FDI in figures

France ranks third in the world in attracting Foreign Direct Investments. Paris is the second city in the world, after Tokyo, in terms of establishment of multinational headquarters. It has about 500. Nevertheless, the country showed a decline in foreign investment due to the deterioration of the international economic situation. There was less foreign capital in the economy, in 2009.

Like the rest of the world, it seems that France's ability to attact FDI will slow down following the global financial crisis. In effect, France will suffer from the global economic paralysis by receiving markedly less FDI. 

Why you should choose to invest in France

Strong points

France is one of the world's ten economic powers. It has quality infrastructures. The work force is qualified and productive (second in Europe in terms of hourly productivity). France is an innovative country with an highly developed tertiary fabric.

Weak points

The drawbacks of the French market are: one of the highest taxation rates in the world, significant manpower costs, low competitiveness in some sectors which can hinder the economies of scale. Research suffers from insufficient collaboration between the public and private sectors.

Government measures to motivate or restrict FDI

Foreign companies enjoy the same government aid as French companies (aid for productive investment, R&D, professional training, job creation, etc.). The number of administrative formalities for foreign companies to settle in France has been reduced.

 

To fight against the financial crisis, the French government has implemented different mesures: the financing of 1,000 projects which would be financed by the economy relaunch plan. These investments bear on transport infrastructures, higher education and research, State real property, housing and urban redevelopment and also health. Additionally, Sarkozy's government has abolished the professional tax in order to permanantly stimulate investment. Furthermore, the government established a strategic investment fund of euro 20 billion, in Autumn 2008. Its aim: to buy stakes in industrial companies whose development is essential to the French economy.

Bilateral investment conventions signed by France

France has signed bilateral agreements on investments with 81 countries.
To see the list of countries, click here.
To see the conventions, click here.

Procedures relative to foreign investment

Freedom of establishment

Yes

Acquisition of holdings

Possible
When more than 5% of the capital or voting rights of a company listed on the stock exchange are likely to change holders, it is compulsory to inform the Financial Market Authority (within 5 days) and the issuing company (within 15 days).

Obligation to declare

For any acquisition of over 10% of the capital or voting rights of a French company: declaration for statistical purposes to the credit institutions.
For any creation or acquisition of more than one third of the capital or voting rights, when the investment is over 1.5 million euros: administrative declaration to the Ministry of Finance (Directorate-General of the Treasury and Economic Policy).

Competent organization for the declaration

Directorate of the Treasury and Economic Policy of the Ministry of Finance

Requests for specific authorizations

Some sectors are subject to procedures to obtain prior authorization: games for money; private security; research and development activities on pathogenic or toxic agents; phone-tapping systems; information technologies; information systems security; goods and technologies with a dual use; means of cryptology in the digital economy; companies holding national defense secrets; the arms trade; companies which have concluded a contract with the Ministry of Defense.

Finding assistance for further information

Investment aid agency

The French Agency for international investments (AFII)
The Fund for the Development of SMIs
OSEO, Financing and support for SMEs

Other useful resources

Report of the AFII
The heading devoted to business opportunities of the AFII
Report on foreign direct investment in France, AFII, 2006