10 MYTHS ABOUT FRANCE

1
10 MYTHS ABOUT FRANCE
November 2008
2
Myth 1 France is on the decline.
Reality France is a global player

• Worlds 5th largest economic power, at the heart
  of a 495 million-strong consumer market.
• 3rd leading destination worldwide for FDI, second
  only to the U.S. and the U.K. (UNCTAD).
• Worlds 5th largest exporter of goods and
  services.
• Largest and most powerful groups in Europe 39 in
  France, 37 in Germany and 34 in the UK (Fortune
  Global 500).
• Best fertility rate in Europe 2 children per
  woman (Eurostat) a 9.2 population growth over
  the last 10 years (1998-2008).

3
Myth 2 The French are always on strike.
Reality Fewer days lost to strikes than in the
U.S.
Working days lost per 1,000 inhabitants per year
(average 2004-2006)
Data source IMD 2008
4
Myth 2b The French dont work enough.
Reality French managers work longer hours than
most of their European counterparts and French
workers work as much as their European
counterparts.
Average number of hours worked per week
(full-time)
French employees work an average of 41 hours a
week.
Data source Eurostat, Series EFT, 2008
5
Myth 2c The French are not productive.
Reality France ranks 3rd in the world, after
Norway and the U.S., for the best labor
productivity per hour
Labor productivity (GDP per hour worked)
Source International Labor Organization KILM
2008
6
Myth 3 France is not business-friendly.
Reality Lowest cost structure in Europe
Comparison of total business costs (Country with
lowest cost ranks 1st Overall results US100.0)
Business set-up costs based on an average of
twelve criteria, including payroll, location,
transportation, utilities, and taxes.
Source Competitive Alternatives KPMGs Guide to
International Business Location KPMG 2008.
7
Myth 4 France has too much red tape.
Reality Companies can set up in 7 days
Broadband accessBy 2010, every person in
France will have broadband access.
Source Doing Business 2009, World Bank Group
8
Myth 5 French taxes are stifling.
Reality A more and more competitive fiscal system

• Maximum income tax rate reduced to 40.
• Maximum overall tax dropped from 60 to 50 of an
  individuals total revenue, including direct,
  national and local taxes.
• Full exemption from local business tax for new
  inclusive until January 1, 2010.

Marginal tax rate in Europe
Source Septimanie Export 2008
9
Myth 6 France is conservative and reluctant
to change.
Reality France is on the move (FMI, 2007) In
2007, France received the highest marks
worldwide for the governments performance in
adapting for economic change. (IMD, Lausanne,
2008)

• New incentive to earn more exemption from tax
  and social security contributions on overtime
  hours.
• More room to negotiate work hours greater
  flexibility for overtime hours raised limit for
  management staff to 235 work days (from 218).
• A more flexible labor market a new type of work
  contract with extended trial period new
  procedure to terminate a contract out of court.

10
Myth 7 RD France lags behind.
Reality France is reinforcing its strengths in
innovation.

• The best research tax credit in the OECDs
  countries since January 2008.
• 2nd country in Europe for the amount of private
  Research expenditures (30 billion in 2006) and
  for total research expenditures (48 billion in
  2006).
• Number of international patents France ranks 2nd
  in Europe and 5th worldwide
• 71 innovative clusters more than 2,000 projects
  launched between 2003 and 2008 for a 4 billion
  budget (including almost 2 billion of public
  aids).500 establishments linked to foreign
  corporate groups in the French clusters.

11
Myth 7b France dont attract foreign talent.
Reality

• France is a brain-gainer France attracts more
  graduates than it loses only the USA and Canada
  can compare.
• 3 new residency permits and a very favorable
  fiscal and legal environment for expatriates.
• With 260,600 foreign students in 2007/2008 (11.7
  of the student population), France is the 3rd
  most attractive country in the OECD, just after
  the U.K. and Germany.

12
Myth 8 France is not open to globalization.
Reality France is the worlds 3rd leading
destination for FDI.
FDI stocks as a of GDP in 2007
22,000 foreign companies operate in France and
employ over 2.8 million people.
Source WIR 2008, UNCTAD
13
Myth 9 Paris is less international than
London or New York.
Reality Paris is the worlds 2nd leading
destination for company headquarters.
Source Fortune  Global 500 companies  2008
14
Myth 10 France is mainly food, fashion and
wine.
Reality Fifteen of the worlds top 200 companies
are French
Worlds Top 200 companies (based on profits,
earnings, and market value)
Banking
Energy
Insurance
Energy
Energy - Environment
Supermarket distribution
Medical
Banking
Telecommunication
Media - Telecommunication
Industry -Services
Automotive
Banking
Energy
Material
Source Forbes The Global 2000, 2008