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: strong support for foreign investors all along the project s life - Communications: «France: expect more» (global or sectorial seminars, public-private partnerships, testimonials, press trips) - Benchmarks and proposals: suggestions to the French government to enhance France attractiveness A network of regional partners throughout France
Keys to understanding the new France THE IFA INTERNATIONAL NETWORK IN 2010 3
Keys to understanding the new France 4 THE IFA WORKS WITH REGIONAL DEVELOPMENT AGENCIES THROUGHOUT FRANCE
Keys to understanding the new France 5 WHY CHOOSE FRANCE?
Keys to understanding the new France 6 THEY HAVE CHOSEN FRANCE AND BENEFIT FROM IT 22,600 foreign company sites in France Success stories of international companies in France: Royal Bank of Scotland, GSK, Kingfisher, Tate&Lyle, HSBC, Easyjet, BT, BAE Systems, Barclays, Hitachi, Canon, Tata Group-Corus Steel, Microsoft, Intel, Abott, Pfizer The 3rd largest FDI recipient in the world, topping the list of European countries, with US $65 billion of inflows (UNCTAD, 2010) 10 to 15 decisions taken every week by foreign companies to invest in France Foreign companies in France account for: over 40% of French exports (2009) over 20% of R&D spending (OECD, 2009) 750 foreign company sites belong to one of France s innovation clusters Approximately 1 in 7 French employees work for a foreign-owned company
Keys to understanding the new France 7 AN ATTRACTIVE LOCATION AT THE HEART OF EUROPE Excellent infrastructure European airport hub Paris Charlesde-Gaulle ranked 1 st for cargo traffic in Europe The largest high-speed rail network in Europe (2,000 km or 1,250 miles of lines) The 3 rd longest highway network in EU-27 countries (11,000 km or nearly 7,000 miles) ources: ACI, July 2009 - ERF 2009 / WEF 2009/2010 Sources: Ernst & Young (June 2009), IFA 2008 Report (March 2009), DGTPE (2008), Banque de France (2009)
Keys to understanding the new France 8 A COST-EFFECTIVE LOCATION IN EUROPE In 2008, electricity rates for manufacturers in France were very competitive 0.07/kWh-inc. VAT compared with 0.12/kWh in the UK and 0.13/kWh in Germany (Eurostat July 2009) According to KPMG, business setup and operating costs* are lower in France than in Germany, Italy, the UK or the Netherlands Cost index (Base: 100.00 United States) 120 100 80 60 40 20 0 Mexico - 1st Canada - 2nd United States - 3rd Australia - 4th France - 5th United Kingdom - 6th Netherlands - 7th Italy - 8th Japan - 9th Germany- 10th (Source : KPMG, Competitive Alternatives, 2008)
Keys to understanding the new France 9 FRANCE IS ON THE MOVE (IMF): MOBILITY AND FLEXIBILITY IN THE LABOR MARKET 3rd best hourly productivity in the world, after Norway and the USA (ILO: 2007, 2008, 2009) A more flexible labor market: Introduction of a mutual agreement procedure to terminate contracts between an employer and an employee (over 160,000 applications since 2008 Since 2008, employers and employees have had more freedom to negotiat working hours at company level French managers work longer hours than their European counterparts 51 49 47 45 49,7 48,9 48,4 48,4 47,7 47,1 45,9 45,1 Managers Active population 43,6 43 41 39 40,2 39,2 37 35 France Italy Belgium Spain Germany EU-27 United Kingdom Netherlands Sweden Denmark Norway Number of hours usually worked by week in 2008 Source: Eurostat, EFT Series, 2009
Keys to understanding the new France 10 FRANCE IS ON THE MOVE (IMF): REFORMED TAX REGIME TO BOOST AND SUPPORT INVESTMENT * Cost components: - Labor - Facility costs - Transport - Utility costs (electricity, natural gas, telecommunications) - Corporate tax A competitive tax environment: A favorable effective corporate tax rate (which takes into account different tax bases in different countries), especially for: * R&D operations: France ranked 2 nd after the US, with a negative effective tax rate of -25.7%, thanks to the research tax credit, compared with -13.8% for the United Kingdom and 33.5% for Germany (which does not offer tax credits but does grant subsidies) * manufacturing operations: France ranked 4 th after Mexico with an effective tax rate of 30.2%, Canada and the US, compared with 30.9% for the United Kingdom (5th) and 37.8% for Germany (8th) Abolition of local business tax on productive investments as of January 1, 2010 Green taxation to reorient household and business consumption patterns towards clean energies and technologies: over 40 measures, passed into law in 2008, to encourage environmentally friendly behavior (notably tax breaks for companies when they contribute to environmental protection and sustainable development) A favorable tax regime for expatriates: exemption from income tax on up to 50% of total remuneration and possible exemption from paying social security retirement contributions
Keys to understanding the new France 11 FRANCE MEANS INNOVATION 71 innovation clusters stimulating public/private research projects Research Tax Credit: France offers the most attractive research and development tax credit in Europe: 50% of R&D expenditure spending in the first year, 40% in the second year and 30 % in subsequent year up to 100 millions OSEO: the innovation one-stop-shop, in partnership with Invest in France Agency
Keys to understanding the new France 12 INVESTING IN THE FUTURE The Economic Stimulus Plan 1) Support for private investment ( 11.5 billion): In early 2009, the French government accelerated the Treasury s reimbursements of corporate tax claims (research and VAT tax credits) Since January 1, 2010, the local business tax on productive investments has been abolished ( 12.3 billion in 2010, 6.3 billion per year thereafter) 2) Increased public investment ( 10.5 billion): A 4 billion increase in direct government investment in strategic areas (infrastructure, higher education and research, and defense-related industries) A 4 billion increase in investment in major companies in which the government holds an ownership stake (EDF, GDFSuez, RATP, SNCF, La Poste) will help modernize and develop rail and energy infrastructures and postal services A 2.5 billion for investments made by local authorities
Keys to understanding the new France 13 INVESTING IN THE FUTURE National bond to invest in the future: 35 billion to be invested in 5 strategic funding areas: 1. Higher education and training ( 11 billion) 2. Research ( 8 billion): research facilities ( 1 billion) and laboratories of excellence ( 1 billion); research in the vital fields of biotechnology and nanotechnology ( 850 million set aside to create university hospital institutes) 3. Industrial policy and SMEs ( 6.5 billion): 2 billion to preserve and boost the competitiveness of the aerospace, 1 billion for the automotive, rail and shipbuilding industries, 2.5 billion have been earmarked for SME development (start up etc.) 4. Digital economy ( 4.5 billion) A digital economy fund will equip France with a very-high- speed broadband network 5. Sustainable development ( 5 billion) Green growth : France s Green New Deal, building on the success of the Grenelle Environment Round Table Talks, has opened the way for the development of green buildings, renewable energies, green technologies and sustainable transport Renewable energy will meet 23% of France s energy needs by 2020 (vs. 10% in 2009) A potential of 400 billion of public-private investment by 2020 (Source : Commissariat général au Développement durable, December 2008) Creation of nearly a dozen innovation clusters dedicated to green technologies by 2010
HOW CAN WE HELP? Keys to understanding the new France 14
Keys to understanding the new France 15 THE LONDON OFFICE AT YOUR SERVICE
Keys to understanding the new France 16 HOW CAN WE HELP YOU? We can help your project succeed in France by providing: Information and expertise: - We can help investors to identify the best investment opportunities - We can offer expert advice on any issues concerning regulation in France: taxation, employment law, residence permits, etc. A«tailor-made» support: - A step-by-step approach for project management, all along the project s cycle - With our regional partners, we can help investors to find the best site for the investment project - We offer long-term support to investors, providing a one-stop-shop for companies as they seek to contact different areas of government and local authorities
Keys to understanding the new France 17 WE HOPE TO SEE YOU SOON! CONTACT Fabrice Etienvre, CEO Invest in France UK and Ireland fetienvre@investinfrance.org Julien Ravalais Casanova Director of Communications jravalaiscasanova@investinfrance.org