France held its no. 1 position in 2020, receiving 985 investment projects across the country. For the second year running, it was ahead of the United Kingdom (975) and Germany (930).
This achievement demonstrates the robust fundamentals of the French economy, strengthened by the proactive reforms the Government has implemented over the last four years.
A vast programme of long-term reforms has been implemented since 2017 to enhance France’s attractiveness for businesses. The Government has taken strong steps to boost competitiveness: cutting corporate taxation, reforming the labour market, making the research tax credit permanent, and reforming the taxation of persons through the creation of the flat tax on income and the real estate wealth tax.
In addition, the Government has worked to simplify procedures for companies and investors, particularly through the 2019 business transformation and growth (PACTE) Act. These structural, long-term reforms made France Europe’s most attractive country in 2019.
France’s continued leadership this year demonstrates the effectiveness of the massive support measures deployed by France to address the economic consequences of the COVID-19 crisis. An exceptional emergency plan was implemented to support companies and preserve the economy’s fundamentals, jobs and, therefore, skills and expertise, with a clear result: foreign investors remain confident in France, as shown by regular reinvestment in their French sites (60% of projects identified are extensions).
The swift implementation of the France Relance recovery plan in summer 2020 and the Government’s continued attractiveness policy have bolstered France’s position in Europe. This survey confirms the excellent perception of the French business environment and the Government’s economic policy among international business leaders: 44% of foreign investors think France Relance is more effective than the recovery plans adopted by other European countries, while 56% of investors questioned planned to bring back activities to France.
The detailed responses show that France stands out in many categories. It ranks first for:
- Installation of industrial projects, well ahead of competitors, with 341 manufacturing and industrial projects as against 153 in Turkey and 112 in the United Kingdom.
- Installation of R&D centres, with 115 new investments in 2020, ahead of the United Kingdom (114) and Germany (63).
- Job creation, with 30,558 new jobs created in 2020, up 21.6% since 2017, including 10,636 jobs created in the industrial sector (35% of the total).
Moreover, 58% of business leaders believe France can become a global leader for ecology in the next five years.
Lastly, thanks to the post-Brexit effect and the attractiveness of the Paris financial centre, projects in the finance sector rose by 23% in 2020. This momentum makes Paris a leading European financial centre.
For more details, EY reports.