French Flag

France is the leading destination for direct foreign investments in Europe

14/10/2022

French Flag — France, number 1 in Europe for foreign investments.

With 1,222 industrial sites set up or extended by foreign investors in France, 2021 saw France increase its lead over its historical rivals, the United Kingdom and Germany. France has thus maintained its first place in Europe for the third consecutive year, according to the France attractiveness barometer published by the audit firm EY.

Responsible for 59% of international investment projects in 2021, Business France has played a significant role in improving the attractiveness of France, a country in which 20% of projects in Europe are now located.

The increase mainly benefits La French Fab

The industrial sectors that have suffered from the health crisis, such as the automotive, aeronautical, chemical, plastics and construction industries, are returning to pre-pandemic levels. With the reconfiguration of supply chains and the explosion of e-commerce, industrial and logistics projects have witnessed the largest increases, +18% and +37% respectively compared with 2019.

This dynamic benefits all types of territories in France. In 2021, nearly one out of every two industrial projects was carried out in towns with a population of less than 50,000.

A long-term trend

As a demonstration of the effectiveness of the France 2030 recovery plan, the movement to relocate in France is now well-established and is expected to continue in 2022. According to a survey of 203 executives conducted in March and April 2022, 56% of executives want to repatriate all or part of their industrial activity to France within the next three years.

The only downside is the number of jobs created per project (38), which is lower than the number of jobs created in the United Kingdom or Germany, but higher than in 2020.

Key points for the executives surveyed for the trend to be maintained – France must raise its investments in R&D and higher education, and also extend its efforts to improve tax competitiveness and increase the research tax credit.

They also advocate technical training for international employees and a good financial balance between incentives and regulations in respect of ecological transition.

If all these ingredients are present, La French Fab will be able to rely on long-term foreign investment keen to participate in France’s reindustrialization!