Reforms and the 2009 Report on job-creating foreign investment in France

Post by Invest in France Agency in L'investissement en France, Message from the Ambassador, Reforms; March 10, 2010

France’s inward investment results for 2009 were announced on March 9, 2010 by French Finance Minister Ms. Christine Lagarde and the Regional Development Minister, Mr. Michel Mercier: 639 job-creating foreign investment projects in France were decided upon last year, generating 29,889 jobs.

With project numbers higher than in 2007, and nearly as high as in 2008, the results offer a measure of France’s economic attractiveness in a period marked by a sharp decline in foreign investment flows throughout the world.

The global economic crisis has had a variety of effects on investment in France: 

  • “Long-term” investments from the United States and Japan in particular have slowed;
  • Conversely, regional strategies have benefited, with existing regular growth in projects from Germany, Italy, Spain, Switzerland and the Netherlands continuing in 2009;
  • Proof of this intra-European energy is that Germany in 2009 became the leading foreign investor in terms of job creation in France, ahead of the United States;
  • Promising growth was recorded in ‘green’ industries and in the energy sector.

 France’s policy of enhancing the country’s economic attractiveness, which has strengthened France’s hand in innovation-rich and high-value-added sectors, is paying dividends:

  • The number of foreign investments in R&D activities doubled in 2009. These projects are being attracted by France’s research tax credit and its innovation clusters, which already count 528 foreign companies among their members.
  • The “Grenelle laws” of France’s “Green New Deal” have ignited great interest from foreign investors; investment projects in the energy sector have doubled since 2007, while renewable energy projects tripled over the course of the last year (59 projects in 2009).
  • Despite stiff competition to attract projects involving decision-making centers, France attracted three times more company headquarters last year than in 2007.

These results owe much to the reforms which have been undertaken in the last three years. The continued pursuit of such reforms, in an unforgiving international environment, will determine France’s future competitiveness and the attractiveness of its regions.

David Appia

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Companies to gain from the abolition of the local business tax

Post by Invest in France Agency in Reforms; March 8, 2010

Tax relief of more than 20% on average

The abolition of the local business tax in the French government’s 2010 budget represents one of the most important tax reforms of recent years in France. Overall, businesses stand to gain significantly from this reform, as the current tax burden on companies established in France will be reduced by €6.3 billion (before the effect on corporate tax is taken into consideration). In 2010, the introductory year, these tax cuts will be even larger (€12.3 billion).

In practical terms, the cost to companies of making productive investments will be reduced by more than 20% on average for an investment made over 10 years. For industry, tax relief will amount to 32%, while for SMEs the benefits of this reform are even more tangible: companies with a turnover of less than €3 million will see their tax bill reduced by 50-60% (source: French Ministry for the Economy, Industry and Employment).

The end of taxation on productive investments

Since January 1, 2010, the local business tax has been replaced by the “local economic contribution” (Contribution Economique Territoriale – CET), in response to criticisms that the former local business tax penalized investment in real estate and movable property, which restrained productive investment.

Companies still contribute to the financing of local authorities, but taxation on productive investment, which used to account for 80% of the corporate tax base, has been abolished. 

International comparisons

France is not the only country where local authorities levy business taxes. In Europe, such taxes come in three forms:

  • Taxes based on property (rental value, monetary value, market value). This type of taxation is used in Ireland and Great Britain.
  • Local taxes imposed on companies according to different tax bases: profits in Germany; salaries in Austria; the business sector in Spain; value added in Italy; operating profit in Luxembourg.
  • National taxes apportioned according to various methods: this approach is used in nine European countries, including Germany, Austria, Finland, Italy and Poland.

Benoît Dambre, Partner, Taj, a member of Deloitte Touche Tohmatsu.

 

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“Expect More”: France exceeds the expectations of investors from emerging economies

Post by Invest in France Agency in Communication; February 24, 2010

The global economic crisis has confirmed what many had already suspected: the future driving forces of growth will be emerging economies like China, whose economy grew by 8.7% in 2009 (1). These new economic powers are increasingly investing outside their borders, yet statistics and opinion polls suggest that decision-makers in these markets do not perceive Europe or France as a source of business opportunities. Some even believe that it is more complicated to invest or do business on the “old continent” than in other locations, such as the United States, for example.

France Expect MoreAddressing these misconceptions about France’s business strengths is at the heart of the new campaign for 2010 launched by the Invest in France Agency (IFA) on February 18. “France: Expect More” will target a selection of the most promising emerging markets: China, India, Brazil, Turkey and the Middle East.

The goal of the campaign is to demonstrate to foreign business executives that France can exceed their expectations by offering them what it can do better than its rivals. International decision-makers will discover that France has a qualified, highly productive workforce, reliable transport and energy infrastructures, a strategic position at the heart of Europe, and an impressive industrial base as well as tax breaks supporting innovation.

And to convince these foreign entrepreneurs, what better than hearing what business leaders have to say from other companies who have already taken the plunge? The “France: Expect More” campaign will be publishing testimonials from Brazilian, Chinese, Indian and American decision-makers in leading newspapers and websites in target countries. They will explain how they came to set up business in this unknown country and how it has offered them much more than they ever imagined – energy, flexibility, creativity and plenty of added value!

(1) Source: Chinese National Office of Statistics

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Why are we launching a new promotional campaign?

Post by Invest in France Agency in Communication, Message from the Ambassador; February 18, 2010

I would like to take a look back at the press conference this morning where the Invest in France Agency’s new campaign to promote France’s attractiveness as an investment location was formally launched. The campaign will be rolled out this year in many countries around the world, specifically targeting the United States, China, India, Brazil, along with European and GCC countries.

France. Expect MoreWhy then are we launching this campaign? Our aims are threefold: to take full advantage of the growing number of investments from these countries or world regions which harbor such strong potential; to correct any outdated or misguided beliefs about doing business in France where they might exist; and to capitalize on the very positive image that France enjoys abroad, thanks to the numerous reforms undertaken in the last three years, where it is seen as a responsive, dynamic and innovative country.

The campaign’s slogan – “France: Expect more” – will carry a message, from San Francisco to Rio de Janeiro, from Bangalore to Dalian, to foreign businesses everywhere: France can offer you more than you might expect; more entrepreneurial spirit, more creativity, more opportunities and visibility to develop your projects in Europe.

To bear witness to this, ten foreign companies who have already invested in France will relate their experiences in the Wall Street Journal, Barrons, Valor Econômico, The Times of India and China Business News, among other titles. The digital part of the campaign will offer variations on these themes. Ogilvy has been chosen as our partner, and Invest in France offices are involved worldwide.

France’s economic attractiveness can ultimately be gauged by the number of decisions taken to invest in the country: a press conference is arranged for March 9, 2010 when the IFA’s 2009 Report on job-creating foreign direct investment in France shall be unveiled.

David Appia

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A look back at the World Economic Forum in Davos

Post by Invest in France Agency in Events, Message from the Ambassador; February 15, 2010

The World Economic Forum in Davos ended with a general consensus that although the worst of the global economic crisis is behind us, signs of recovery are fragile and collective action is still essential. The primary concern in 2010 is employment. According to Larry Summers, the United States is experiencing a “statistical recovery and a human recession.”

French Finance Minister Christine Lagarde was the keynote speaker at the Davos luncheon co-sponsored by the IFA and Deloitte

French Finance Minister Christine Lagarde was the keynote speaker at the Davos luncheon co-sponsored by the IFA and Deloitte

“Statistical recovery”? Certainly not for foreign direct investment (FDI). According to UNCTAD estimates, global FDI flows plunged 39% in 2009, following a 14% decline in 2008. Merger and acquisition activity appears to have taken an even harder hit, with a 66% decrease in 2009, after a 35% drop in 2008.

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Welcome to the IFA website and blog

Post by Invest in France Agency in Communication, Message from the Ambassador; February 15, 2010

This is the first occasion I have had to acknowledge the new IFA website going live a few weeks ago, which we hope you will find to be:

- clearer: the new site has been expressly redesigned with this in mind and has been supplemented by a new “Daily Motion – IFA” space, where videos featuring reaction and testimonials from foreign business executives are now hosted, along with IFA productions about France.

France is the #1 investment destination in Europe

France is the #1 investment destination in Europe

- more open: better links towards IFA partners, regional development agencies and innovation clusters in particular, offering even more insights into the diversity and wealth of France’s regions. 

- more welcoming: providing information to foreign businesses interested in France is obliging us to broaden the multilingual aspect of our website as new actors on the international investment scene grow in power and stature. In addition to English, German, Spanish, Chinese and Japanese, content will soon follow in other languages, such as Italian, Portuguese, Korean, Russian and Arabic.

- more interactive: this blog space is an invitation to exchange views about issues relating to international investment, France’s economic attractiveness and perceptions that foreign investors may have of the country.

I hope that all our readers enjoy using our new site, particularly those in Stockholm, where I was at the beginning of last week. Sweden is an important partner: over 700 dynamic and innovative Swedish companies are already doing business in France. More generally, Scandinavian countries have an enduring interest in our country, with over forty new investment projects in France given the go-ahead last year.

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France heads rankings for quality of life for the fourth year in a row

Post by Invest in France Agency in Life in France; February 12, 2010

For the fourth year in a row, France has been ranked first in International Living’s quality of life index, which aims to provide Americans with an idea of the best destinations for expatriates in the world. Besides its exceptional health services and low crime levels, France is praised for its cultural edge, in which the small things in life all add to France’s charm.
A country of exceptional beauty, its pristine streets, splendid architecture and charming cafés all contribute to the fine, distinctive aesthetic qualities that France as a country takes great pride in. What’s more, the very essence of life itself is to be savored according to the editor of the publication, who cites the relaxed and sociable attitude of the French as a great reason for living there – ordinary pleasures such as food and drink are to be enjoyed… slowly.

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Investment is central to France’s response to the global economic crisis

Post by Invest in France Agency in Message from the Ambassador; January 15, 2010
David Appia, Ambassador for International Investment, Chairman and CEO, Invest in France

David Appia, Ambassador for International Investment, Chairman and CEO, Invest in France

Investment is central to France’s response to the global economic crisis and the challenges of sustainable growth. France’s stimulus plan launched in late 2008 focused on a thousand projects to boost growth and competitiveness. The “national loan” bond issue decided upon in 2009 will allow €35 billion to be invested in university education and facilities, scientific and technological research, industrial policy, the digital economy, and sustainable development.

At the same time, investment is being supported in France by the series of reforms which have been initiated since 2007 to improve the competitiveness of the economy, including: the exemption of overtime hours from tax and social security contributions; the introduction of the “auto entrepreneur” regime; and the possibility of terminating work contracts by mutual consent, which have all helped to make the labor market more flexible.

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