Despite the ongoing war, Ukraine remains on German investors’ radar, ranking second among the CEE countries most frequently mentioned in companies’ investment plans. This is according to the German-Central and Eastern European Business Outlook 2026 (German-CEE Business Outlook), which KPMG in Germany has compiled together with the Committee on Eastern European Economic Relations. The publication is based on a survey of 115 companies, which was conducted between 24 November 2025 and 13 January 2026.
Investment activity in CEE remains broadly diversified across countries
- Poland, Ukraine, Romania, Czechia and Hungary emerge once again as the leading investment destinations for German companies in CEE.
- Poland, by far the largest economy in the region, stands out strongly. More than half of the companies surveyed (56%) that plan to invest in the CEE region intend to expand there – an increase of 11 percentage points compared to 2025.
- For a long time, Poland was primarily seen as an extended workbench for Western companies, as a location for low-cost production. The country is already the fourth most important export market for German companies, overtaking China.
- Despite the ongoing war, 43% of companies planning to invest in CEE are considering expansion into Ukraine, 8 percentage points more than in 2025.
- Serbia, Hungary and Romania recorded declining investment compared to last year.
Growing share of companies prepared to invest in Ukraine despite the war
- Investment appetite in the short term in Ukraine has increased noticeably: 19% plan to invest even during the war (+11 pp compared to 2025). The overall share of companies considering investments in Ukraine has increased slightly to 48%.
- The share of firms already present in Ukraine holds at 19%.
- However, war-related caution remains: 15% have ruled out investment in Ukraine due to the war, while another 16% are not investing in Ukraine irrespective of the war.
Political and security risks, corruption and bureaucracy remain core challenges in CEE
- Security concerns and political risks remain the most frequently cited challenges (60%), primarily due to the ongoing war in Ukraine and regional geopolitical tensions. However, compared to the previous survey this perception seems to be declining slightly (-7 pp).
- Corruption is seen as a greater challenge this year (47%, +9 percentage points compared to the previous survey). This increase is also reflected in the Corruption Perception Index on page 33, which shows that even the largest economies in the CEE region continue to have comparatively poor scores.
- Bureaucratic hurdles continue to affect operational efficiency in several markets for one third of companies (35%).
- While low labour costs still represent a decisive competitive advantage of the CEE region for many of the companies (see page 16), 33% of the companies surveyed also see increasingly rising wages as one of the most negative factors.
- Competitive market pressure (26%) rises as a challenge (+10 pp).
Investment decisions in CEE somewhat impacted by Russia’s war against Ukraine
- 45% report that the Russian war against Ukraine has no impact on their investment decisions. Those companies differentiate between Ukraine and the remainder of the CEE region.
- 15% report having postponed or cancelled investments due to the war, while 13% have shifted activities within the region.
- A smaller group either increased (9%) or reduced (9%) their activities or moved investments out of the region altogether (5%) due to the war.
