Country GuideFrance

From Global Connections

France is the world's 19th most attractive country for foreign direct investment (FDI) according to the World Investment Report 2015 published by the UNCTAD. While this represents a drop from 11th place in 2014, FDI inflow to France doubled between 2014 and 2015, from USD15 billion to USD44 billion.

France ranked 27th in the World Bank's 2016 Doing Business rankings, retaining the same position as the year prior. The country was ranked first in the world for ease of Trading Across Borders. Furthermore, notable improvements came from France's efforts to make paying taxes less costly for companies by introducing a credit against corporate income tax and reducing labour tax rates paid by employers.

Key facts about starting a business in France:

  • It takes five procedures and approximately four days to start a new business in France; this process is detailed in the Doing Business in chapter
  • Obtaining a work permit can take up to six months to process and costs up to EUR241; employment regulations are discussed in detail in the Labour chapter
  • Obtaining a building permit takes approximately 90 days and costs EUR42,751
  • France ranked eighth in a comparison of 36 countries' intellectual property systems that assesses cost, speed, quality of judges/tribunals, quality of advice and the fairness and predictability of decisions; intellectual property rights are discussed in the Legal overview chapter
  • Companies applying for a listing on the stock exchange must, amongst other requirements, demonstrate a three year trading history; this is discussed further in the Finance chapter

While establishing a business and investing in France is generally a transparent process, it is important to understand the nuances of any local regime. The manner in which people conduct business in France may differ from the home countries of investors. Furthermore, variations on these distinctions may exist in different regions of France and the industry in which a company operates.

French is the lingua franca of business, with over 88 per cent of the population speaking it as their first language. Dress codes in the workplace are typically understated and stylish; the French place high importance on appearance. However, business dress standards will vary according to industry.

A handshake is the typical business greeting and will be used at the beginning and end of a meeting. However, friends or close acquaintances may greet each other by lightly kissing on the cheeks. Gift giving is not common as part of French business etiquette.

Those looking to establish a business in France will often look to countries across Europe as alternative options. While membership of the EU ensures parity in many aspects of the legal, Tax and Audit regimes, France can be differentiated on the following factors:

  • France is the second largest market in Europe, with more than 65 million inhabitants
  • Paris is the world's second largest host to multinational headquarters, after Tokyo
  • France’s research tax credit is the most attractive tax incentive program of its kind in Europe: a tax break amounting to 30 per cent of annual R&D expenses, up to EUR100 million, and five per cent above this threshold
  • The French government’s “Responsibility and Solidarity Pact” means that labour costs will be reduced by €30 billion by 2016
  • France was ranked first in the world for ease of Trading Across Borders which looks at time and costs of importing and exporting in the country; this is discussed further in the Trade chapter
  • France ranked seventh in the world for its transport infrastructure: the third highest ranking of a European country, behind the Netherlands and Spain; details of France's transport system are outlined in the Infrastructure section

Despite France's economy growing at its fastest pace in four years, with an increase of 1.1 per cent in 2015, the unemployment level reached a new record of 3.59 million in December 2015. Francois Hollande, the French president, has declared that the country is in 'a state of economic emergency' under the record unemployment levels. Many have attributed France's problems to its strict and rigid labour laws and state that problems will continue until radical reforms are enacted.

This guide has been developed to provide businesses with an overview of France, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in France. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.

Please note that the Country Guides may only be available in English.

Useful Links

1 Company Register
2 Tax Administration
3 Data Protection Authority
4 French Customs
5 Federal Office of Immigration and Integration/
6 French Patent Office
7 Business France / Invest
8 Ministry of Labour, Family and Social Affairs

 

Sources

1 FDI Statistics
2 Doing Business Rankings
3 Work Permit – Used Practical Law which is a legal service Grant Thornton subscribes to
4 IP Index
5 France Inhabitants
6 Second largest host to multinational headquarters
7 Reduction in labour costs
8 France unemployment levels

 

Download Country Guide - France (4MB, PDF)

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This document is issued by HSBC Bank plc. (the Bank). This guide is a joint project with Grant Thornton. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. Whilst every care has been taken in preparing this document, the Bank and Grant Thornton makes no guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or Grant Thornton be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and are subject to change without notice. The materials contained in this document were assembled in January 2016 and were based on the law enforceable and information available at that time.

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