The company produce French bread and patisserie on site
Over 100 new jobs are to be created at Llangefni on Anglesey when a French bakery relocates from Merseyside.
PV France, which produces French bread and patisseries, said it wanted to expand its business and had outgrown its current premises in Kirby.
The company said it chose Anglesey because of the good transport links to markets both in the UK and in Ireland.
The £1.2m investment is backed by the Welsh Assembly Government who said it showed confidence in the area.
Ieuan Wyn Jones, Minister for the Economy and Transport welcomed the announcement.
"Their decision to invest in Wales - particularly during this challenging economic period - demonstrates a high degree of confidence in what we can offer in Wales, both by way of a skilled and highly committed workforce and the right package of incentives," he said.
PV France's managing director, Patrick Fery, said the premises at Llangefni was ideal as it provided the company room to grow in the future.
"We chose to locate on Anglesey because of the very good transport links to our markets, including those in Ireland where we have important customers," he said.
"We also believe we can find the high quality workforce that we need to recruit," he added.
It is estimated that the market for authentic French bread and patisserie has grown by 60% percent in the UK over the past five years, and is now worth an estimated £2bn a year.
Nearly all the market is supplied by imports from France and Belgium.
PV France bakes the products on site. Its customers include Ryanair and Cafe Rouge.
The company is being helped by an assembly government single investment fund to lease and refit a 25,000 square foot factory at Bryn Cefni Business Park, Llangefni.
To begin with there will be 105 jobs, but future expansion plans to export products to Ireland and Sweden are expected to lead to the creation of more jobs in the future.