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Doing Business in France

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Doing Business in France is prepared by U.S. Embassy Staff in France once a year and contains information on Doing Business in France.

As the world’s fifth largest economy, centrally located within the European Union, there is strong competition for market share in all French industrial and service sectors. American exporters to France generally face more competition from European companies than from Asian ones. Positioned at the heart of the world’s largest market, France offers a favorable economic environment to potential exporters.

Country Commercial Guide 2013 Please contact Olivier.Collette@trade.gov

Market Overview

The U.S./French economic and political relationship is one of the United States’ oldest and closest bilateral alliances. Today, as has been the case for over 230 years, the United States and France work together on a broad range of trade, security and geopolitical issues. As befits two of the world’s largest economies with such a long and co-operative history, the trade and investment activity between France and the United States is substantial and vibrant. Current global economic conditions have only slightly impacted aggregate trade between the two nations and significant opportunity exists for both direct trade and foreign direct investment.

With a GDP of approximately $2.77 trillion, France is the world’s fifth-largest economy (2012). It has substantial agricultural resources, a large industrial base, and a highly skilled workforce. While manufacturing has declined from sixteen percent of GDP in 1999 to 10.7 percent today, a dynamic services sector accounts for an increasingly large share of economic activity and is responsible for nearly all job creation in recent years. Real GDP increased 1.7% in 2011, but remained flat in 2012 while the unemployment rate increased from 9.4% (Metropolitan France) in 2011 to 10.2% in 2012. In 2013, France has dipped into a recession with a decline in first quarter 2013 GDP of 0.8 percent on an annualized basis and is struggling to revitalize its economy while at the same time reducing its annual budget deficit.

France is the second-largest trading nation in Western Europe (after Germany). In 2012, the country ran an $86 billion trade deficit of goods based on total trade of $1.2 trillion. The majority of this trade (58%) was with EU-27 countries. France is a member of the G-8 (and initiator of the G-20), the European Union, the World Trade Organization and the OECD, confirming its status as a leading economic player in the world.

Trade and investment between the United States and France have remained strong. Statistically, the United States is France's sixth-ranked supplier and its fifth-largest customer. France ranks as the United States' ninth largest supplier of imported goods and twelfth-largest customer for U.S. exports. U.S.-France trade in goods, services and income receipts totaled nearly $142 billion in 2012, broken-down as 51.8 percent in goods, 23.3 percent in services, and 24.8 percent for income receipts from direct investment, and other private and government receipts and payments.

The main trading categories in goods are industrial chemicals, aircraft and engines, electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific instrumentation, medical instruments and supplies, broadcasting equipment, and programming and franchising opportunities, all of which are particularly attractive to French importers.

The French market for food products is mature, sophisticated, and well served by suppliers from around the world. An increasing interest in American culture, younger consumers, and changing lifestyles contribute to France’s import demand for American food products. Generally, high quality food products with a regional American image could find a niche in the French market.

Although trade in goods and services receive most of the attention in terms of the commercial relationship, foreign direct investment and the activities of foreign affiliates can be viewed as the backbone of the commercial relationship. The scale of sales of U.S.-owned companies operating in France and French-owned companies operating in the United States outweighs trade transactions by a factor of almost five.

In 2011, France was the fourteenth largest host country for U.S. foreign direct investment abroad with investments valued at $89 billion, making the United States the largest foreign investor in France. France was the second largest foreign investor in the United States and the fifth largest investor on a historical cost basis. French-owned companies employ about half a million workers in the United States while another half a million employees work for U.S. companies established in France.

The trade balance on all bilateral transactions between the United States and France can be viewed at:


Market Challenges

Foreign investors say that they find France’s skilled and productive labor force, good infrastructure, technology, and central location in Europe attractive. France’s EU and Eurozone membership facilitates the movement of people, services, capital and goods. However, notwithstanding French efforts at economic reform, market liberalization, and attracting foreign investment, U.S. and foreign companies often point to the tax environment, high cost of labor, rigid labor markets and pressure on foreign investors who need to restructure, downsize or close operations as disincentives to investing in France. The 2012 AmCham Bain Survey, released in December 2012, details U.S. company concerns about some of France’s economic policies, notably recent tax reforms affecting businesses and individuals.

A tradition of state intervention in the French economy can pose challenges to both French and foreign investors, as corporate governance and employment decisions frequently attract political attention. French labor unions tend to see U.S. firms as focused on short-term profits at the expense of employment and not sufficiently committed to social dialogue or respect for their legal obligations to employees when restructuring.

Corporate tax rates are high compared to those in other leading industrial countries. The current administration's reform of corporate taxation, the announcement in 2012 of a new marginal tax rate on personal earned income over $1.3 million, and increased taxation of stock options have increased investor concerns. Foreign investors most often cite high wages, including a minimum wage (“Salaire Minimum Interprofessionnel de Croissance – SMIC”) of $1,859 per month, payroll taxes and complicated labor regulation as the greatest disincentives to investing in France.

A degree of opaqueness in the privatization process can be a concern regarding the equal treatment of foreign investors in publicly held firms. As of December 2012, the Government of France (GOF) maintained stakes in Aéroports de Paris (54.54 percent), Air France KLM (15.88 percent), Areva (14.33 percent), CNP Assurances (1.10 percent), EADS (14.96 percent), EDF (84.44 percent), France Telecom (13.45 percent), GDF-Suez (36.74 percent), Renault (15.01 percent), Safran (30.20 percent), and Thalès (27.08 percent), and in unlisted companies including SNCF, RATP, CDC and La Banque Postale. By the end of 2011, the government had a majority stake in 1,500 smaller firms in a variety of sectors, and a minority stake in 540 other firms. GOF stakes in these companies are sometimes sold through market-based public offerings, but more commonly through an off-market bidding process.

Market Opportunities

France is an economically developed nation with a large, diverse and sophisticated consumer base. It has a strong manufacturing sector that seeks out quality components from foreign suppliers. Finally, its comparatively affluent populace is a leading consumer of services, particularly in the educational and travel sectors. The greatest opportunities for U.S. export and investment listed below reflect these trends and realities. It should be noted that while the overall French market can be viewed as essentially similar to the U.S. market, the individual French consumer of products and services is very discriminating and care and planning are essential to success for U.S. exporters in this market.

There are significant market opportunities for consumer food/edible fishery products in a number of areas: fruit juices and soft drinks (including flavored spring waters), dried fruits and nuts, fresh fruits and vegetables (particularly tropical and exotic), frozen foods (both ready-to-eat meals and specialty products), snack foods, tree nuts, "ethnic" products, seafood (particularly salmon & surimi), innovative dietetic and health products, organic products, soups, breakfast cereals, and pet foods. In addition, niche markets exist for candies, chocolate bars, wild rice, kosher, and halal foods. Market opportunities for U.S. exporters also exist for oilseeds, protein meals and other feeds, as well as for wood products and grains.

Market Entry Strategy

In general, the commercial environment in France is favorable for sales of U.S. goods and services. Marketing products and services in France is similar to the approach in the United States, notwithstanding some significant differences in cultural factors and certain legal and regulatory restrictions. However, because the French market is sophisticated with the entrenched bias of a conservative market that sticks to known suppliers and therefore requires sustained market development, entry should be well planned. Competition can be fierce, but local partners are readily available in most sectors and product lines.

In addition to this Country Commercial Guide, the Commercial Service office in Paris offers many services and customized solutions designed to assist you in developing your market entry strategy and to facilitate your export experience in France. For a detailed description of these services please visit: http://export.gov/france/

Links to web sites outside the U.S. Government or the use of trade, firm, or corporation names within U.S. Commercial Service web sites are for the convenience of the user. Such links and use do not constitute an express or implied official endorsement or approval by the United States Department of Commerce of any private sector web site, or of the products or services of specifically identified companies or of any of the private entities that may have contributed to a U.S. Commercial Service web site.