Foreign investment in France at a ten year high

April 11, 2018
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French Economy Minister Bruno Le Maire called the increase in French foreign investments “the most concrete proof yet that France is back”/AFP-File

, PARIS, France, Apr 11 – With 1 298 new projects, foreign investment reached a ten year high in 2017. France is confirming its appeal and Americans are once again the country’s top foreign investors.

The Chinese corporation BYD is poised to invest in a 10 billion euro factory that will build electric buses in Beauvais (Oise) whilst Sartorius Stedim Biotech, a German company that specialises in biopharmaceutical containers is investing 33 million euros into their site in Aubagnes (Bouches-du-Rhône).

Whoever said France wasn’t attractive to investors? On average, France benefitted from 25 investment decisions a week in 201. All told, foreign investors committed to 1 298 projects last year which represents a year-on-year increase of 16. At no point in the last ten years have foreign investors been of such importance to this country. The current dynamic benefits France as a whole and sustains employment. In fact, these foreign funds have allowed for the creation of 26 400 jobs, a 6% increase and preserved around 7 000.

“The increase in investment decisions, as well as the subsequent number of jobs created, underline renewed confidence in a forward-thinking France”, says Christophe Lecourtier, Business France’s Director General.

Equally noteworthy is that France is appealing to new companies too, as a third of investment decisions were made by actors new to the French market. This trend was confirmed during the “Choose France” summit in Paris in January; the leaders of 140 multinational companies announced 3.5 billion euros of investments and the creation of over 2000 new jobs over 5 years. The numbers are clear, there is renewed confidence in the French market for investors. It has to be said, France is now far more appealing than some negative commentators would have you believe.

Second most attractive country in Europe

This wave has a few explanations. Firstly, France is benefitting from the renewed growth in global markets. According to Insee, France’s Gross Domestic Product rose by 2% last year. Furthermore, the coverage by international media outlets of ’s election projected the image of a young and determined France, able to resist extremes.

Foreign investors reacted positively to the energising reforms put in place in the very first few days of the new President’s term in office. The lightening of corporate fiscal burdens and reforms to the labour market have added to a growth-friendly France. More than eight in ten leaders consider that these measures as a whole are having a positive impact on France’s attractiveness.

“Our country’s image, economically, is clearly improving: according to research by Kantar Public for BF, 84% of investors consider the French economy “attractive” (up 10% from 2016)” points out Christophe Lecourtier. On the European level, France has moved up the ranks to become Europe’s second most attractive nation, having traditionally been third behind the United Kingdom and Germany.

The United States at the forefront

The United States has reclaimed the top spot when it comes to foreign investment and job creation in France, with a 26% increase in the number of investment projects. American investors represent around 18% of all foreign investment in France and 21% of the subsequent job creation.

American companies tend to favour France, especially when it comes to R&D. In fact, they represent a quarter of all foreign investment in French research centres. In Lille (North), the global leader in IT solutions and services, IBM, created a European Research and Development centre on cybersecurity. Opening on December 14th, it will employ between 80 and 100 members of staff.

European investments are still dominant, however: 58% of job-creating foreign investment originated from Europe. For example, Germany tops the list of foreign investments in the industrial activities sector. With 56 decisions in this sector, it is responsible for 16% of all investment and 20% of subsequent jobs.

Asian investors are also eyeing up French markets. Seduced by France’s digital environment, Naver, the “Korean Google”, which has 30 million users, has bought up Xerox’s research centre in Meylan (Isere) to open its very first European R&D centre. It also set up a subsidiary that will employ around 35 people based in Station F in Paris, the start-up incubator set up by Xavier Niel and opened in 2017. Another example is Fujitsu, a key player in the Japanese information and communication technology sector has decided to set up a centre for excellence in the region of Paris.

An appealing industrial fabric

Despite industry representing a decreasing share of France’s GDP, her industrial fabric remains very attractive and foreign investment in production activities leapt up 27% in 2017. They represent 26% of all foreign investments and allowed for the creation or maintenance of 16 213 jobs in France. When quizzed on the pull factors that made France attractive, international business leaders based in France highlighted the transport and logistics infrastructure (87%), the size of France’s domestic market (84%) and her industrial fabric (84%).

Germany is particularly active in this sector. For example, Atlas GmbH, a German group specialising in building construction machinery, decided, in 2017, to buy a factory from TIM, a company that makes cabins for tractors and construction machinery in Quaëdypre (Hauts-de-France).

This move allowed to save 446 of 480 jobs. The United States is also attracted by production activities in France and they represent 16% of investment decisions and subsequent job creation. American corporation Eastbalt, therefore, invested 30 million euros in an industrial production unit to create “petit pains” for Burger King in the region of Paris. A 30 million euro project that will create 60 jobs.

An innovative country

On a global scale, France is a leading country in terms of innovation and eight in ten economic influencers perceive France as a creative economy. In 2017, 125 investment decisions in R&D activities were made by foreign investors, representing an annual increase of 9%. Global tech giants like Cisco or Google haven’t missed this and are reinforcing their presence in France. Additionally, France has drawn the likes of Facebook which opened its first artificial intelligence research centre outside of the United States.

The social media platform which boasts 2 billion users has also settled its very first incubator, ‘Le Garage’, aiming to coach French digital start-ups in Station F. Another example is that of Symphony Communication Services – the secure cloud-based document and message sharing platform, valued at a billion pounds, which decided to open its first European R&D centre in Sophia Antipolis (Alpes-Maritimes).

The renewed faith of foreign investors should be further bolstered this year. In fact, reforms announced in 2018 as well as changes to the foreign investments support structures in France, should increase this already positive trend.

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