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Inversió estrangera directa (IED) a França

FDI in figures

After dropping as a result of the COVID-19 pandemic, FDI flows to France rebounded in 2021 (+191.4%), but remained below pre-crisis level. From USD 4.87 billion recorded in 2020, they reached USD 14.19 billion in 2021, according to the World Investment Report 2022 published by UNCTAD.

The stock of FDI in 2021 was about USD 978 billion (UNCTAD). Despite the crisis, investment in certain strategic sectors, such as R&D, health care and renewable energy, recorded a rise. According to OECD data, FDI flows to France amounted to more than USD 11 billion in the first half of 2022. In terms of FDI inward stock, France is the 13th largest recipient of FDI in the world (UNCTAD). Luxembourg, Switzerland, the Netherlands and the United Kingdom are the main investors in France and represent more than 50% of the stock of FDI (Bank of France, 2021). According to data published by the Bank of France, FDI stocks are mainly intended for the manufacturing industry, financial and insurance activities, and real estate. The Paris region has the largest concentration of multinational headquarters in Europe (Global 500 ranking from Fortune magazine). One of President Emmanuel Macron's goals is to attract more multinationals currently based in London.

According to the latest The Economist’s Business Environment ranking, France ranks 6th out of 82 countries, a slight improvement compared to the previous years. Prospects for further reforms are weak, preventing some long-standing weaknesses in the business environment, including the tax system and the labour market, from being addressed (The Economist). The country's assets are its position as the third European power, its highly qualified workforce, its vast industrial base, its agricultural resources, its world cultural reputation and its geographic location in the center of Europe.

 
Foreign Direct Investment 202020212022
FDI of inward flow (milions USD) 11,35930,88536,413
FDI inward stock (milions USD) 952,937944,763896,806
Number of Greenfield investments 590595614
Value of Greenfield Investments (million USD) 15,85213,95620,238

Font: UNCTAD, last available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 
Comparison of protection for investors França OECD Estats Units Alemanya
Index of transaction transparency 8.0 6.5 7.0 5.0
Index of managers responsibility 3.0 5.3 9.0 5.0
Index of shareholders power 6.0 7.3 9.0 5.0

Font: Doing Business, last available data

Note: Investior protection - Definition

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Why you should choose a França

Strong points

France is one of the top ten world economic powers and has many assets to attract foreign investors:

  • A strategic geographical location in the centre of Western Europe
  • A developed tertiary fabric (including tourism), a vast industrial base and strong agricultural production capacity
  • Leading infrastructure and quality public services
  • A skilled and productive workforce (2nd European country in terms of hourly productivity) and a dynamic demographics
  • An investment-friendly business environment and a relatively stable and transparent legal framework
  • A diversified economy that is full of a wide range of players ranging from large multinationals to high-tech start-ups (French tech).
Weak points

The main obstacles to attracting FDI in the French economy are:

  • One of the highest corporate tax rates in the world
  • High cost of labour
  • Heaviness of the tax and work regimes
  • High unemployment rate (7.9% in 2021, INSEE) which particularly affects young people and older workers
  • Growing inequalities
  • High public spending fuelling already significant public debt (112.3% of GDP in 2021, IMF)
  • A low level of SMEs operating for export or investing in innovation
Government measures to motivate or restrict FDI

Many reforms have emerged in recent years with the aim of revitalizing the national economy and attracting foreign investors. Here are the main ones: 

  • The number of administrative formalities for the establishment of foreign companies has been reduced. 
  • The establishment of a tax credit program of 20 billion EUR (competitiveness tax credit), the abolition of the solidarity tax and the creation of the research tax credit and incentives for young innovative companies. 
  • The reform of the labour legislation reinforcing vocational training and adding more flexibility to the labour market. 
  • The reduction of the corporate income tax rate from 33% to 25% by 2022.
  • Competitive taxation of research and temporary exemption arrangements for innovative start-ups and new businesses.
  • Foreign companies have access to the same subsidies as French companies (support for productive investment, R&D, vocational training, job creation, etc.).
Bilateral investment conventions signed by França
France has signed bilateral investment agreements with 115 countries.
To see the list, click here.

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