Business leaders in France
5 April 2019

France is attracting increasing numbers of foreign investors

France has cemented its appeal in 2018, with foreign investments and foreign business locations in the country both up.
 
Foreign investments in France are thriving. France is a well-known popular destination for tourists, and it is also proving to be so for investors who are choosing to set up here.

Last year, new locations jumped by 14%, and with 1,323 foreign investment projects, that's a new record. Such an increase is a sign of France's growing appeal.

France is the 2nd most attractive country in Europe (for 35% of foreign decision-makers asked) after Germany (41%) and ahead of the UK (34%). 8 out of 10 foreign decision-makers praise the quality of the workforce, more upmarket products, digitisation of industrial processes and quality of French-style management.

European investments continue to lead the way (61%). In trend terms, the UK is the country that has ramped up its investments the most in 2018 (+33%), across the consultancy, engineering, software, IT services and financial services sectors.

"This shows that the policies the Government has rolled out [...] to encourage businesses established in the UK to come and locate their production in France, given the uncertainties over Brexit [...], are working", Prime Minister Édouard Philippe said, on the sidelines of a visit to "State startups" set up in the Grande Arche building of Paris' business district, La Défense.

What are the factors that make France so attractive?

What do the leaders of international businesses located in France appreciate? The size of the internal market (89%), the communications infrastructure (87%), the logistical resource and transport infrastructure (87%), the industrial fabric (87%) and the business environment (86%). Innovation (77%) and R&D (85%) also feature among the top assets most cited by foreign business leaders.

Regarding R&D, France's appeal lies in its network of clusters (groups of labs) the proximity of the markets and other corporate activities, the scope for working together with university research teams, the quality of R&D staff and access to funding. European businesses account for 22% of corporate R&D expenditure in France (National Institute of Statistics and Economic Studies/Insee). US businesses also have a strong presence with over a quarter of decisions in the sector and 21% of associated employment. Such momentum can partly be explained by the effectiveness of the French ecosystem.

A platform for exports

Thanks to its geographic location, with its maritime access points and transport infrastructure, France is ideally situated at a strategic crossroads for operations bound for other continents.

For businesses located in France, our country is a beacon for exports, especially to Africa (70% of businesses) and the other European nations (81% of businesses). 31% of exports are driven by European businesses located in France.

The business climate is in excellent shape. France is perceived to be an economically stable (90%, +5 points), business-friendly (80%, +4 points) country keen to attract foreign investors (89%, +6 points).

France has set up initiatives for promoting its economic appeal which more than 9 out of 10 foreign decision-makers approve of: French Tech to promote French expertise abroad, “Welcome to France” scheme (78%), support-for-innovation schemes (78%) and the skills and talents permit (76%) are the best known and most recognised measures.

What about employment?

+ 8% jobs have been created on average per year over the past five years. At the end of 2016, 28,600 subsidiaries of foreign corporations located in France employed 1.8 million people, which amounts to 11% of France's employed labour force. In 2018, the 1,323 investment decisions recorded enabled 30,302 jobs to be created or maintained.

In 2018, foreign businesses continued to invest in production, with 320 projects which created or maintained 11,295 jobs. As the leading contributor to employment, production accounts for 37% of total employment and a quarter of all investments.