10 reasons to invest in France

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Griffin Bishop
5 years ago
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1 October reasons to invest in France IFA

2 Keys to understanding the new France 2 1 An economy with a global outlook Foreign companies employ over 2.8 million people in France at 23,000 different sites, including: France in the world: 5 th largest exporter of goods and 4 th largest exporter of services Over 30,000 sites in foreign countries belonging to French companies Source: IMF ,800 sites belonging to American companies, 4,500 to German companies, over 2,300 to British companies, another 2,300 to Dutch companies, and 600 to Japanese companies. (ORBIS, IFA 2009) Foreign companies in France account for: Over 40% of French exports (DGTPE 2009) Over 20% of R&D spending (OECD 2009)

3 Keys to understanding the new France 3 1a An economy with a global outlook In 2008, France was the 2 nd leading FDI recipient in the world, topping the list of European countries, with US $117.5 billion of inflows (UNCTAD, September 2009) Top 7 FDI recipients in the world, 2008 (US $bn) France was the 2 nd most popular destination in Europe in 2008 for the number of job-creating international investment projects In 2008, foreign companies made 640 decisions to invest in France Sources: Ernst & Young, June 2009 IFA Report, March 2009 United States France China UK Russia Spain Hong Kong Source: World Investment Report 2009, UNCTAD

4 Keys to understanding the new France 42 2 A dynamic market at the heart of Europe France is the 5 th largest economy in the world, and the 2 nd largest in Europe Germany $3,060 Top 8 economies in the European Union GDP in 2009 (current prices, US $bn) France $2,499 United Kingdom $2,007 $1,988 Italy Spain $1,397 Netherlands $743 Belgium $434 $403 Poland 64.3 million inhabitants 3 million companies 40 French companies among the world s leading 500 (Germany: 39; United Kingdom: 26) After Tokyo, but ahead of Beijing and New York, Paris hosts more head offices of Fortune Global 500 companies than any other city in the world. 79 million tourists Sources: INSEE 2009 Fortune Global 500 (2009) ORBIS August 2009 Source: International Monetary Fund, World Economic Outlook database, April 2009 (Estimates)

Keys to understanding the new France 5 3 Europe the world s largest market Top 4 single markets in the world GDP in 2009 (current prices, US $bn) 20 000 2008 18 000 16 000 $15,343 $14,003

5 Keys to understanding the new France 5 3 Europe the world s largest market Top 4 single markets in the world GDP in 2009 (current prices, US $bn) $15,343 $14, $4,993 $4, EU-27 United States Japan China Source: International Monetary Fund, World Economic Outlook database, April 2009 (Estimates)

Keys to understanding the new France 6 4 Rapid connections throughout Europe, North Africa and the Middle East France has superb transport infrastructure: European airport hub Paris Charles-de-Gaulle

6 Keys to understanding the new France 6 4 Rapid connections throughout Europe, North Africa and the Middle East France has superb transport infrastructure: European airport hub Paris Charles-de-Gaulle ranked 2 nd by passenger numbers and 1 st for cargo in Europe 2 ports in the European Top 10 by tonnage: Marseille (4 th ) and Le Havre (6 th ) in 2008 The longest high-speed rail network in Europe with 2,000km of lines and the highest number of international connections The 3 rd longest highway network in EU-27 countries (11,000km) and the 2 nd best road network in the world after Singapore Source: Paris Region Economic Development Agency, January Sources: ACI, July 2009 Port of Rotterdam UIC 2009 ERF 2009 / WEF 2009/2010

7 Keys to understanding the new France 7 5 Some of the most cost-effective locations in Europe According to KPMG, business setup and operating costs* are lower in France than in Germany, Italy, the UK and the Netherlands. 120 Cost index (Base: United States) *Cost components: Labor Facility costs Transport Utility costs (electricity, natural gas, telecommunications) Corporate tax Source: Competitive Alternatives, KPMG s Guide to International Business Location, Mexico - 1st Canada - 2nd United States - 3rd Australia - 4th France - 5th United Kingdom - 6th Netherlands - 7th Italy - 8th Japan - 9th Germany - 10th

8 Keys to understanding the new France 8 5a Some Some of the of the most most cost-effective locations in Europe France offers particularly attractive payroll, real estate and electricity costs compared to its leading Western European rivals. Electricity rates for manufacturers in 2008 ( /kwh inc. VAT) Gross payroll costs in 2008 (inc. all social security contributions, per year) Prime office rents in 2009 (m²/year) Germany: 0.13 UK: 0.12 GERMANY Director 187,380 R&D Engineer 62,710 Skilled Worker 41,665 London (centre): 988 Paris (centre): 720 France: 0.07 FRANCE 173,280 47,370 30,650 Frankfurt: 438 Consumption between 2,000 and 20,000 MWh Source: Eurostat, July 2009 UK 139,950 31,250 17,970 Lyon: 230 Source: fdi Benchmark/FT 2009 Source: Atisreal, Europe Quarterly 2009 T1

9 Keys to understanding the new France 9 6 One of the most productive workforces in the world France has the 3 rd most productive workforce in the world after Norway and the United States according to the International Labour Organization (2007, 2008, 2009), or Luxembourg and Norway according to the IMD (2009) France 48.9 Italy 48.4 Belgium Number of hours usually worked per week in 2008 Source: Eurostat, EFT Series, 2009 French managers work longer hours than their European counterparts 48.4 Spain 47.7 Germany EU-27 United Kingdom Netherlands Sweden Managers Active population Denmark Norway Japan Average number of working days lost every year to strike action* per 1000 inhabitants ( ) Sweden Netherlands Germany 3.7 France 5.84 United States United Kingdom Italy Spain Belgium * Excluding the public sector - Sources: IMD ILO

10 Keys to understanding the new France 10 7 A tax system which encourages investment Abolition of local business tax on productive investments as of January 1, 2010 A competitive French corporate tax system A favorable effective corporate tax rate*: - on R&D operations: France is ranked 2 nd, ahead of the United Kingdom (3 rd ) and Germany (7 th ); - on manufacturing operations: France is ranked 4 th, ahead of the UK (5 th ) and Germany (8 th ). * rate which takes into account the tax bases in different countries Source : KPMG, Competitive Alternatives, 2008 The most attractive Research Tax Credit in Europe Favorable tax regime for expatriates: exemption from income tax on up to 50% of total remuneration Boost for international cinema productions produced in France: 20% of production costs refunded in the form of a research tax credit or rebate Green taxation to support the growth of green business: - a sustainable development tax credit; an interest-free loan for household energy improvement works; - introduction in 2010 of a carbon tax to guide household and corporate consumption patterns towards clean energies, creating new markets for environmentally friendly products and promoting innovation.

11 Keys to understanding the new France 11 8 Innovation, innovation, innovation France s Research Tax Credit is the most attractive research and development tax incentive in Europe: 70 innovation clusters, stimulating shared public/ private research projects France ranked 5 th in the world and 2 nd in Europe for the number of international patents filed in 2008 Covers 50% of all R&D costs in the 1 st year, 40% in the 2 nd year and 30% in subsequent years up to 100 million, and 5% above this ceiling; Covers 60% of all R&D costs for work with public sector laboratories; No upper spending limit to the tax credit which is calculated on the annual volume of all R&D costs (salaries, social security contributions, operating expenses, depreciation, patents, etc.) Source: WIPO, January 2009 Sources: IFA

12 Keys to understanding the new France 12 9 IMF: France is on the move Investing and innovating for tomorrow s world Continuing reforms, and a recovery led by investment: 1000 stimulus plan projects worth 28 billion launched since late 2008 A sustainable capital: the Grand Paris project 750 foreign company establishments are members of France s innovation clusters, playing a full role in an innovation-rich future 460bn of investments being made by 2020 as part of France s Green New Deal 23% of France s energy consumption will be met by renewable energy by 2020 (vs. 10% in 2009) Green growth: France s Green New Deal, which opens the way to develop eco-buildings, renewable energies, green technologies and sustainable transport: 200 billion for household energy improvement works and energy-positive buildings Nuclear progress: a 2 nd EPR by 2012; the ITER nuclear fusion energy project, involving 34 countries and 10bn of investment Creating a dozen innovation clusters by 2010 specializing in green technologies Transport: CAREX-Cargo Rail Express project at Paris Charles de Gaulle airport

13 Keys to understanding the new France Renowned quality of life 79 million tourists in 2008, a huge number of international trade fairs, exhibitions and conferences Such high visitor numbers owe much to the quality of life in France, judged in 2009 by International Living magazine to be the best in the world for the 4 th year running. Top 5 of the 192 countries surveyed 9 criteria considered by International Living: Cost of living (15%) Culture & Leisure activities (10%) Economy (15%) Environment (10%) Freedom (10%) Health (10%) Infrastructure (10%) Security and Risks (10%) Climate (10%) Country France Switzerland United States Luxembourg Australia Rank (Overall score) 1 (80) 2 (79) 3 (78) 4 (77) 5 (76)

INVEST IN FRANCE AGENCY

France: Expect more Keys to understanding the new France 2 INVEST IN FRANCE AGENCY Launched by the French government in 2001 160 staff, HQ in Paris and 27 offices worldwide 3 tasks: - Project management: