France attracts more foreign investment in 2017

France is the third most attractive European country for foreign investors, according to a study by accountants EY. And it is becoming more attractive. In 2017 there were 31 percent more new foreign direct investment projects than in 2016, which itself saw a 30 percent rise, the survey found.

Paris's La Défense business district in 2016 REUTERS/Charles Platiau

Foreign companies planned to start or increase investment in 1,019 projects in 2017, EY found.

That puts France in third place in the European league table, behind Britain, with 1,205 projects, and Germany, with 1,124.

And, as Brexit negotiations drag on, for the first time Paris is judged more attractive than London by a panel of 502 international business leaders.

But the investment may not create as many jobs as might be hoped - with 25,126, France only comes in fourth in terms of job-creation, trailing the UK, with 50,196, Germany, with 31,037, and Russia, with 25,788.

Other findings include:

• Industry attracts the most attention, with 323 projects, although mostly expansion on existing sites which creates only 32 jobs per project;

• Plans for decision-making centres, which Paris hopes to attract because of Brexit, rose 43 percent to 59, putting France in second European position behind Britain, whose score fell from 138 to 95;

• Research and development projects rose 53 percent to 78;

• The US is the top foreign investor, followed by Germany and the UK;

• At 81 percent, up eight points in a year, investor satisfaction has never been so high;

• France outstripped the European average of a 10 percent rise in projects, down from 15 percent in 2016;

• In a survey of 208 foreign business leaders, 55 percent believe that France's attractiveness will continue to increase over the next three years, up from 27 percent last year;

• But the trend may have peaked - only 24 percent of those asked said their company has projects in the pipeline, down two points on 2016, and nearly all of them are already working in France.

Although the upward trend was well underway last year and improvements in the European economy have had a major effect according to EY experts, President Emmanuel Macron's reforms seem to have impressed investors, as has his marketing of France as a "startup nation".

But potential investors want more.

The business leaders said they would like to see taxes reduced further, simpler administration and cheaper labour.