France: Investing in France
As a result of the COVID-19 pandemic, FDI flows to France fell by -47% in 2020, from USD 34 billion recorded in 2019 to USD 21 billion, partly due to lower M&A sales, which fell from USD 18 billion to USD 5 billion, according to the World Investment Report 2021 published by UNCTAD. The stock of FDI in 2020 was about USD 968 billion. 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 rebounded to USD 10.8 billion in the first half of 2021. France is the 18th largest recipient of FDI in the world (losing three positions compared to 2019). Luxembourg, the Netherlands, the United Kingdom and Switzerland are the main investors in France and represent more than 50% of the stock of FDI. According to data published by the Bank of France, FDI stocks are mainly intended for the manufacturing industry, real estate, and for financial and insurance activities. 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.
The country is ranked 32nd out of 190 countries in the Doing Business 2020 report published by the World Bank (latest report). 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 | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 28,363 | 4,870 | 14,193 |
FDI Stock (million USD) | 854,925 | 963,797 | 977,990 |
Number of Greenfield Investments* | 613 | 573 | 441 |
Value of Greenfield Investments (million USD) | 17,847 | 14,964 | 11,964 |
Source: UNCTAD, Latest 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.
Country Comparison For the Protection of Investors | France | OECD | United States | Germany |
Index of Transaction Transparency* | 8.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 3.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 6.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
France is one of the top ten world economic powers and has many assets to attract foreign investors:
The main obstacles to attracting FDI in the French economy are:
Many reforms have emerged in recent years with the aim of revitalizing the national economy and attracting foreign investors. Here are the main ones:
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Latest Update: January 2023