Investors identify technological innovation as the strongest or joint-strongest reason to invest in 10 of the 25 ranked markets, including Japan, China, Singapore, South Korea, and Taiwan (China).
Despite strong investment intentions, executives remain wary of global instability. Geopolitical tensions are seen as the most likely near-term development by 36 percent of respondents, followed by commodity price increases and political instability in developed economies at 30 percent.
“Geopolitical instability and rising commodity prices have proven to be major factors impacting global business this year, as reflected in the current Middle East conflict. Supply chain resilience, diversification of energy sources and government policies will be crucial for markets to maintain their attractiveness in the eyes of investors in the medium term,” said Sekinada.
Industrial policy is also playing a growing role in shaping investment flows, with 84 percent of investors calling it “extremely or very important” in location decisions.
More than half say it positively affects business performance. In APAC, infrastructure investment and subsidies are especially favored, with 88 percent and 80 percent of regional investors respectively viewing them positively.
