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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.

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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ECONOMY

Warning: 6 of the most common scams in France to watch out for

From computer hacking to phone calls, a new report reveals that scams and frauds are unfortunately on the rise in France and the criminals are getting more sophisticated - here are some of the most common frauds to be aware of.

Warning: 6 of the most common scams in France to watch out for

France’s fraud and financial crime watchdog, Tracfin, has published its annual report, indicating that fraudulent activity has become both more frequent and more evolved in the last year.

The report highlighted the most significant forms of fraud tracked by the watchdog. In particular, it found that CPF (Compte Personnel de Formation) scams represented a significant proportion of the fraudulent activity registered this year. 

These are the scams the report highlighted:

The CPF scam: The Compte Personnel de Formation is available to all employees in France. Essentially, they are given access to money each year for free professional training (€800 for unskilled workers, €500 for full-time, skilled workers).

This is a real, government-backed scheme with a genuine website and app – it’s particularly useful for foreigners in France because the money can be used for French classes. Here’s how it works.

Unfortunately, however, the name is frequently used by scammers and Tracfin director Guillaume Valette-Valla warned that these scams have become more professional, often now involving transnational criminal organisations, particularly those located outside the EU, as well as shell companies that exist to siphon off the public money.

A lot of these scams involve SMS messages and phone calls warning people that they would lose their allowance and urging them to sign up to training courses have become increasingly frequent. These messages often contain fraudulent links asking recipients to enter their personal details onto dodgy websites.

The presence of CPF shell companies dramatically increased in 2021, according to the report. Tracfin received 116 reports of suspicion of shell companies, which is a significant increase from the 10 reported in 2020. 

For CPF fraud overall, the scams racked in accounted for over €43.2 million compared to €7.8 million a year earlier.

READ MORE: Beyond the scams: How to use France’s €500 training budget

The carte vitale scam – if you live in France your carte vitale is a vital document, allowing you to access publicly funded healthcare.

An increasingly common scam is sending a text message or email telling a person that their carte vitale is about to expire, and to click on the link and enter their details to keep it active. This is a scam, the carte vitale does not expire. If you need to make any changes to your card or request a new one if you have lost of stolen it, use your online Ameli account or visit your local CPAM office.

Driving scams – summer is the time of year when thousands of people – both locals and tourists – take to the roads for a trip away, and scammers often prey on drivers.

Some scammers operate at service stations, approaching non-French drivers and spinning them a sob story to try and extort money, while others operate insurance scams by pretending that you have damaged their car. There are also sporadic reports of ‘fake cops’ who try to issue on-the-spot cash fines to cars with foreign number plates.

Driving in France: The common scams thieves try on foreign motorists

Postal scams – it’s a very common experience to get a message from La Poste or a parcel courier telling you that you were out when they tried to deliver a package. Usually you will just need to arrange another time or head to the post office, but beware of text messages or emails telling you that there are outstanding charges for a parcel, with a link to enter your card details.

Couriers do not operate like this and if there are any outstanding postage or customs charges, you pay them in person not via a link in an email or SMS.

Ransomware attacks – France also saw a rise in ransomware attacks – particularly those targeting small businesses.

In 2021, the French National Agency for Information Systems Security (ANSSI) handled 203 ransomware attacks, compared to 192 in 2020 and 69 in 2019. This represents an increase of 194 percent increase in incidents handled in two years. These attacks were predominantly (over 52 percent) targeted at very small, small and medium-sized businesses.

Ransomware attacks are on the rise for two reasons: a lack of digital literacy and security, and an increased specialisation and professionalisation of the criminal ecosystem.

Fraud on government schemes: Tracfin also noted a rise in fraudulent declarations for government schemes, particularly those made available as emergency responses to the Covid-19 crisis.

These were mostly represented by misuse of compensation for short-time work, emergency aid for companies, self-employed people and business owners, and state-guaranteed loans.

Looking forward – the report also warned how NFTs (Non-fungible tokens) could constitute an additional fraud and cybersecurity risk for people across the country.

So far, Tracfin has received reports of scams involving NFTs whose value has been artificially increased (“pump and dump”), NFTs copying or plagiarizing original works without having the copyright or simply fake NFTs that disappear once they are downloaded from a fraudulent website. The watchdog also highlighted that NFTs could eventually be used for tax fraud. 

On top of tracking scams within France, Tracfin was also involved in tracking down the assets of Russian oligarchs after sanctions against Moscow went into place following the invasion of Ukraine, estimating that €1.18 billion worth of financial and non-financial assets have been frozen in France since the beginning of the conflict.

If you are contacted by a company and you are not sure if it is genuine, the French government has compiled a ‘blacklist’ of dodgy companies that frequently try and defraud people – you can find it here.

If you think you may have fallen victim to a scam, particularly if you have shared your banking information, the first step is to contact your bank. You can learn more about what to do in this scenario, HERE

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