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France, top European FDI destination

The French government’s economic reforms are proving successful, as France’s attractiveness rose sharply in 2019

“The 2019 Annual Report: Foreign investment in France” released today reflects the confidence foreign investors have in France as a business location.

France attracted 1,468 new foreign investment decisions in 2019, an increase of 11% compared with 2018 (1,323 decisions). Jobs created or maintained in France by investments from foreign businesses also jumped 30%, creating 39,542 jobs in 2019, compared with 30,302 jobs in 2018. On average, 28 investment decisions were recorded every week in France last year, compared with 25 in 2018.

This investment boom stems from the confidence shown by economic decision-makers. According to the Kantar-Business France survey carried out in January 2020, nearly nine in 10 executives (87%) believe that France is an attractive destination for foreign investment.

The opening of new sites across France increased by 3% to represent the majority (52%) of the investments made in 2019, with 763 decisions, compared with 741 decisions in 2018. The remaining amount concerned expansions and takeover decisions.

“France was the most attractive country in Europe for foreign investors in 2019. Our economic policy is showing results; now we should continue in this direction. These foreign investments are a chance for employment, our economy and our regions. We have all the advantages to emerge stronger from the coronavirus crisis,” said Bruno Le Maire, the Minister for the Economy and Finance.

The expansions illustrate the renewal of trust in France as a business location by foreign businesses already established in France. Expansion projects (610) represent 47% of all jobs associated with foreign investment in France, with an increase of 20% in 2019 to 18,755 jobs, compared with 15,588 jobs in 2018. Nearly half of the site expansions were in production/manufacturing activities, which shows great confidence from foreign manufacturers already established in France for our country.

The French industrial base remained the main beneficiary of foreign investments (new sites and expansions), with 26% of all investments and 380 projects in 2019, compared with 320 projects in 2018 (up 19%). Production/manufacturing activities remain the leading contributors to international investment in terms of jobs, with 13,814 positions (including 10,099 jobs created and 3,715 jobs maintained, up 22% compared with 2018), i.e. 35% of total employment. The main sectors affected were aerospace and railway equipment manufacturers (21%) and the automotive industry (14%).

Investments in production/manufacturing activities accounted for 76% of expansions of existing sites and 13% of new sites.

“Once again this year, the manufacturing sector is in the spotlight, confirming France’s leading position among European countries for industrial investment in the 2019 EY rankings. In this way, international investment is supporting France’s industrial recovery effort, with no fewer than 56% of industrial projects being located in the country’s industrial regions.

“For example, the American firm AGCO, a global leader in the design and manufacture of agricultural machinery, including the famous Massey Ferguson tractors, confirmed it was expanding its production facility in Beauvais (Hauts de France region) with an additional €40 million being invested over 2019-2021 to create a cutting-edge Industry 4.0 site, with 200 new jobs confirmed.

“This investment will largely be given over to additive manufacturing and to the internal production of hydraulic tubes, which are currently produced by external suppliers in Europe and Asia, and will integrate cutting-edge technologies with quality control,” said Christophe Lecourtier, CEO of Business France.

R&D and engineering activities accounted for 22% of international investments, with 157 investment decisions, compared with 129 projects in 2018 (up 22%). Jobs associated with the creation and expansion of R&D centers rose by 35% in 2019, with 3,775 jobs, compared with 2,793 jobs in 2018.

“The continued growth of R&D projects highlights the authorities’ constant commitment to promote innovation and the attractiveness of the French tax incentive system, including the research tax credit. This commitment was strongly reflected in the Kantar-Business France survey, which showed that 84% of foreign investors considered France to be an innovative economy.

“I can illustrate this with two examples: ARM, a British business specializing in the design of semiconductors, which is strengthening its presence at its R&D site located in the Sophia-Antipolis technology park near Nice (Provence-Alpes-Côte d’Azur region), where it has hired an additional 200 employees.

“Secondly, there is IBM, which has created a co-innovation center at Paris-Saclay that will welcome 350 people over the next two years, including around a hundred researchers, to work on artificial intelligence, cybersecurity and quantum computing,” said Pascal Cagni, Chairman of Business France and Ambassador for International Investment.

European investments remain predominant: 64% of foreign job-creating investments in France came from Europe, compared with 61% in 2018 (up 3%).

The main investor countries in 2019 were the United States, with 16% of all international investments in 2019, amounting to 238 projects, compared with 232 in 2018, thereby generating 7,886 jobs, compared with 6,274 in 2018 (up 3%).

They were closely followed by Germany, which accounted for 15.5% of all investments in 2019, with 228 projects, compared with 180 in 2018, generating 4,946 jobs, compared with 3,618 in 2018, and finally the United Kingdom, which stood out for having the most significant change in the top 10 of the best investor countries: up 142%, equal to 12% of all projects in 2019, with 173 projects, compared with 118 in 2018, generating 5,927 jobs, up significantly from the 2,448 in 2018. The United Kingdom had already seen very strong growth in 2018, with a 33% rise in projects.

In addition, 2019 was the year in which Brexit-related decisions became a reality, boosting the Paris financial center, with a 48% increase in decisions in favor of France in this business sector. Thirty-four major financial projects were completed in Ile de France (Paris region) in 2019, with 1,185 jobs created, compared with only 27 small projects and 542 jobs in 2018.

In terms of regional development, the geographic distribution of projects reflects both the attractiveness of large cities but also smaller towns.

Investment projects were distributed fairly between major cities and towns, with 41% of projects carried out in towns of fewer than 20,000 inhabitants and 43% of projects in urban areas of fewer than 200,000 inhabitants.

In terms of projects, Ile de France (Paris region), Auvergne-Rhône-Alpes, Hauts de France, Occitanie and Bourgogne-Franche-Comté were the main regions to benefit from these investments in 2019.

“I acknowledge the commitment of the teams at Business France, working in conjunction with our regional partners as part of Team France Invest, who have supported more than 4,000 projects across France since 2017, particularly in its industrial regions (56% of projects in 2019), thereby creating more than 100,000 jobs. In all, Team France was responsible for 57% of international investment projects in 2019,” said Christophe Lecourtier.

Business France is the national agency supporting the international development of the French economy, responsible for fostering export growth by French businesses, as well as promoting and facilitating international investment in France.
It promotes France’s companies, business image and nationwide attractiveness as an investment location, and also runs the VIE international internship program.
Business France has 1,500 personnel, both in France and in 56 countries throughout the world, who work with a network of partners.
Since January 2019, as part of the reform of the state support system for exports, Business France has given private-sector partners responsibility for supporting French SMEs and mid-size companies in the following markets: Belgium, Hungary, Morocco, Norway, the Philippines and Singapore.

For further information, please visit: www.businessfrance.fr @businessfrance

Media contacts:
presse(@)businessfrance.fr
Cynthia Odsi, Senior Press & PR Advisor
Cynthia.Odsi(@)businessfrance.fr
Severine de Carvalho, Press Officer
Severine.deCarvalho(@)businessfrance.fr

Source : https://investinfrance.fr/france-top-european-fdi-destination/