10 Reasons Why You Should Setup a Business in France

Are you thinking of setting up a business in France? Here are ten reasons why you should start a business in France, a country with access to the European Union market of 450 million consumers.

Are you considering expanding your business internationally? Amidst the many global options, France stands out as an appealing choice for entrepreneurs looking to grow. France, a member of the European Union and the Eurozone, is the world’s seventh-largest economy by nominal GDP and the ninth-largest economy by PPP. Setting up your business in the heart of Europe could be a significant turning point for your company. 

Curious about what makes France so attractive? Let us highlight ten compelling reasons that make France an exceptionally enticing destination for your business ventures.

Investment-Friendly Environment

France’s investment-friendly climate has earned it a prominent position on the global stage. With one of the largest markets in Europe and seamless access to the European single market, it offers an array of opportunities for businesses looking to expand their horizons.

One key aspect of France’s investment-friendly climate is its taxation system, which includes various tax reliefs and incentives to attract foreign investors. One such incentive is the Research Tax Credit (CIR), which allows companies to claim tax credits for their research and development expenditures. This credit covers up to 30% of eligible R&D expenses, making France an attractive destination for companies looking to innovate.

Additionally, France offers a competitive corporate tax rate. France’s standard corporate income tax rate was 33.33%, which was set to decrease to 25% by 2022 for most companies. Furthermore, plans were to reduce the corporate tax rate to 24% by 2023.

France introduced the Young Innovative Company (JEI) status for startups and innovative companies, which provides significant tax exemptions. JEIs can benefit from a complete corporate income tax exemption for the first three years and a 50% exemption for the next two years.

France also has a network of double taxation treaties with numerous countries, reducing the tax burden on international businesses operating in the country.

The French government has also launched initiatives to encourage foreign investment, such as the “Choose France” campaign, which promotes France as a prime destination for foreign investors and businesses.

A Worldwide Economic Power

France stands proudly as a global economic powerhouse, wielding considerable influence on the international stage. With a formidable GDP of $3.124 trillion, it occupies the prestigious rank of the seventh-largest economy in the world, according to data from the International Monetary Fund. This impressive economic stature is underpinned by a diverse and dynamic array of industries and sectors contributing significantly to the nation’s financial strength.

France’s membership in the Euro Zone further solidifies its role as a critical player in the global economy. As part of this prosperous economic bloc, the country benefits from a shared currency, the Euro, which facilitates trade, investment, and economic stability among its member states. This regional collaboration enhances France’s economic resilience and bolsters its position as a global financial center.

Furthermore, France boasts a vibrant and innovative business landscape. Paris, its capital, is a renowned global hub for finance, technology, fashion, and culture. The country is home to numerous multinational corporations, including leaders in aerospace, automotive, luxury goods, and pharmaceuticals. 

The European Union Connections and Access to The Rest of the World

France’s strategic positioning as a critical member of the European Union (EU) has profound implications for its business connections both within the EU and globally. President Emmanuel Macron’s proactive role in the EU and the declining influence of other leaders like Angela Merkel underscores France’s increasing significance in shaping EU policies.

One significant opportunity for France arises from the United Kingdom’s departure from the EU. With the UK’s exit, many British businesses have chosen to establish their EU bases in France, bolstering the country’s economic ties with the UK and providing a gateway for British companies to access the EU market.

The EU, as a whole, offers numerous advantages to its members. Membership in the Schengen zone facilitates the free movement of people and goods, enabling businesses to tap into a diverse talent pool and engage in seamless trade within Europe, free from tariffs and restrictions. Moreover, EU member countries benefit from comprehensive trade agreements and the stability afforded by the single currency, the Euro. The single point of contact for Value Added Tax (VAT) further simplifies cross-border transactions, making it more convenient for businesses to operate across EU borders.

A Well-Educated and Productive Workforce 

France has an abundant supply of young generations eager to carry on the legacy of economic progress. This youthful, energetic workforce advantages from a successful educational system, distinctive talents in science and engineering, and outstanding technical craft competence.

In terms of production, the French outperform the rest of the world. France has one of the world’s highest hourly productivity rates, with results that are 20% higher than the European average.

One of the reasons the French are so efficient is their exceptionally high standard of education: education and training account for 7% of France’s GDP. The French educational system is open and cost-free to everybody. Its goal is to offer the corporate world personnel who can quickly adjust to competitiveness restrictions.

France’s legal system is a modern and growth-oriented framework that fosters a business-friendly environment. This progressive approach is evident in various aspects of the legal landscape, making it an attractive destination for entrepreneurs and businesses seeking to thrive. One notable feature of the French legal system is its emphasis on streamlining procedures. 

Moreover, France offers a wide range of contract options and work arrangements that are fully recognized and valid. This flexibility allows entrepreneurs to tailor their business structures to suit their needs while providing employees diverse career development opportunities.

In the French workplace, there is a strong focus on employee well-being and growth. Retention strategies, talent development programs, and robust health and safety standards underscore the commitment to creating a conducive environment for employers and employees. The relationship between workers, their representatives, and employers is designed to be constructive and collaborative, fostering a positive atmosphere that encourages innovation and productivity.

Quality of Life

France has a generally good quality of life, but it might be difficult to understand the country’s dialect. France ranks first in terms of health and well-being. Only 19% find it challenging to live there without knowing French. Childcare and education are both reasonably priced.

In the Better Life Index, France outperforms other countries in various well-being parameters. France beats the rest of the world regarding work-life balance, safety, social ties, and civic participation. These evaluations are based on available facts.

R & D and Innovation

France has demonstrated a strong commitment to fostering innovation and research and development (R&D) in recent years, positioning itself as a leader in various technology-driven sectors. The government’s substantial investments in R&D initiatives have driven economic growth and technological advancement.

In 2020, France allocated approximately €25 billion to R&D, which accounted for 2.35% of its GDP. This financial commitment is a testament to France’s dedication to innovation as it strives to raise R&D spending to 3% of GDP by 2030. The country’s consistent increase in R&D investment demonstrates its determination to compete globally in innovation-driven industries.

France’s proactive approach is evident in its numerous R&D programs and incentives. Initiatives like the French Tech Visa, which simplifies visa procedures for foreign tech talent, and the French Tech Seed Fund, which supports early-stage startups, encourage innovation and entrepreneurship.

The Technological Ecosystem

In the 2022 Global Innovation Index, France was ranked 12th among technologically advanced countries. It has now become Europe’s second most significant tech hub, with Paris ranking second only to London in technology advancements and surpassing Berlin. France has given rise to several successful tech unicorns, including BlaBlaCar, Deezer, and Vestiaire Collective.

Paris, often referred to as the “City of Light,” has excelled in art and photography and diversified its industries, leading to substantial growth. France significantly emphasizes technological progress in the transportation sector, exemplified by innovations such as the supersonic Concorde and high-speed rail systems.

France is renowned for its nuclear energy capabilities and its contributions to innovative technology through internal combustion engines. It is the first nation to launch a satellite into space and has continued to play a vital role in the European Space Agency. The country boasts a wealth of prestigious universities with research laboratories and technological institutes.

Travel and Tourism

Tourism plays a significant role in the French economy, accounting for nearly 8% of the GDP and providing employment opportunities for around 2 million people directly and indirectly. Furthermore, it serves as a valuable soft power asset on the global stage, with France maintaining its position as the world’s top tourist destination for several years. As of 2023, France’s travel and tourism market is projected to reach a value of $19.69 billion.

The Food Industry

France is a prominent pillar of its national economy, renowned for its excellence and innovative spirit. French cuisine, whether found in a cozy home kitchen or at the world’s finest dining establishments, is celebrated for its commitment to using fresh, seasonal ingredients. The projected size of the French service market in 2023 is approximately 71.16 billion USD, with expectations of soaring to 104.08 billion USD by 2029, marking a steady compound annual growth rate of 6.54% over the forecast period (2023-2029). 

France also plays a significant role in the global processed food export market, as evidenced by its 2020 exports, which totaled US$53 billion. However, this figure experienced a modest 2.5% dip from 2019.

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Final thoughts about France

Thank you for reading this article. You can continue to explore our articles about France in our Blog or access some other articles about French Education and Housing, how to start a Business and Statistics, Finance and Travel Business. If you need services related to company formations, nominee services, banking or payment processing services, please get in touch, and we will introduce you to our trusted partners.

Useful resources for France

  • Economie.gouv.fr – Ministry of the Economy website with information to support businesses
  • Chamber of Commerce and Industry (CCI) – includes guidelines for opening a business as a foreigner in France and setting up a foreign company in France
  • La French Tech – Official website of the start-up scene in France
  • Formalités Entreprises – a one-stop shop for creating, modifying, and closing a business in France
  • Institut national de la propriété industrielle (INPI) – online guide to creating your company name, brand, logo, and protecting your intellectual property
  • Les-aides.fr – Chamber of Commerce and Industry platform with listings of business grants, loans, business support structures, and a calendar of related events and contacts

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