EPISODE 01

France Attractiveness
Survey 2023
Executive SummaryMay 2023

The general feeling among international executives
in 2023: short-term resilience, medium-term
concern about the attractiveness of France

Despite various shocks, France
continues to lead the race in Europe

The rebound in a post-Covid Europe has beenhampered in 2022, as the total number of foreign
direct investment (FDI) projects announced in thecontinent grew by just 1% when compared to 2021.
The number of projects remains below pre-pandemic
levels, and the record level of 6,653 projects
reached in 2017.
In 2022, France remained the most attractive
country in terms of the number of announced FDI
projects, with 1,259 new establishments orexpansions. This marks the fourth consecutive year
in which it retained its first place ranking in Europe.

12However, employment figures in France have not
kept pace. The number of jobs provided by FDI
projects fell by 15% between 2021 and 2022. On
average, foreign investments create fewer jobs inFrance (33 per project) than in the rest of the main
host countries for foreign investment in Europe (58in Germany, and 59 in the UK).

EY | France Attractiveness Survey 2023 | Episode 01

FDI projects in the UK continue to stall due toBrexit (929 projects, down 6% compared to 2021).
Nevertheless, the UK, despite being severely
impacted by inflation and the energy crisis, continue
to attract projects which offer more job
opportunities and strategic importance. Germany
attracted “only” 832 projects in 2022, as low
unemployment, high labor costs and the difficulty
for foreign companies to enter industrial chains limit
its attractiveness to investment.
In the rest of Europe, fortunes are mixed. Themovement resulting from the reorganization of
supply chains, the consolidation of services centersand financial optimization appears to have benefitedcertain countries. This is particularly evident inSouthern European countries, namely Portugal, Italy
and Turkey, each of which recorded notable
increases. Another phenomenon observed was that
Ireland and Poland appear to be benefiting fromprojects deferred due to Brexit and the war in
Ukraine.

The desire to invest in France in 2023 remains strong. Nearly twothirds of business leaders surveyed have immediate plans to invest in
the country this current year, despite its tense economic, political andsocial situation.
However, the three-year outlook displays a level of concern amongrespondents. Our survey confirms the effect of the current economic
factors (rising energy and raw material costs, falling consumption, highinterest rates etc.) on the morale and confidence of foreign leaders.
Our survey was conducted via interviews with 204 executives between
15 February and 15 March 2023. Political and social tensions during
this period may have led respondents to question the government’s
ability to pursue reforms to improve competitiveness, reduce debt andthe trade deficit as well as support “made in France” investments, while
simultaneously investing in healthcare, education and infrastructure.
Further, the parameters that guide corporate location decisions arechanging. Historically, factors linked to national competitiveness (costs,taxation, corporate law, infrastructure, skills, etc.) ranked among thehighest priorities. In recent times, additional priorities have been added
to this list, such as the availability of carbon-free energy, supply chain
resilience and the ability to adapt to local ecosystems.

2

A more industrial and innovative France,with a shortage of logistics and office jobs

France continues to rely on a very wide varietyof sectoral know-how. The FDI projects
announced in 2022 also appear to be more inline with the imperatives of transforming oureconomy. For example, almost 30% of
manufacturing projects in the automotive sector
are intended for the production of electric andhybrid vehicles. Meanwhile, in the healthcare
sector, our analysis reveals the start of amovement to repatriate production capacities
back to France.

12Industry remains a driving force of France’sattractiveness. 40% of FDI projects announced
in 2022 (547 of 1 259) involve establishing orexpanding a factory. Despite the current energy
crisis, the availability of low-carbon energy
remains France’s main asset for industrialmanagement.

EY | France Attractiveness Survey 2023 | Episode 01

As further proof of the origin of France’sattractiveness, the country ranks as the“European champion of innovation” with 144
R&D center projects, ahead of both the UK andGermany.
Conversely, France must do better inheadquarters as it remains behind the UK, with133 headquarters projects in 2022, compared
to France’s 78. The situation appears all themore worrying since just 10% of the foreign
executives we interviewed plan to establish or
expand their decision-making centers in France
over the next three years.
While e-commerce turnover in France grew by
33% between 2019 and 2022, the country
suffered a sharp drop in investments inlogistics platforms (-21% Y-o-Y change in2022). France is paying a price for the lack ofavailable land and the cumbersome
administrative procedures that many companies
face.
Finally, in services, the impact of remote
working is still being felt. The number of backoffice and service centers remains far from preCovid levels (395 services platforms and backoffice projects in France in 2022, versus 450 in2017), a trend that can also be observed acrossthe rest of Europe.

dynamic nature and also of the uncertainty
resulting from Brexit.
Outside the major cities, France continues toattract foreign investors: almost half of FDI
projects concern rural areas or medium-sized
towns with fewer than 200,000 inhabitants.

In terms of regional ranking, Île-de-France(Greater Paris region) remains in the lead,ahead of Auvergne-Rhône-Alpes (Lyon) andHauts-de-France (Lille). For the first time, theFrench capital region ranks ahead of GreaterLondon, a demonstration of both France’s

3

Contact

EY | Building a better working world
Marc LhermittePartner – EY
+33 6 08 87 97 39
marc.lhermitte@fr.ey.com

EY exists to build a better working world, helping to create longterm value for clients, people and society and build trust in thecapital markets.
Enabled by data and technology, diverse EY teams in over 150
countries provide trust through assurance and help clients grow,transform and operate.
Working across assurance, consulting, law, strategy, tax andtransactions, EY teams ask better questions to find new answers
for the complex issues facing our world today.
EY refers to the global organization, and may refer to one or more, of the member
firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst &Young Global Limited, a UK company limited by guarantee, does not provide services
to clients. Information about how EY collects and uses personal data and a descriptionof the rights individuals have under data protection legislation are available via
ey.com/privacy. EY member firms do not practice law where prohibited by local laws.
For more information about our organization, please visit ey.com.
© 2023 Ernst & Young Advisory
All rights reserved.
Studio BMC France – 2302BMC031-01
SCORE N°2023-042
ED NONE
This material has been prepared for general informational purposes only and it is not intended to berelied upon as accounting, tax, or other professional advice. Please refer to your advisors for specificadvice.

ey.com/fr