France Retains Top European FDI Spot Amid Declining Investment Projects in 2025

France has maintained its position as the leading destination for foreign direct investments (FDI) in Europe for the seventh consecutive year, despite facing a notable decline in the number of new investment projects and job creation in 2025. According to the EY Barometer released in May 2026, France recorded 852 foreign investment projects—a 17% decrease compared to 2024—and created approximately 28,000 jobs, reflecting a modest 4% decline. However, total projected jobs linked to foreign investments dropped sharply by 25%, from nearly 270,000 in 2024 to just over 202,000 in 2025, indicating fewer large-scale projects contributing to employment.

A significant 62% of the investments in France were extensions of existing sites, with only 354 new industrial projects initiated, signaling challenges in attracting fresh ventures. Key historic sectors such as automotive, chemicals, and metallurgy continue to falter, with R&D center investments plunging by 47%. Moreover, American and German company investments in France have halved since 2022, underscoring a fragility in France's attractiveness despite its extensive market, skilled workforce, and innovative capacity.

Regionally, disparities persist with Brittany hosting only 19 investment projects, while regions like Pays de la Loire and Normandy show mixed results. Furthermore, France faces increased competition from the UK, which now surpasses France in attracting new company headquarters and financial services investments. Meanwhile, countries such as Turkey and Romania are gaining ground due to their competitive labor costs and business-friendly regulations.

EY experts warn of a "two-speed Europe" in FDI dynamics and caution that without accelerated reforms, France’s allure may continue to diminish. About 69% of foreign business leaders believe France’s attractiveness will not improve by 2028. Despite these headwinds and a challenging global economic backdrop marked by geopolitical tensions and reduced greenfield investments, France's strong fundamentals keep it ahead of rivals such as Spain and Poland in investment rankings. The coming years will test France's ability to innovate and retain its leadership amid intensifying international competition.