A hotbed of innovation at the heart of Europe, France’s high levels of productivity and excellent quality of life make it an ideal destination for international businesses
With a highly skilled and productive workforce, as well as an increasingly welcoming business environment, France is ideally placed to attract international firms looking to take advantage of the European market.
“France is the most attractive country in Europe because it is a land of innovation,” says Mathieu Devillers, Head of International Business Advisory Services at Grant Thornton France. “We rank first in transportation and communication infrastructure, workforce training and productivity, entrepreneurial and creative dynamism, R&D spending and innovation capacity, as well as in financial services – particularly in private equity and venture capital, two segments that are essential to the financing of new technology companies.”
France has easy access to a European Union market of 500 million potential customers – all of whom can be reached within a two-hour flight. The world-famous French lifestyle is also an important factor in attracting companies from around the world, points out Vianney Martin, Director of the International Business Centre at Grant Thornton France.
France ranks highly in global comparisons of productivity, with a highly educated and skilled workforce as well as a number of leading technology clusters based in and around research institutions and universities across the country.
“In 2020, France became the number one host country for job-creating foreign investment in Europe and remains in first place for industrial and R&D projects,” explains Mathieu.
Recent data shows that France devotes 2.2% of its GDP to R&D spending, a proportion similar to that in Silicon Valley. “Our research tax credit is one of the most generous in Europe and 45% of eligible R&D expenditure is tax-deductible up to a value of €100m,” adds Vianney.
“On top of that, our market is structurally dynamic, due in particular to a more favourable demography than that of our European neighbours and because France offers significant childcare facilities that allow for a balance between private and professional life, thus favouring families and a good quality of life.”
Ongoing reforms introduced by the government are making France a simpler and more attractive place to do business in. “For expatriates, the government has lightened taxes on high incomes by abolishing the wealth tax and is proposing measures to promote the reinvestment of dividends,” says Mathieu. “Since 2015 and until the end of the first half of 2021, cost competitiveness has improved the most in France of all eurozone members. Taxation is also improving: the corporate tax rate, reduced to 28% in 2020, is now lower than in Germany.”
France also enjoys record low interest rates on business loans and corporate bonds, and the Global Competitiveness Report notes that the country scores well in terms of access to bank credit.
It is not all plain sailing, however. “Despite the simplifications that have come into force in recent years, the formalities involved in setting up a company remain very cumbersome,” adds Vianney.
Specialist help can help companies wishing to establish operations in the country, says Mathieu: “France welcomes foreign investors by providing them with organisations such as Business France and Choose Paris Region to help them set up a business, simplify their administrative procedures and find the right people to finance their projects. And as pro-business reforms continue, companies from around the world can increasingly be expected to seize the opportunity to set up in France in the years to come.
Access a world of resources, connections and expertise to help your international plans
Selling into, supplying or setting up operations in France can be a step into the unknown. At Grant Thornton, we have the experience to guide you. Our France International Business Centre director can co-ordinate access to international teams, resources and global delivery, while also helping you forge valuable trading relationships in the French market.