For multinationals and investment agencies alike, the global minimum tax rules have moved from theory into operational reality. Early 2026 adds a major new layer: the OECD’s “Side-by-Side Package” — a bundle of administrative guidance and mechanisms designed to make Pillar Two compliance more workable across different systems.

The key milestone is dated and explicit: the Side-by-Side package was approved and declassified on 5 January 2026. Professional briefings describe it as a significant update that introduces new safe harbours, extends transitional approaches, and implements the “Side-by-Side” concept agreed by major economies.

For FDI stakeholders, the message is not “tax is rising everywhere”. It is more nuanced: the rules are settling, guidance is expanding, and jurisdictions that can translate compliance complexity into predictability may gain an edge.

Why “safe harbours” matter to investment decisions
Tax incentives have long been part of FDI strategy, but in a Pillar Two world, incentives that reduce effective tax rates may be offset by top-up taxes elsewhere. That changes the structure of competition.

Safe harbours and administrative guidance matter because they can reduce the uncertainty premium. When CFOs and boards evaluate a location, they do not only look at the headline rate. They look at compliance burden, audit risk, reporting complexity, and the probability of future disputes.

By expanding guidance and simplified approaches (as described in the January 2026 package summaries), the OECD process is effectively trying to make Pillar Two administrable at scale. That is critical for investment planning: the more predictable the rules, the more confidently firms can allocate capital.

The new competitive frontier: predictability + substance
For jurisdictions that market themselves as FDI hubs or international finance centres, Pillar Two shifts the pitch. The winning story becomes less about “lowest tax” and more about:

• Stability of the regime (clear legislation, guidance, dispute pathways)
• Ease of compliance (local expertise, reporting infrastructure, responsiveness)
• Substance and ecosystem (talent, services, real activity)
• Policy credibility (alignment with international standards, low reputational risk)

This is where the Side-by-Side package becomes strategically relevant. It signals that Pillar Two is not a one-off announcement; it is a living framework being actively refined. Jurisdictions that stay aligned — and help investors navigate the detail — can turn compliance into confidence.

What investment agencies should do now
If you’re promoting a location in 2026, you need to be able to answer three practical investor questions:

1. How do the rules apply to my group structure?
   Investors want clarity on how top-up tax interacts with local incentives, holding structures, and cross-border flows.
2. What’s the compliance workload in practice?
   Even if the economic case is strong, complexity can kill projects. Guidance that reduces friction becomes a selling point.
3. How stable is the policy outlook?
   Investors favour jurisdictions that are credible, consistent, and transparent, particularly when global rules are evolving.

The best investment agencies will start treating Pillar Two literacy as part of investor servicing, alongside permitting, talent access, and market entry support. This can include curated guidance notes, partner networks of qualified advisors, and clear explanations of local implementation timelines.

The broader macro backdrop: steady growth, shifting assumptions
This tax story is landing against a macro environment that is relatively stable on the surface but still shaped by uncertainty. The IMF’s January 2026 outlook projects global growth at 3.3% in 2026, with inflation expected to continue falling globally, albeit at different speeds across economies.

For FDI, that combination — steady growth and cooling inflation — can support investment. But “divergent forces” remain, including geopolitical tensions and shifts in technology expectations. In that world, the jurisdictions that win are often those that reduce uncertainty and execution risk for investors.

Bottom line
The Side-by-Side package is a signal that Pillar Two is maturing into an operational system. The competitive game for FDI jurisdictions is evolving accordingly: from rate competition to credibility, predictability, and investor enablement.

If you can help investors answer “how will this work in practice?” — quickly, clearly, and with confidence, you’re not just keeping up with global tax change. You’re building a new kind of advantage.