France tops European foreign investment ranking despite wider slowdown

With the announcement of 852 projects funded by foreign direct investment in 2025, France remains ahead of the United Kingdom and Germany in the 2026 European Attractiveness Survey by consultancy firm EY (formerly Ernst & Young).

Meanwhile overall investment is declining across Europe amid geopolitical tensions and weaker growth, and France's relative resilience does not fully offset the downward trend, according to the survey, published on Thursday.

Investment in France declined by 17 percent last year, with snap elections in 2024 and the resulting political uncertainty leaving investors wary, EY said.

Job creation linked to foreign investment fell by 4 percent – a smaller drop than the European average of 25 percent.

France continued to attract industrial investment, which accounted for 354 projects, or 42 percent of the total. Yet with volumes declining, new investment added a net gain of only 1,376 jobs.

Chinese investment in Europe hits seven-year high but rebound may be short-lived

Growth in AI, defence

A few strategic sectors – defence, artificial intelligence and low-carbon energy – showed growth across Europe. 

France attracted more foreign investment in AI than any other country surveyed, with projects rising by 26 percent year on year. Both OpenAI and Anthropic, two US leaders in AI, have opened offices in Paris in the past two years.

France is attracting a growing number of headquarters in general, with a 17 percent increase in 2025. 

It was also among the three countries – along with the UK and Ukraine – where defence investment was strongest. 

Perceptions of France remain broadly positive. According to the survey, the country is still considered Europe's most attractive destination by 38 percent of international executives, and 57 percent said they were considering investing in France in 2026.

But investors also flagged concerns over regulatory complexity, taxation and political stability.

AI showcase pays off for France, but US tech scepticism endures

Nicolas Forissier, France's Minister Delegate for Foreign Trade and Economic Attractiveness, attributed the performance to "strategic choices made over many years".

Pascal Cagni, chair of the board of directors at Business France, a public consultancy service that promotes foreign investment in France, hailed strong fundamentals and "nearly 10 years of pro-business reforms", while urging: "this leadership must now be boosted".

Business France's chief executive, Louis Margueritte, outlined the challenge: "In a more selective environment, our responsibility is clear: to convert this confidence into tangible investments that create jobs, sovereignty and sustainable growth."

(with newswires)