5 Reasons to Develop Your Business in France
Many companies are intrigued by the idea of expanding their business's operations overseas but are unsure where to begin. Expanding to France is an excellent way for American companies to "dip their toes" in the waters of international commerce for a variety of reasons:
Friendly to international business
France is the third investor in the world behind the USA. France is in business with its European partners: 70%.
A competitive, qualified and productive work force
France has the second highest productivity per industrial worker in the world. The French work force is adaptable and creative thanks to a high level of training and education.
A high tech country supporting research and development
Half of European R&D centers are located in France. The R&D industry is one of the most important in Europe, and the tax laws are favorable to the setting-up of R&D centers. France is particularly well known in electronics (smart cards), transportation (the TGV), and precision managing of the electronic spectrum (optoelectronics, under sea electronics).
A very competitive initial set-up cost
Compared to other European countries, France has cheap and abundant energy and very competitive and developed telecommunications.
International transportation platform
France benefits from a complete and efficient infrastructure thanks to its fast and wide spread rail system, its excellent roads and highway networks, as well as its constantly developing airports.
France’s New Working Permit
Do you want to work in France? Set up a business rapidly? Ask for the new residence permit: The “Competences and talents” card. The French Government is committed to helping entrepreneurs and highly-skilled workers of all nationalities to set up and develop their business in France.
In order to facilitate your stay, new rules have been introduced.
The renewable “Competences and talents” card enables you to carry out a professional activity in France in connection with your project. It can be issued to any foreign national who, by means of their skills and expertise, is likely to contribute in a significant and sustainable manner to the economic development or the intellectual, scientific or cultural achievements of France. The “Competences and talents” card is issued for a 3-year period (which can be extended) and constitutes a valid work permit and/or authorization to register a new business.
France's Industrial Activities
Concerning industrial activity in the European economy, France is third immediately behind Germany and the United Kingdom. Eastern Europe, Near East and Mideast and Africa represent about 80% of the industrial exchanges. Eight active sectors dominate the economy.
The automobile industry:
In 2004, French car makers produced worldwide 5.93 million units and French sales represents 15% of world sales. The French car makers, whose presence is very strong in Europe, plan to conquer emerging countries' markets by setting up in Brazil or China.
Michelin is the world leader in tire production. Saint-Gobain holds the same position in the production of glass and is the second largest exporter. France is 4th in the world concerning the plastics industry, which count 4000 companies.
Construction and Public Works:
The construction sector turnover reached 137 billion Euros in 2004 thanks to the construction of new housing: 300,000 building sites opened, a 16% increase related to 2003. This sector employs about 294 000 companies and 1.3 million workers.
France’s high bandwidth internet access is third in Europe (6.1 billion internet access). In France, 48 million people own a mobile phone for private use, which corresponds to 69% of the French population. Alcatel is the world leader in undersea cable networks. The new information and communication technologies sector represents a share of 11% in the turnover of the French industry.
EADS European group (European Aeronautic, Defense and Space Company), as a result of the merger of French Aérospatial Matra, German DaimlerChrysler Aerospace and Spanish CASA, is ranked third in the world. Arianespace, which belongs to EADS group, is the world leader of the space transportation.
With a turnover of 124 billion Euros in 2004, this sector is the leading French industry. The 3,180 businesses in the sector employ 396,400 people (third French employer).
The Chemical Industry:
This sector employs 231,424 people with a turnover of 95.6 billion Euros. In 2004, this sector was the 1st exporter (except agro business and energy). France was the second European producer and the third world exporter of chemical and pharmaceuticals products.
Luxury goods and fashion:
This sector generates a turnover of 43.7 billion euros. With the world leader, l’Oréal, and many other well known companies in the field, France is the first exporter in the world of fragrances and cosmetics, dominating 35% of the market.
Nowadays, the industrial structure is characterized by the predominance of SMIs (enterprises of 20 to 499 employees). In 2004, they constituted 96% of the companies and employed 40% of the industrial workforce. They represented 16% of the exports.
Agriculture and Fisheries
French agricultural production, with a value of approximately 57.5 billion euros in 2004, is the first producer in the European Union. France’s share of the European production is nearly 23%, whereas the German and Italian shares are 15% of the European total.
France is the first European producer of cereals, sugar beet, cattle, poultry and wine. It is also the first exporter in the world of processed foods.
In 2003, 875,200 people declared being actively engaged in agriculture as part-time or full-time workers. The agro business sector, generally composed by SMEs is the second employer of the country. In the world, France is the second exporter behind the USA.
According to Ofimer (national interprofessional office of sea products and aquaculture), the turnover of maritime fisheries exceeded 1.7 billion euros corresponding to a production of 854,600 tons of fish, crustaceans and other sea foods. France, like its European partners, suffers a structural commercial deficit as production does not meet national demand as a result of the reduction in the catch.
Finance and Banking:
In 2000, the merger of the stock exchange markets of Amsterdam, Brussels, and Paris (stocks and by-products) gave birth to Euronext, the first stock exchange market in Europe.
In 2002, the latter grew larger by merging with the Portuguese stock exchange market for stocks and by-products (Bolsa de Valores de Lisboa e Porto) and by purchasing LIFFE (the London by-products exchange market). Euronext was viewed as a solution to the globalization of the markets, but also to offer more liquidities to investors and lower transactions costs.
In 2004, Euronext was the first European stock exchange concerning the volume of stocks exchanged (1.570 billion euros). This year Euronext announced their union with NYSE (the New York Stock Exchange) to create the larger stock exchange market in the world. This merger will be effective early 2007. The main banks are BNP-Parisbas, Société Générale, Crédit Agricole and Banque Populaire.
This sector is ranked fifth in the world with a turnover of 158 billion Euros in 2004. The sector counts about 600 companies and employs 200,000 workers. Axa, second European insurance company, CNP and AGF are the three leading French insurance companies.
It generates important income. France is the most visited country in the world with 75.1 million tourists in 2004. The commercial surplus in this sector exceeds 34 billion Euros. Tourism represents 6.5% of the GDP.
Workforce and Competitiveness
The quality of the workforce represents one of the most important factors in terms of competitiveness in a global economy. In France, this quality is largely due to the high level of qualification. To reach such a high level of competence, the educational expenditures reached 111.3 billion Euros or 7.1% of GDP in 2003, 18.9 billion euros were dedicated to the post graduate education. In 2004, there were 2,268,400 students, which means 59,400 more than the previous year.
The GDP per employee in French private business is 51,500 US$ ahead of the United Kingdom (50,900), Germany (42,700) and Spain (35,500) according to the World Competitiveness Yearbook 2002.
Research and Development
National spending in 2004 on research and development reached 34.58 billion euros, 2.2% of the GDP (Gross Domestic Product) – which places France in third position amongst the countries of the OECD. The Government objective for 2010 is to increase the R&D budget to 3% of the GDP.
The public sector, that is in charge of the running of the main national research centers, contribute 46.5%. 53.5% comes from companies who focus on high technology sectors (Automotive, Telecoms, Pharmaceutical, Aeronautic, and Chemical).
In 2003, France had 346,000 researchers and full-time workers.
In 2004, 17,300 patents were registered in France. Between 2004 and 2005, the number of registrations increased of 2.9%. The highest number of registrations come from the automotive sector with Renault (first place with 607 patents) and Peugeot-Citroen (third place with 386 patents), L’Oreal reached the second place with 525 patents.
R&D centers benefit from a favorable tax status. The recent set up of 400 research centers for international companies is proof of the interest they generate for the “Technopole” network and the science parks. Currently half of all European research centers are based in France.