France is the third largest economy in Europe. It is an economically developed country with quite a large, diversified, and sophisticated consumer base. Even though manufacturing has steadily declined as a percentage of the Gross Domestic Product, many of France’s remaining industries lie under pharmaceuticals and aerospace which are still global leaders and receptive to foreign partners and investors (who are keen on company formation in France).
Moreover, investment opportunities can also be found in a wide range of other business sectors such as biotechnology, e-commerce, information, food products, microelectronics, logistics, and communication technologies, and smart cities.
With strong state support for innovation and reindustrialization in specific sectors, new opportunities are being offered to foreign investors, particularly in education, healthcare, digital technology, and ecology (ecological transition being a top priority in the coming years).
In addition, France is expected to adopt medium-term privatisation programs in the gas, rail transport, electricity, and postal services.
Though the government has not yet recently announced plans to privatise any of the remaining state-owned enterprises, it has significantly reduced its shareholdings in several companies. Hence, this could create investment opportunities for foreign businesses including company registration in France.
As a natural crossroads for European and International trade, France is undoubtedly an attractive destination for doing business, in particular, due to the following reasons:
A Large market and a unique geographical position
Located in the heart of Western Europe, France also has a direct link to the UK and some Maghreb countries. The country has a large market (65 million consumers) and direct access to the single market of the European Union (over 450 million consumers).
Quality public services and efficient infrastructures
The country has the largest road network and the 2nd largest high-speed rail network in the whole of Europe. Additionally, it offers high-quality public services (health, education, etc.) to its citizens and residents.
A qualified and productive workforce
Contrary to common belief, the country’s workforce is highly productive, with many higher-education graduates from renowned universities and business schools while having dynamic demographics.
A business environment which is quite friendly
In the past few years, France has taken several measures to improve the business environment (tax credits, tax cuts, reform of the labour market, reduction of the administrative burden, simplification and modernization of French corporate law, etc.) and make it more competitive and innovative than ever before.
A hub for innovation and technology
Technology plays an important role in the country’s economy. The French Government has implemented attractive R&D tax incentive programs to support innovation, through firm commitments such as research tax credit, innovation tax credit, and a few major investment plans from the year 2018 to2022. Also, France is the world’s number 2 research centre while being first in Europe for hosting R&D investments.
Further, as a result of the COVID-19 pandemic, France has recently launched a national Recovery and Resilience Plan as part of NextGenerationEU, i.e., the European Union’s plan for emerging stronger from the COVID-19 crisis. To elaborate more, the country’s Recovery and Resilience Plan focuses on three key priorities – environment, competitiveness, and social and territorial cohesion – and includes large-scale investment projects in more environment-friendly production and consumption, such as the retrofitting of buildings and the development of green mobility and technology, along with the support for innovation in strategic sectors such as health and digital technology, including artificial intelligence.
Once again, the French government has devoted significant resources to attracting foreign investors through policy incentives, overseas trade promotion offices, investor support mechanisms, etc. All of these efforts are indeed paying off since France has just been recognized as the most attractive country in Europe for foreign investors for the second year in a row.
However, the next presidential election will take place in April 2022 and the outcome of the election is likely to have a significant impact on the evolution of the French business environment.