France is rich in culture and tradition, and with its combination of historic beauty and modern thinking makes it one of the top travel destinations in the world.
France is also a hotbed of research and innovation, offering foreign investors open access to a large domestic market, a competitive business and tax environment, and a highly skilled, productive workforce, as evidenced by the 20,000 foreign companies that are already doing business there.
The French government is committed to fostering the development of foreign companies by promoting a stable, investment-friendly legal framework in which enterprise can thrive.
France continues to provide strong support for innovation, in spite of current budgetary pressures, offering the best research tax credit in Europe, funding collaborative research in a nationwide network of innovation clusters, and supporting SMEs and new companies through the creation of a new state investment bank.
France is committed to drive growth, and a business location at the heart of Europe that attracts nearly 700 new foreign investments every year.
France is a dynamic, competitive global economy at the heart of Europe – the world’s largest consumer market where access to Europe, Africa and the Middle East is a given.
France is Europe’s second largest economy and the fifth largest in the world. It is Europe’s second largest consumer market, with 65 million inhabitants.
France is the world’s leading tourist destination, with 83 million visitors.
With its overseas territories, France’s influence extends to all of the world’s oceans; it has the second largest exclusive economic zone (11 million sq. km.) after the United States, and shares a border with Brazil (French Guiana).
World-class industrial sectors
· France is Europe’s largest aerospace and nuclear industries.
· France is Europe’s second largest agri-food and chemical industries.
· France is Europe’s third largest ICT and pharmaceutical sectors.
· Of the worlds' top 500 companies, 31 are French.
· 12 French companies or institutions are among the 100 most innovative organisations in the world.
France - Location and Connectivity
France is committed to innovation and excellence
Innovation and R&D are important drivers for a sustainable economy. France has not only stayed resilient during a difficult European economic period, but has continued to embrace innovation as the country’s key to a dynamic and attractive future.
France’s commitment to innovation is illustrated by a number of incentives for businesses, most notably the best research tax credit system in Europe. This sets France apart from its European counterparts and confirms its position as an innovation leader. For investors, France’s world-class research tax credit system has a number of very real business advantages. These include:
- A research tax credit rate applied to the annual volume of all eligible R&D expenditures (salaries, social security contributions, running costs, depreciation, patents, etc.)
- A research tax credit rate doubled for R&D carried out with public-sector bodies and quadrupled for R&D undertaken by junior final-year doctoral and post-doctoral research personnel in their first two years of employment
The status of “Innovative New Company” (Jeune Entreprise Innovante – JEI) allows small sized firms conducting R&D projects to receive tax breaks and pay lower social security contributions for highly qualified jobs such as engineers and researchers.
France also offers R&D operations other significant advantages that go beyond tax initiatives. These include: A highly skilled and educated workforce including more researchers per 1,000 employees than in Germany or the UK.
France has invested in public-sector research organizations with 71 ground-breaking innovation clusters, 18 of which are world-class. In 2011, the French government earmarked €3.5 billion in additional funding for these clusters.
“Operation Campus,” a €5 billion university modernization program to make French universities more autonomous and open to business by cultivating centres of excellence and raising their international profiles.
Outstanding public-sector research networks
France’s Specialized Networks for Advanced Research brings together geographically tight clusters of research centres with a critical mass of leading researchers working toward common scientific goals.
Active government support for investors through the National Investment Programme
The French government plays a proactive role in anticipating and securing France’s future. Its “National Investment Programme”, launched in 2010, draws from a €35 billion state funded budget to enhance the competitiveness of the French economy in five strategic areas:
- Higher education and training (€11 billion)
- Research (€7.9 billion)
- SMEs and the industrial sector (€6.5 billion)
- Sustainable development (€5.1 billion)
- Digital economy (€4.5 billion)
Industry Sectors and Clusters
France boasts 71 innovation clusters. These catalysts for R&D enable public-sector R&D centres and educational institutions that work with private companies to exploit synergies and develop collaborative innovation projects. 18 of the French cluster are seen as world-class and are highlighted below.
In 2011, more than 9,200 companies belonged to innovative clusters, of which more than 600 were foreign-owned firms. In 2011, more than 2,500 collaborative R&D projects were undertaken throughout the innovation cluster network.
Approximately 40% of scientific output in France comes from international research partnerships.
The National Research Agency supports research projects undertaken jointly by public-sector laboratories and private companies. OSEO, the main provider of aid to innovative SMEs, and the Inter-ministerial Fund (FUI) both allocate funds to R&D projects carried out by innovation clusters.
World class business clusters in France include:
Images and Networks:
Combining know how with research and development into the fields of telecoms, the internet, Digital 3D, virtual reality and augmented reality images. Headquartered in Lannion in the Côtes-d’Armor the cluster hosts some 25 large companies, 170 SMEs and 25 laboratories and schools.
Marine and Maritime Technologies :
Centred in Brest, in the area known as Brittany Marine the cluster focus is diverse but based around :
- Maritime security and safety
- Naval and nautical activities
- Marine, fossil and renewable energy resources
- Marine biotechnologies
- Fisheries and aquaculture
- Environment and coastal development
The cluster boasts 55 major companies including 9 foreign businesses, 163 SMEs and 57 academic or research centres of excellence.
Aerospace and Embedded Systems
The Aerospace Valley World Competitiveness Cluster allies the Midi-Pyrenees & Aquitaine regions to constitute Europe’s leading pool of jobs in the field of aeronautics, space and embedded systems:
- 130,000 industrial jobs
- 1,600 establishments
- 1/3 of France’s workforce in aeronautics, and over 50% in the space sector
- 8,500 researchers
- 2 of France’s 3 prestigious aeronautics and space engineering schools
PACA Marine - Maritime safety/security and sustainable development
Centred near Toulon this region hosts 67 major businesses, 124 SMEs and 77 research and training institutions. The main focus of the cluster is:
• Maritime security and safety including naval and nautical issues.
• Marine energy resources.
• Marine biological resources.
• Environment and coastal development.
Lyonbiopole – Centre for excellence in vaccine and disease diagnosis and prevention
Headquartered in Lyon
Finance Innovation Cluster
Finance Innovation is a global business and research cluster dedicated to financial services; a wide-scope initiative of the Paris financial marketplace, banks, insurance companies, asset management firms, consulting firms, service providers to financial institutions, universities, and research centres. Its goal is to draw upon the strengths of the Paris financial marketplace in order to create new high added value industrial and research projects to increase the market share of the French financial services industry in the European and international competition.
Mov’eo – Automotive Cluster
A real focus on safety and the environment for the automotive sector.
A cluster in automobile and public transport R&D, Mov’eo works on collaborative and innovative projects which reinforce international competitiveness for French businesses on the continent and overseas. The cluster is based in the Lower and Upper Normandy and Greater Parisian area (Ile-de-France). This territory represents more than 70% of R&D in the French automobile sector.
Végépolys – A competitive cluster focused on the plant world.
The cluster brings together companies involved directly and indirectly in plant growing with trade associations, unions, and development bodies as well as local chambers of trade and commerce.
Its goal is to become a world reference for innovation in the world of plants.
- Fruit & vegetable growing
- Wine growing
- Medicinal and aromatic plants
- Plant breeding
- Plant protection and cropping system
- Plants for health, well-being and human environment
The Paris based cluster for businesses engaged in digital content and aligned services. The cluster has 700 members made up of innovative SMEs but also major universities, higher education establishments, research labs, and corporations focused on a specific technology-driven industry.
“World class” French Cluster, Systematic brings together more than 650 key players in the Paris Region area. Each of them work in the field of software-dominant systems with a strong societal dimension.
- The Systematic Cluster has developed 379 R&D projects, an investment of €1,97 Billion including €703 Million funded by the French Government, its agencies (National Research Agency and OSEO) and from the Paris Regional local governments.
- Cooperation between SMEs, Large Companies, Research Centres and higher educational establishments
- Systematic, an association supported by local authorities, economic development agencies, the French Government and its partners.
Medicen Paris Région - A cluster for innovative therapies and advanced technologies in healthcare
Axelera - A cluster for Chemistry and the environment centred in Lyon and Rhône-Alpes
Excellence in global terms on five strategic themes, making it possible to specify technological solutions to answer the environmental and social challenges of tomorrow:
- chemistry and the environment serving application markets
- protecting natural areas
- recycling, and the recyclability of materials
- green chemistry
- the factory of the future
SCS (Secure Communications Solutions)
Based in Sophia Antipoli-Rousset (near Marseilles) this cluster is engaged in Information and communication technology sciences (microelectronics, telecommunications, software and multimedia)
The i-Trans competitiveness cluster, operating under the aegis of the Transports Terrestres Promotion Northern France association, brings together industry leaders and key players in industry, research and education related to rail, automotive, logistics and intelligent transport systems in Northern France.
Together, they aim at build international recognition for Northern France as a unique focus of excellence and innovation in surface transport in and around Lille.
A truly European centre and cluster based in the Alsace, the Alsace Biovalley is home to a unique concentration of international life sciences & healthcare players. As a French world-class cluster dedicated to therapeutic innovations, Alsace BioValley is well-known for any R&D in drug development and medical technologies.
IAR (Biomass) - Industrial and Agri Resources (IAR) Converting plant products for non-food use
- Bioenergies: converting biomass for “heat-electricity” cogeneration, biogas, second-generation agri-fuels, pyrogasification, etc.
- Biomaterials: bio-polymers, bio-composites and agri-materials for application in the building and transport sectors: automotive, rail, aeronautics, etc.
- Biocompounds: chemical intermediates, biolubricants, ‘green’ glues and detergents, etc.
- Plant and active ingredients: production auxiliaries, nutraceuticals, cosmetics
This cluster is made up of about 50 major companies that includes 10 foreign businesses and 20 centres of excellence.
Minalogic (Nanotechnologies, Embedded software)
Located in Grenoble, France, the cluster focuses on the development and production of intelligent miniaturized services for industry.
Minalogic has staked out a position as global leader in intelligent miniaturized solutions, a unique hybrid of micro and nanotechnologies and software, from fundamental research to technology transfer.
EAU (Water cycle quality management)
The water cluster based in Montpellier has been funded by the French Government and regional authorities. It associates research centres, educational organizations and companies from southern French regions including, Midi-Pyrénées, Languedoc-Roussillon and Provence-Alpes-Côte d’Azur to create value through projects in the water sector.
Whilst the main French clusters have been listed there are a vast range of Poles d’Exellence in the country and some of those sectors are named below:
Forestry, laser technology, renewable energy, microwave technology, agriculture, mechanical engineering, nuclear technologies, ceramics, mechatronics, food, cosmetics, pharmaceuticals, energy, health, seafood and aquaculture.
France is at the heart of the world’s leading economic region, the Eurozone.
- The combined GDP of the European Union’s 28 Member States exceeds that of the United States; the European Single Market boasts more than 500 million consumers with high purchasing power.
- In 2012, the European Union received US$258.5 billion in foreign direct investment inflows, significantly higher than the United States (US$167.6 billion).
- Technological power, with one and a half million researchers.
- While the European Union spends less on R&D as a percentage of GDP than the United States or Japan, European companies file a similar number of triadic patents (giving protection in Europe, North America and Japan).
- A Europe that is committed to deeper economic and monetary union and to reducing government deficits.
- A €120 billion growth pact was adopted by the European Council in June 2012.
Paris one of the euro zone’s leading financial centres
- Dynamic stock and bond markets: Euronext is Europe’s second largest stock market by equity trading value, with almost €2,000 billion traded in 2012. The French bond market accounts for 35% of euro-denominated corporate bond issues in Europe.
- Paris is the leading investment centre in continental Europe, and the second largest in the world for investment funds (after the United States) with more than €2,600 billion of assets under management.
- A sound, well-diversified banking sector: four French banks among the 10 largest in Europe.
- Leading insurance companies in Europe are in Paris: turnover of more than €200 billion and more than 1,880 billion of investment in the French economy.
- Paris is Europe’s second largest private equity industry (after London) with finance for more than 1,500 SMEs in 2012.
- Paris is the leading location in Europe for multinational firms, ahead of London and Frankfurt, while international investors are well represented in French financial markets, accounting for 40% of market capitalization.
The country is particularly advanced in championing green technologies, renewable energies and hybrid cars.
To boost innovation and encourage investment in green technologies and companies, the French government recently made available:
- Tax credits or deductions for “green” companies working in the field of sustainable development.
- Financial aid for properties being adapted to help protect the environment
As part of its drive to be even more competitive and to encourage innovation in the digital economy, the French government has allocated a part of the “National Investment Program” to this sector, which will be spent as follows:
- €2 billion for internet infrastructure (e.g. larger mobile bandwidth, fiber optics, satellite-related solutions) to cover 100% of the country by 2025.
- €2.25 billion to support innovation in digital applications and businesses.
- €250 million to develop smart grids.
France attracts investment due to its thriving regional economies supported by regional economic development agencies. Each region has specific characteristics and skillsets that attract international investment across a wide range of sectors.
Every day in 2012, two new foreign companies decided to invest in France, joining more than 20,000 foreign companies already doing business here. In fact, France is among the three largest FDI recipients in the world after the USA and Sweden.
In 2011, France was the number one destination for foreign investment in industry in Ernst & Young’s European attractiveness rankings, putting it ahead of the U.S., Germany and Japan.
New investors are following in sound footsteps: France boasts 32 of the world’s 500 largest companies (32 are German and 26 are British).
France is a well-established place to do business. It is the second largest economic power in the European Union, the fifth largest economy in the world, the sixth largest exporter of goods and the fifth largest exporter of services. It is also highly competitive in the following business sectors:
- Number one in Europe in the aerospace and nuclear sectors.
- Number two in Europe in the chemical industry and agri-food sectors.
- Third largest in the information and communications technology (ICT) and pharmaceutical sectors
- Green technologies and the digital economy.
France: an open and attractive economy
A long history of inward foreign investment
Foreign companies have been setting up business in France since as far back as the 19th century. Since then, more and more foreign companies from 132 countries have established themselves in France in every sector. Examples include Generali (Italy) in 1832, JP Morgan (United States) in 1868, Solvay (Belgium) in 1872,Cina (Switzerland) in 1876, Mitsui & Co (Japan) in 1878 and Bosch (Germany) in 1899.
Since 1999, Toyota has invested more than €900 million in its Valenciennes plant (northern France).
Disneyland Paris, established in the heart of Europe in 1992, has welcomed more than 265 million visitors since it opened.
- France is the leading recipient of foreign inward investment in industry.
- France has the fifth largest FDI stock in the world.
- The top two source countries for job-creating freign investment in France are the United States and Germany. In 2012, 156 American companies and 113 Germany companies chose to come to France.
- There are more than 20,000 foreign-owned companies doing business in France.
• They represent a significant number of large corporates (32% of all companies in France with more than 5,000 employees) and mid-size companies (28% of such companies in France with between 250 and 5,000 employees are subsidiaries of foreign companies).
•While they account for only one percent of the total number of companies in France, foreign companies established in the country employ nearly 1.8 million people (i.e. 13% of the employed population), generate one-third of all French exports and undertake 29% of all business enterprise R&D expenditure (BERD) in France.
The 50 largest foreign groups established in France together employ nearly 500,000 people.
There are 20 foreign companies in France with more than 10,000 employees each, including Fiat, General Electric, Volvo Trucks, the Walt Disney Company, United Technologies, Kingfisher and ISS.
The French government is more committed than ever to continuing to reform the country’s legal and tax environment to boost business. Significant strides have been made in improving and modernizing regulations in this area.
For example, administrative formalities have been streamlined considerably and regulations have been improved. The lead time to set up a business in France is now among the shortest in the world; a company can be registered online in a matter of hours.
France is business-friendly and cost-effective
The lead time to set up a business in France is now among the shortest in the world; a company can be registered online in a matter of hours. A new contract termination procedure known as the “rupture conventionnelle” has been introduced to allow contracts to be terminated by mutual consent.
Entrepreneurs are enthusiastically welcomed in France and major strides have been made in recent years to encourage innovation and creative enterprise. Innovation lies at the heart of France’s focus in this area and the country has solidly supported entrepreneurial spirit in a number of ways, including:
- Costs for starting a business can now be deducted from the taxable revenue of the director of a new company.
- Modernization of venture capital instruments and creation of funds for placements of venture capital.
- A €100 million state investment fund, “France Brevets” (patents), has been created, targeting mainly SMEs, to help them establish wide portfolios of intellectual property rights and market the resulting inventions.
- Introduction of the simplified “auto-entrepreneur” status for independent workers.
- The launch of a public investment bank to support entrepreneurial spirit in France. Its objective is to offer diverse finance programs to small businesses at different stages of development.
France is a champion of business start-ups and innovative enterprise spirit.
A leading destination for foreign talent and investment
As a preferred destination for foreign direct investment, France has adapted its regulations to streamline procedures for incoming foreign talent and expertise.
In the last 10 years, France has attracted 6,500 new foreign investments, generating 300,000 jobs.
This trend showed little sign of waning in 2012, as France’s regional economic development agencies and the IFA recorded a total of 693 job-creating investment decisions made by foreign companies.
This figure, in line with the 2011 total, is one of the three best results in the last 10 years. These new investments will create or maintain nearly 26,000 jobs.
The French government’s “National Pact for Growth, Competitiveness and Employment” unveiled in November 2012, along with the labour market agreement established in January 2013 between employer federations and trade unions, have both served to illustrate France’s drive and international outlook.
At the same time, the government’s statement on January 9, 2013 concerning France’s investment attractiveness called for a national effort to bring the number of job-creating foreign investments received every year to 1,000 by 2017.
The 2012 Report sheds light on this ambition, providing an insightful overview of France’s key economic strengths and the importance of attracting these investments. It reminds us that foreign companies operating in France employ nearly two million people, are responsible for one-third of French exports and make a major contribution to business enterprise research.
It also highlights how American companies continued to choose France as the location for new job-creating investments in 2012, consolidating the United States’ position as France’s leading foreign investor.
The continual importance of Europe, responsible for 60% of foreign investment projects, is also underlined, as well as the growing share of foreign investors from emerging economies, which now account for 8% of all projects.
Multi-year residence permits in France facilitating international transfers
• The Skills and Expertise residence permit. ("carte competences et talents"): A three-year renewable residence permit for foreign nationals appointed as executives of subsidiaries in France. Accompanying family members are issued with a "Private and Family Life"residence permit (carte de sejour "vie privee at familiale") also valid for three years.
• "Expatriate Employee residence permit (carte de sejour "salarie en mission"): This three-year renewable residence permit is specifically designed for intra-group job transfers (contract under French law or assignment). Accompanying family members are issued with a multi-year "Private and Family Life" residence permit.
• The European Union Blue Card: This three-year residence permit is reserved for highly qualified employees (who have completed at least three years’ higher education or have five years’ professional experience and whose gross pay is at least €4,300 a month). Anyone holding an EU Blue Card issued by a European Union Member State may apply for a similar permit from another Member State after 18 months. The French Immigration and Citizenship Office (OFII) acts as a single contact point for holders of "Expatriate Employee", "Skills and Expertise"and "European Union Blue Card" residence permits in the following eight départements: Paris, Hauts-de-Seine, Yvelines, Rhône, Haute-Garonne, Isère, Nord and Puy-de-Dôme.
- The OFII acts as the single contact point for employers regarding all immigration formalities (work permits, medical examinations and issuance of residence permits).
Other initiatives for visas in France
• For short-term assignments: foreign companies that regularly assign their employees to work in their French subsidiaries can apply for a 12 month work permit together with a short-stay visa allowing for multiple entries during that same period. This visa and work permit allow for one three-month stay in France for professional reasons in each six month period.
• For long stays certain categories of foreign nationals, such as students and temporary workers, are issued long-stay visias that act as residence permits, valid for between three and 12 months. These foreign nationals are exempted from having to apply to the Préfecture for a residence permit covering their first year in France.
• Students holding a qualification at least equivalent to a master’s degree may, once their "student temporary" residence permit expires, be eligible for a six-month temporary residence permit allowing them to work in a job related to their studies in France. They may also apply for “employee” status once their "student residence permit" expires.
France is highly productive and has a talented workforce
France’s commitment to innovation and securing its long-term future relies on a world-class talent pool and high productivity levels to drive new business and foster growth. These are crucial advantages France offers to foreign investors. According to the Organization for Economic Cooperation and Development (OECD), France is the leading European country for investment and education, spending 6.3% of gross domestic product (GDP) on education, more than the OECD average of 6.0%. It is also first in Europe for the number of higher education graduates in science and technology.
The high level of education in France is renowned
Three of the country’s top business schools, HEC Paris, INSEAD and ESCP Europe, made the Financial Times’ top 10 rankings of European business schools in 2012. It therefore makes sense that out of 392 higher education institutions with the most former students now in executive positions at Fortune Global 500 companies, 25 were French.
Despite clichés of a laidback Gallic workforce, Eurostat 2012 confirmed that French skilled employees work 44.6 hours per week in average – 4.2% more than EU-27 average (42.8 hours per week in average).
Located at the centre of the European Single Market of more than 500 million consumers, France offers investors a strategic springboard into Europe, the Middle East and Africa.
It is the largest country in Europe and has established relations and historical ties with a number of countries. For example, France plays a significant role in Africa, especially in its former colonies, through extensive aid programs, commercial activities and cultural impact.
Due to its geographical location, France is highly attractive for logistics activity. It holds the top spot for foreign investment in logistics in Europe according to Ernst & Young’s European attractiveness rankings. This is further enhanced by the country’s world-class infrastructure of extensive high-speed road and rail networks, major ports and airports.
- Easy and quick access to neighbouring countries, with key destinations within a 1,250-mile radius of Paris.
- Paris-Charles de Gaulle Airport is ranked second in Europe for passenger numbers and for cargo in Europe.
- Two French ports were included in the European top 10 by tonnage in 2011: Marseille (fifth) and Le Havre (eighth).
- Second largest high-speed rail network in Europe, with 1,178 miles of dedicated high-speed lines.
- One of the largest motorway networks in Europe, covering more than 6,835 miles.
France enjoys outstanding connectivity. It is one of the highest users of electronic communications in Europe: The high-speed Internet penetration rate was 35.9% in 2011. The high-speed and very high-speed Internet market sectors are expanding rapidly with 23.9 million subscribers in the fourth quarter of 2012.
France with € 37.7 billion was ranked ahead Germany (€ 30 billion), the Netherlands (€ 9 billion), Italy (€ 8 billion), Denmark (€ 4.9 billion) and Belgium (€ 1.2 billion) for online sales in 2011.
France for Expatriates
France ranks third in Europe and fifth in the world for providing an efficient health infrastructure to meet society’s needs. This positions the country well ahead of Germany (12th), and the UK (25th).
France offers many attractive expatriate benefits to foreign investors considering investing in and moving their families to France. These include:
- Multi-year residence permits facilitating international transfers.
- Tax exemption on income earned outside France.
- Employees on intra-group transfers or who are directly recruited abroad, directors and certain non-salaried personnel may claim exemption from income tax on up to 50% of their total income.
- Exemption from paying wealth tax (ISF) on assets or estates held outside France for five years
- Reduction in capital gains tax through a tax exemption of 50% on income from “passive” sources such as dividends, interest and fees and capital gains on the sale of foreign equities.
Operating costs are lower than in most European countries, as well as in the U.S. and Japan. For example: France boasts the most competitive electricity rates in Europe. According to Eurostat, electricity rates for manufacturers in 2012 were €0.0809/kWh (excluding VAT) in France, compared with €0.0895/kWh (excluding VAT) in Germany and €0.1097/kWh (excluding VAT) in the UK.
Water rates in Paris are cheaper than in Frankfurt, Brussels, or Amsterdam.
Commercial real estate is broadly cheaper in Paris than in London.
The wealth and variety of French culture and the excellence of France’s health and education systems make it a leading destination for international investment and an attractive proposition for expatriates. It is one of the top two places in Europe for quality of life, according to the International Living survey in 2011.
France has no fewer than 306 schools offering international programmes in a wide range of major European and world languages. France is an ideal host country offering a first-class lifestyle.
France is the world’s most popular tourist destination, with an estimated 79.5 million tourist arrivals in 2011.
Regrettably cricket is not a major sporting pastime in France.
Invest in France
Tel: +33 1 40 74 73 19
Invest In France Agency
The IFA is the national agency responsible for promoting and facilitating international investment in France. It also coordinates initiatives to promote France’s economic attractiveness.
The IFA network operates worldwide, with offices in France, North and South America, Europe, the Middle East and Asia. In France, the IFA works in partnership with regional development agencies to offer international investors outstanding business opportunities and customized services.