Foreign investment flows between neighbouring France and Germany are usually considerable, but did Covid-19 cause them to dip? (Photo by Bildagentur Zoonar GmbH/Shutterstock)

In 2020, Germany received 1,567 greenfield FDI projects, while there were 624 projects recorded into France, according to GlobalData’s FDI Projects Database.

The number of projects into Germany grew sharply, increasing by 16% from 2019. During the same period, the number of greenfield FDI projects into France grew by an even larger proportion (18%).

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German outbound FDI into France

Germany-based companies created 85 projects in France in 2020. This represented a 70% increase compared with 2019.

Nominally, Germany-based companies primarily invested in logistics, renewable and alternative power, and software and IT services sectors in France. Combined, these three sectors accounted for 36% of total German outbound FDI projects destined for France in 2020.

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Proportionally, France received a larger share of German outbound FDI in medical devices (30% of total German outbound FDI in the sector), construction materials (29%) and healthcare (25%) sectors.

Top Germany-based investors in France included Deutsche Post, Dieter Schwarz Stiftung and Siemens. Combined, these companies accounted for 13% of total project flows in 2019–20.

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In terms of total German outbound FDI projects, France ranked as the second-largest recipient country in 2020. It was the seventh-largest recipient in 2019.

Germany-based companies primarily established operations in the Ile-de-France region, which contains capital city Paris. In fact, 37% of projects into France by German companies were located there in 2020. Grand Est and Nouvelle-Aquitaine were the next most popular subnational destinations.

French outbound FDI into Germany

France-based companies created 70 projects in Germany in 2020. The number of projects fell by 4.1% compared with 2019.

Software and IT services, business and professional services, and industrial machinery, equipment and tools were the top sectors in which French companies invested in Germany. Combined, these three sectors accounted for 41% of total French outbound FDI projects destined for Germany in 2020.

Top France-based investors in Germany included Ubisoft Entertainment, Capgemini and Decathlon. Combined, these companies accounted for 7% of the total number of French-headquartered projects established in Germany in 2019–20. Germany ranked as the second-largest recipient country of French outbound FDI in 2020. It was the third-largest recipient in 2019.

France-based companies primarily established operations in Baden-Wurttemberg, which is home to the city of Stuttgart. In 2020, 34% of all French outbound projects destined for Germany were created in Baden-Wurttemberg. Hessen and Bavaria were the next most popular subnational destinations.