Foreign investment plays an important role in the market economy of China. System construction is the most important point of reform and opening up in the new era, which can influence the location choice of foreign investment. Previous studies tend to study the relationship between the formal system and foreign investment, but rarely mention the effect of the informal system of social trust on foreign investment. Therefore, based on CGSS data from 2010 to 2015, this paper establishes social trust indicators for 26 provinces, takes the marketization index as the formal system, constructs a spatial panel model and a spatial GMM model, and aims to study the impact of social trust on foreign investment location choice and the substitution effect of social trust on the formal system. The results show that both social trust and marketization degree have a promoting effect on local and foreign investment, and the substitution effect of social trust on marketization degree is confirmed by adding cross terms. In addition, by introducing spatial weight, it is found that social trust and marketization degree have negative spatial spillover effects on neighboring areas by influencing local and foreign investment. This result can provide a reference for the sustainable and steady introduction of foreign investment in China.