FRANCE CHAMPION OF EUROPEAN ATTRACTIVENESS FOR FOREIGN INVESTORS

In 2019, France became the first destination for foreign investment in Europe, when the emergence of "yellow vests" had raised fears of a decline in its position on the Old Continent. The Hexagon has indeed recorded last year 1,197 projects of foreign establishments on its territory, a figure up by 17% compared to 2018. France is thus ahead of the United Kingdom and Germany, its historic competitors .

The head of state Macron did not skimp to attract foreign investors. The Choose France event, organized for the third time on a grand scale in Versailles, brought together in January 2020 no less than 200 business leaders from more than 40 different nationalities (from Netflix to YouTube, via Snapchat, Lime, BMW, Fedex or General Electric).

Economic reforms such as work orders, the transformation of the CICE into lower social charges for employers, visa facilities for tech entrepreneurs, etc. have shown that France is transforming into a “business friendly” country for investors. Foreign companies located in France now employ 2 million people, represent 21% of private R & D expenditure and 31% of our exports.

But the economic crisis caused by the Covid-19 risks reshuffling the cards.

The annual barometer produced by EY provides information on the state of mind of foreign investors today. According to EY's analysis, around 65% of the investments announced in 2019 (which number 1,200) would be maintained, 25% would be postponed or heavily revised and 10% canceled.

In addition, if investment projects should continue in certain “spared” sectors such as health, online leisure or e-commerce, they should however slow down considerably in the aeronautics, automotive, industrial equipment, chemicals and plastics, in particular for subcontractors.

The removal of containment and the recovery plan will obviously be two of the key challenges of the months to come to reassure investors, the firm believes.

But the case of Amazon, which closed its warehouses for several weeks following a court decision, that of the Renault factory in Sandouville, which the Havre court ordered provisional closure for procedural reasons, marked minds, and probably representatives of foreign companies based in France. “Be careful, France is now under surveillance.

Investors have only one fear, it is that France will forget the competitiveness package it had put in place and react to the crisis by imposing, for example, heavy and authoritarian counterparties on the inevitable safeguard plans of future employment, by increasing corporate taxation, slowing down the necessary adaptation of working time, etc. To do so would be a monumental mistake because investors need stability.

The competition for recovery is starting now and, if France moves towards less flexibility and returns to these old demons, our country will pay dearly for it. “, Emphasizes Marc Lhermitte, author of the study.