Key points to France’s attractiveness

In France in 2010, more than 20,000 foreign firms employed more than 2 million people

• Since 2005, a short list of firms regularly tops the list of foreign investors in France; they include Bertelsmann, GE, and IKEA, all of whom are present at this year’s Council.

• The 25 foreign firms taking part in the 2011 Strategic Attractiveness Council represent more than €23 billion in turnover and 56,000 jobs in France.

2010 was a very good year for foreign job-creating investments in France

• 22% more foreign investment projects than in 2009. A total of 782 projects, the highest
figure in 15 years. (see 2010 Report: Job-creating Foreign Investment in France for
descriptions of a selection of these projects (pp. 6–10).

• 32,000 jobs or maintained – a 6% rise over 2009. An increasing number of these jobs are in future-oriented or high value-added sectors.

Attracting foreign investments through innovation

• In 2008, 2000 foreign firms benefited from the Research Tax Credit.

• 536 foreign firms are present in French competitive clusters – some 10% of the total

• 25 European Union member countries have agreed to introduce a unitary patent thatcould make the cost of protecting an innovation five times cheaper, on a par with patent filing costs in the United States and Japan.

The impact of structural reforms put in place three years ago

• Elimination of the Local Business Tax: in 2010, the tax burden on businesses was lightened by an estimated €7.3 billion, a figure that should be €4.7 billion when thescheme is fully operational.

• Within the context of the Economic Modernisation Act, a more favourable tax regimefor «impatriates» – more than 8,000 people have already benefited from this regime, and their numbers are growing all the time.

• In early 2010, an initial assessment of the working week reform was carried out: three quarters of businesses with fewer than 10 employees benefited from the tax-free overtime measure.

The Greater Paris project leads the way

• Between 2010 and 2025, the public authorities will invest more than €32 billion in public transport in the Greater Paris region.

• On the Saclay Plateau south of Greater Paris, more than €2 billion for the construction of Europe’s largest scientific and technological campus, to be completed by 2020.

New measures to make France a more attractive business destination, including:

• introduction of a single point of contact dealing with tax matters for non-resident firms by the end of 2011;

• a fast-track procedure to expedite arrivals and departures at Charles de Gaulle and Orly airports by the end of 2011.

Sustained growth in job-creating foreign investment projects in 2010

Strong resurgence in project numbers. Following a plateau in 2007-2009, the number of projects was up by 22% in 2010: 782 projects were recorded by the Invest in France Agency and France’s regional development agencies, the highest figure in the last decade
and a half, which equates to an average of 15 investment decisions per week in 2010.

Growth in the number of jobs created. These foreign investments will create – or in the case of takeovers of ailing companies maintain – 31,815 jobs: a 6% year-on-year increase.

• Over half (51%) of the investments recorded in 2010 generated fewer than 20 jobs, compared with only 42% in 2007.

• The number of projects recorded in high value-added activities continued to grow, particularly in R&D activities (51 projects, up 21% on 2009), renewable energies (89 projects, up 46%) and company headquarters (40 projects in 2010, versus only 11 in 2009).

The majority of investment projects were site creations. After three years of virtual stagnation, the number of investments involving an expansion of existing facilities shot up 70%. On the other hand, site creations, which have continued to grow in number since 2007, accounted for over half of all projects. First-time investments in France accounted for a significant share (9%) of all projects recorded in 2010.

Increasing share of intermediate-sized investors. Foreign companies of all sizes initiated these investment projects: 33% were SMEs, 33% were intermediate companies (up from 27% in 2009), and 33% were large corporates; 533 were from the manufacturing sector
and 249 from the service sector.

Preponderance of Europe and North America among source regions. Europe (65% of all projects) and North America (22% of all projects) were the two leading source regions, accounting for over 85% of the total. Germany and the United States consolidated their
leading position, with 140 and 139 projects respectively, ahead of the United Kingdom, Italy and Spain.
Companies from BRICs countries accounted for 47 projects, or 6% of the total. China became the leading Asian investor with 35 projects. Significant investment from five countries –United States, Germany, United Kingdom, Sweden and China – was an important factor
in the year-on-year increase in project numbers.
The five leading host regions in France – Ile-de-France, Rhône-Alpes, Provence-Alpes-Côted’Azur, Midi-Pyrénées and Lorraine – attracted 65% of all projects.
However, project number growth in 2010 was observed in many regions, with 12 regionsreceiving more investments than in 2009 and 10 regions recording project number growth of over 20%.

Innovation: the key to France’s success as a business destination

France is a European leader in research and innovation:
• second in Europe for the number of international patent applications filed in 2010
(WIPO, 2011);
• third in Europe for the number of Nobel Prizes in the sciences and first in Europe
for Fields medals (mathematics);
• third in Europe for the number of researchers (274,000) after Germany and the
United Kingdom (Eurostat, 2011).

Innovation: a national priority

• 71 competitive clusters illustrate the wide range of assets boasted by France’s industries
and give companies, universities and public research centres the wherewithal to develop collaborative R&D projects. The clusters cover a total of over 5,600 companies.
From 2006 to 2010, more than 4,600 collaborative projects were granted over €3.6 billion in public financing for leverage.

• The best Research Tax Credit (CIR) in Europe since 2008: the CIR finances 40% of R&D spending in the first year, 35% the second year, 30% the following years up to €100 million and 5% thereafter. Its rate is doubled for R&D outsourced to public laboratories.

• The university reform: French universities have been adopting autonomy since 2008 to strengthen their links with business (development of collaborative projects, creation of foundations, and representatives of business on university boards). By early 2011,
90% of French universities had become autonomous and many higher education establishments had grouped together to produce a more rational range of world-class education and research.

• The Investment for the Future Programme: In 2010, €35 billion was earmarked for France’s five strategic investment priorities to power up future growth (higher education and training, research, industry and SMEs, sustainable development, and the digital economy). €11 billion of this budget was allocated to higher education and training, including the financing of five to ten international campuses of excellence together
with Europe’s largest scientific and technological campus in Saclay (south of Paris). €8 billion of this sum was assigned to research mainly to create technological research institutes, develop research facilities and encourage the development of industrial patents. The total sum of private and public investment expected is €60 billion.

The importance of opening up to foreign investment

• R&D by foreign firms accounts for 22% of total R&D spending in France.

• 536 foreign groups, or 10% of a total of 5,600 firms, work in competitive clusters.

• 2,000 foreign groups filed a research tax credit return in 2008, representing 15%
of a total of 13,000 firms concerned.

• In 2009, France was a European leader for jobs created in R&D by foreign investment (European Attractiveness Survey, Ernst & Young, 2010).

• In 2010, 51 foreign firms decided to invest in R&D activities in France (as opposed
to 25 in 2007).

The European Union patent: for competitiveness in innovation

At the suggestion of France and other European countries, 25 European Union member countries have agreed to introduce a unitary patent. Under this system, inventors will be able to file an application for a single, affordable, legally certain patent valid throughout
the 25 countries.

• Three languages will be able to be used to file patents: German, English and French.
Initially, a translation into one language other than the filing language will have to be provided, but an automatic translation system will soon be set up to further lighten the translation burden on businesses.

• Secondly, further discussions will be held on setting up a unified patent litigation system to make it easier for industrial property rights holders to enforce their rights, especially where counterfeits are concerned.

• The EU unitary patent system and its associated legal system will create a European economic environment even more conducive to innovation.

This new system will be introduced in the near future.

Impact for foreign businesses:

• more effective and affordable protection of innovations throughout the European market;

• this new patent could make the cost of protecting an innovation in 25 EU member countries five times cheaper, on a par with patent filing costs in the United States and Japan.

Last modified on 19/04/2011

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