New investments by foreign businesses in France fell sharply in 2013, contrasting with significant pickups in Germany and Spain, an indication of the scale of the challenge facing President François Hollande as he reaches out to business to help spark growth.

Releasing its first estimates for 2013 Tuesday, the United Nations Conference on Trade and Development said that while foreign investment in the European Union increased from 2012, inflows to France fell by 77% to $5.7 billion, extending a decline that began with the 2008...