Foreign investment is widely seen as a key driver of economic growth, innovation and job creation. When companies open new sites, build factories or establish research centres, they not only bring capital into a country but often create jobs and strengthen local supply chains.
As a result, the competition to attract international investors has intensified. Governments use investment incentives, tax breaks and international investment forums to persuade companies to choose their markets.
France, too, has made attracting foreign investment a key priority in recent years. Since 2018, the government has promoted the country through its “Choose France” initiative.
At this year’s summit, President Emmanuel Macron said foreign companies had pledged investments worth €93 billion, which the Élysée Palace described as a record figure.
But how successful are European countries in attracting international investors? Which nations are drawing the most investment projects?
France remains Europe’s top investment destination
To measure the competition for international investors, the EY Europe Attractiveness Survey offers a useful benchmark. Unlike traditional foreign direct investment (FDI) statistics, which can be distorted by large transactions or intra-company financial flows, the survey tracks the number of individual investment projects.
These include new projects announced or registered by foreign companies in a given year, such as the opening of new facilities, the construction of production sites, or the expansion of existing operations.
According to the latest edition of the survey, 5,026 new investment projects were announced across Europe in 2025, with EY defining Europe as a geographical region rather than the European Union. The figure was down 7% from 2024 and marked the lowest level in 11 years.
Despite a sharp decline, France retained its position as Europe’s leading destination for foreign investment. The number of projects fell by 17% to 852 in 2025, representing the largest drop among Europe’s major investment destinations.
The United Kingdom ranked second with 730 projects, down 14% from the previous year.
Germany remained Europe’s third-largest destination for foreign investment, with 548 projects. However, the total fell by 10%, reaching its lowest level since 2009.
The long-term trend is even more striking. Compared with 2019, the number of investment projects in Germany has dropped by 44%, a significantly steeper decline than in France (-28%) or the United Kingdom (-34%).
Among the strongest performers in 2025 were Spain and Turkey. Spain increased its number of investment projects by 20% to 383, moving into fourth place. Turkey followed closely with 376 projects, up 7%, ranking fifth.
Poland continued its upward trend, recording 285 investment projects in 2025, a 10% increase from a year earlier. This made it the sixth-largest destination for foreign investment in Europe. The Netherlands was also among the few countries to post growth, with projects increasing by 8% to 159.
Italy, Belgium and Portugal also saw investment activity decline. The number of projects fell by 8% to 206 in Italy and by 11% to 187 in Belgium, while Portugal recorded 186 projects, down 5% from a year earlier.
Who is investing in Europe?
The United States remained the largest source of foreign investment projects in Europe in 2025. American companies announced 943 projects across the continent, retaining their position as Europe’s leading external investor.
German firms ranked second despite a sharp decline in their investment activity abroad. In 2025, they announced 484 investment projects in other European countries, down 24% from the previous year. The drop was unusually steep, as the number of projects had typically exceeded 600 in recent years.
Despite the decline, Germany remained Europe’s largest intra-European investor. France was once again the leading destination for German investment, attracting 101 projects. Turkey ranked second for the first time, ahead of the United Kingdom.
Europe also loses ground globally
To put Europe’s performance into a global perspective, it is worth looking at foreign direct investment (FDI) flows. According to UNCTAD’s World Investment Report 2025, global FDI fell to around $1.49 trillion in 2024, down 11% from the previous year.
Europe was hit particularly hard. According to UNCTAD, the region attracted around $182 billion in foreign direct investment in 2024, compared with $439 billion a year earlier, a decline of 58%.
North America ranked second with $343 billion in FDI inflows, up 23% year-on-year. Asia remained the world’s largest destination for international capital, attracting $605 billion despite a modest decline of 3%.
But these figures come with an important methodological caveat. UNCTAD excludes so-called “conduit economies” such as Luxembourg, the Netherlands and Ireland to avoid distortions from holding-company structures and intra-group financial transactions.
Why investors are becoming more cautious
According to EY, weak economic growth across much of Europe has been a key factor behind the decline in investment activity. High energy prices, geopolitical uncertainty and a more cautious corporate investment climate have also weighed on business decisions.
Trade tensions and concerns over potential new tariffs are adding further pressure to investment plans.
Many investors are increasingly concerned about Europe’s combination of relatively high costs and subdued growth prospects. EY also points to growing frustration with regulatory complexity across the continent.