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France named most attractive country in Europe for foreign investment

France has topped the rankings for the most attractive country in Europe for foreign investors for the second year running, beating the UK into second place, an annual study revealed.

Published: 7 June 2021 17:17 CEST
France named most attractive country in Europe for foreign investment
President Emmanuel Macron has been keen to make France more business friendly. Photo: Ludovic Marin/AFP

Despite the economic crisis caused by the pandemic, the annual barometer by accountancy firm EY firm, published on Monday, made cheerful reading for the French government, which has worked hard at attracting more foreign investment.

READ ALSO Five reasons why you should set up your own business in France

The 20,000 foreign firms which are based in France create 2 million jobs and contribute 30 percent of the country’s exports, according to the report.

In 2020 there were 985 foreign direct investments announced in France, against 975 projects in the United Kingdom and 930 in Germany. 

Among these investors was Barilla, the world’s largest pasta producer. With its industrial bakery Harrys, the Italian multinational food company has five factories and employs 1,500 people in France. 

While the firm traditionally invests €10 -15 million per year in France, it invested €33 million last year, with €28 million for the construction of a new line of production in the factory of Talmont-Saint-Hilaire in the department of Vendée, reported Le Parisien. 

“When I went to the board meeting in May 2020, at the worst moment of the crisis, I didn’t think these investments would be accepted,” President of Western Europe Barilla Miloud Benaouda told Le Parisien.

“This was a nice surprise. But at the same time, I’ve never had any difficulties in selling France.” 

 “I often hear France bashing,” added Benaouda.

“But in reality, even if things are not all perfect, France is a favourable area for investment. The local authorities’ support is quite exceptional, the country is highly competitive with low energy costs, one of the best transportation network in Europe and qualified people.”

Although France remained the most attractive country in 2020, the number of foreign direct investments announced fell by 18 percent compared to 2019, according to the EY barometer.

At European level, the average drop is 13 percent and the decline is only 12 percent in the United Kingdom, and 4 percent in Germany. 

The report stated that while the aeronautics and tourism industries – both hit particularly hard by the pandemic – are important in France, investors interviewed by EY said the country “defended relatively well its attractiveness” during the health crisis “especially thanks to government support measures for businesses and the country’s economic recovery plan”.

And 44 percent of them said the recovery plan had been more efficient than that of other countries. 

The sector that received the most foreign investment in France in 2020, with 146 projects, remains that of software and information technologies. 

Furthermore “it’s the first time the number of projects of foreign investments in Ile-de-France exceeds that of Greater London,” associate director at EY Marc Lhermitte told Le Parisien.

“We went from 30 projects in 2019 to 41 in 2020 whereas, in the UK, they went the other way around, going from 67 to 38 projects.”

Emmanuel Macron’s government has pushed hard to make France more business-friendly, relaxing some of the country’s famously tight employment laws and offering support to new investors to navigate France’s tricky bureaucracy.

They have also been keen to attract businesses and talent leaving the UK in the wake of Brexit, and have set up the Choose France programme, which offers English-language information, advice and support to people thinking of moving themselves or their businesses to France.

For entrepreneurs, there is also the Passeport Talent visa.

READ ALSO The little-known visa that could make moving to France a lot easier

Member comments

  1. This is no surprise. In my industry, France has gone from nowhere to world leaders in the last twenty years.
    The French take a minute or two to get round to changing and legislating things, but when they do, they are brilliant.
    Alors mecs, avez-vous pensé à faire des motos?

  2. It is a surprise to me as in my industry there are so many obstacles to getting started (I am in year two of just trying to register) and then so many penalties for doing well or wanting to do well…this is the only country I know of that actively penalises hard work and ambition. However I suspect at multinational level the game is played very differently than down at the bottom of the pile where us ‘mom and pop’ type businesses operate.

  3. We’re just getting started and will incorporate a company to sell our products in the EU. Based on what I’ve read my hopes are up.

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LIVING IN FRANCE

Reader question: What are the rules for selling food you’ve grown or made in France?

If you’ve had a glut of courgettes or tomatoes from your plot, or you want to introduce your neighbours to the joys of a British-style Victoria sponge you might consider selling some food or produce. But you may need a permit first.

Published: 2 February 2024 12:58 CET
Reader question: What are the rules for selling food you’ve grown or made in France?

Garden produce

Under current regulations, the sale of courgettes, lettuces, tomatoes and other produce from home gardens remains tax-free as long as the surface area of your garden does not exceed 500 square metres, is attached to the home, and the sale of goods is not the main professional activity of the person growing and selling it.

That means, if you’ve had a bumper crop, you are free to sell your excess produce, and you’ll often see little stalls of people selling fruit, veg or honey from their gardens, sometimes with a “honesty box” to leave your money in.

According to the French government, the sale of fruit and vegetables from one’s garden falls into the category of “incidental income”. 

If, however, your garden or allotment is separate from your home, income from the sale of crops is taxed as farm income, and you must register as a business – which you must also do if you intend to make growing and selling produce your main source of income.

A smallholders/small farmers regime – micro-bénéfice agricole – is applied if the average income, calculated over three consecutive years, does not exceed €85,800 before tax.

Homemade food

One-off charity bake sales are one thing, but if you want to make and sell cakes or other homemade food for profit, there are specific rules to follow – with fairly hefty punishments, up to and including imprisonment, for failing to respect them. 

One of the first things to do is to declare your activity on the Guichet Unique (One Stop Shop) website and obtain approval if you use any products of animal origin. 

Be aware that you will not get a pitch at a market if your business is not properly registered, complete with a SIRET number and a market trader’s card – known as a carte permettant l’exercice d’activités non sédentaires. 

The good news is that the card is free from your local chambre de commerce. It just takes a bit of paperwork, and a passport photograph… Then you can make a formal application to the market where you want to trade.

As well as the market trader’s card, you will need:

  • a temporary occupation authorization (AOT);
  • a licence for the sale of takeaway drinks or alcohol, if appropriate;
  • approval from veterinary services, if you’re selling cooked meat-based foods. Professionals must also submit a declaration of handling of foodstuffs of animal origin to the direction départementale chargée de la protection des populations (DDPP) .

If you want to set up a stall or van away from an established market, you will need to visit the local mairie to ask about a pitch, which you may have to pay for.

You must also respect current standards regarding food safety and kitchen hygiene. For example, you have to complete a food safety training course, while your kitchen will be subject to health authority inspections to ensure it meets current hygiene standards, and that you follow safe food handling methods.

All food that you sell must be correctly labelled, with information about ingredients, allergens, and the date of preparation.

If, however, you are already registered as a farmer or local food producer, you can sell foodstuffs related to your farming business under more relaxed rules.

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