Since the Brexit schism in 2020, France has been trying to pull the plug on itself. With almost 1,200 business establishments or expansions announced in 2023, the country has consolidated its number one position in the European ranking established by EY, ahead of the United Kingdom and Germany, which respectively display 985 and 733 projects. foreign investment (FDI). However, it would be wrong to throw the baby out with the water of the Thames. English competitiveness has certainly taken a hit. But on a city scale, the essential London metropolis remains the most attractive in Europe in terms of the number of FDI.
Above all, the City knows how to attract the most strategic investments: head offices, financial firms and tech champions thrive there. Thus, 88 headquarters projects have been identified in the United Kingdom in 2023, compared to 71 for France, located mainly in capitals and their surrounding areas. “In the financial sector, the gap is even more striking”, point out the authors of the study: 39 new projects in France, down 13% over one year despite great prizes such as the Singaporean fund Temasek , compared to 108 across the Channel, a figure up 42%. “Brexit has not affected the very high concentration of finance in Greater London, which represents around 500,000 jobs,” notes Marc Lhermitte, partner at EY.
Defensive strategy
In digital technology too, France is left behind, with almost half as many projects in the pipeline. It must be said that start-ups in the sector know where to find the capital necessary for their growth. The latest EY venture capital barometer estimated the funds raised by “British nuggets” at more than 16 billion euros. Twice as much as for French Tech.
Nothing to shout about Karicoco, then. But “Paris is gaining momentum in the face of a more defensive strategy from London,” believes Marc Lhermitte. The French economy is more diverse. The first five sectors of activity only account for 45% of FDI projects hosted in 2023, compared to 62% in the United Kingdom. With its international high schools and an advantageous tax regime for impatriates, the Paris region, in particular, has attracted large international banks wishing to establish a foothold in continental Europe.
Reduction of social charges on low wages, labor law reforms: EY recognizes the efforts made in recent years by France. The fact remains that, on the question of competitiveness, the advantage remains British. The hourly cost of labor is 1.5 times lower, points out the consultancy firm, which favors projects that are more productive in terms of employment. The investors surveyed also have some specific grievances. EY notes that “to attract larger projects and improve quality”, our country would be well advised to progress in terms of automation and speed in the issuance of building permits and other environmental authorizations.
A few days before the 7th edition of Choose France, the Elysée welcomes an “unprecedented enthusiasm” from international investors for this event, with a full ball schedule for several weeks. But if France wants to reduce the gap with its eternal best enemy, there is no secret: “We must go further on the tax aspect,” confides the EY partner. Hence the proposed law on financial attractiveness from MP Alexandre Holroyd, under discussion in parliament. The budgetary equation nevertheless leaves little room for maneuver.
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