COUNTRY PROFILES
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COUNTRY PROFILE
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France |
Print articleThe world’s fifth-largest economy, attracting one of the largest FDI inflows of anywhere in the world, France welcomes investors and offers a wide range of incentives to companies looking to set up or expand operations. In recent years, France has seen a slower rate of growth — it is currently around 1.6%, performing well below its estimated potential of 2.3%. Tensions over unemployment and the government’s plans to reduce it mean that foreign investments leading to job creation would be particularly warmly welcomed.
“France’s attractiveness as a business location is now a priority of the government’s economic policy,” says Claire Gaymard, president of the Invest in France Agency.
 The traditional — vineyards in Champagne |
Market size and location
Not only does France offer one of the largest, most sophisticated — and highest-earning — direct markets in Europe, it is also extremely well-placed both geographically and politically for export to the wealthy EU market. Road and rail infrastructure is excellent, and with major ports on both the north coast, giving access to the Baltic and North Sea, and the Mediterranean, access to both Asian and American supply lines is readily available.
Industry sectors
Agriculture retains a role in French society, but this is a post-industrial economy where the industrial sector is heavily outweighed by services, with French companies playing a leading role in asset management, banking and insurance markets.
 And the modern – offices at La Defense, Paris |
However, there are still important manufacturing areas, and a vibrant hightech sector. There are a number of automotive clusters spread around the country, and some of the world’s most advanced aerospace development and manufacturing is carried out in France. Other key sectors include chemicals, energy, computer services, telecommunications, logistics, and a wide range of service offerings, including R&D in a number of sectors.
In May 2005, the French government announced an initiative to promote France as a location for companies involved in the health industries. A variety of incentives are being made available for companies investing in this area, together with improved access to a wide range of resources for those involved in pharmaceutical and biochemical production.
Taxation
Corporate income tax is relatively high at 33%, but tax breaks are available for SMEs. Full repatriation of profits is possible, and France has a tax treaty with the United States which sets the withholding tax rate at 5%. In addition, the Invest in France agency claims that depreciation rules are particularly favourable. There are significant tax exemptions for companies involved in R&D, especially, “young, innovative companies”, and for those investing in certain regions.
Setting up a business
The World Bank rates France 44th in its ease of doing business index. According to the index, setting up a business is relatively straightforward — on this basis, France came 13th out of 103 countries, with the average cost and time needed to start a business well below the OECD average. However, it is relatively complex to close a business, resulting in France’s lower position overall.
Compared with other countries, hiring and firing procedures were also complex. Productivity is high, despite France’s famously rigid working hours — in fact, productivity per hour is amongst the highest in Europe, at 116.7 against an EU index of 100, and a US score of 113.9.
Facts in brief
France’s location is Western Europe, bordering the Bay of Biscay and English Channel, between Belgium and Spain, southeast of the UK ; bordering the Mediterranean Sea, between Italy and Spain
Its climate is generally cool winters and mild summers, but mild winters and hot summers along the Mediterranean; occasional strong, cold, dry, north-to-north-westerly wind known as mistral
Natural resources include coal, iron ore, bauxite, zinc, uranium, antimony, arsenic, potash, feldspar, fluorospar, gypsum, timber, fish
Agricultural products are wheat, cereals, sugar beets, potatoes, wine grapes; beef, dairy products; fish
Industries include machinery, chemicals, automobiles, metallurgy, aircraft, electronics, textiles, food processing, tourism
France has a civil law system with indigenous concepts; review of administrative but not legislative acts
Diplomatic representation in the US — Chief of mission: Ambassador Jean-David Levitte
Diplomatic representation from the US — Chief of mission: Ambassador Craig R Stapleton
Contact Information
American Chamber of
Commerce in France
156 Boulevard Haussmann
75008 Paris
France
Tel: +331 5643 4567
E-mail: amchamfrance@amchamfrance.org
Website: www.amchamfrance.org
Useful websites
| www.amb-usa.fr | US Embassy in France |
| www.insee.fr/en | National Institute of Statistics |
| www.apce.com | Business Start-up Agency |
| www.investinfrance.org | Investment Promotion Agency |
| www.travail.gouv.fr | Ministry of employment |
| www.pricoarelocation.com | Private company offering relocation advice |
| www.franceguide.com | Tourism and travel |