With the global economy performing better again, positive momentum is building, and France is well set to make the most of it.
They’re cowards, they’re lazy and they’re arrogant… there are many misconceptions in how France and the French are sometimes perceived abroad. But let’s not forget that France is also seen in a positive light, particularly for its world-famous cuisine and chic luxury goods. And today, increasingly, that’s not all…
On January 22 this year, President Emmanuel Macron proved to the business world just how impressive France is, and how much has been done to move the country forward, at a special “Choose France” summit for foreign investors. The event was held at the Palace of Versailles and was attended by more than 140 of the world’s most influential CEOs, who were en route to Davos, where the World Economic Forum was being held two days later.
Internationally renowned French chef Alain Ducasse prepared a gourmet meal for chief executives of companies including Goldman Sachs, JP Morgan, Facebook, Rolls Royce, UPS, Bosch, Google and Alibaba in the majestic Gallery of Great Battles. This enormous room, with its large cornice, Corinthian columns and vast paintings depicting major French military successes, was chosen by President Macron himself as the ideal place to showcase French prowess and encourage foreign investors to choose France.
The all-out charm offensive proved very successful, with Toyota announcing plans to invest €300 million in its production facility in Valenciennes (northern France), which will also receive a grant worth €15-€20 million from the French government. Other big-name investors included Facebook, which will spend €10 million on an artificial intelligence research center in France, and Google, which is also investing in AI and new personnel at its Paris offices. The pharmaceutical group Novartis reaffirmed its intention to acquire the French biotech firm Advanced Accelerator Applications for €3 billion, and to invest €900 million over the next three years.
It appears that 2018 will be the year to remember that “entrepreneur” is indeed a French word. President Macron is determined to transform the country into a startup nation – or, at the very least transform its image abroad, as contrary to what some voices might have you believe, entrepreneurship in France is already well on the up.
Half a million companies are created every year in France – including 554,000 in 2016, a 6% increase on 2015 – thanks to favorable administrative and financial conditions, particularly for startups. It is now quicker to create a business in France (3.5 days on average) than in the United Kingdom (4.5 days) or Germany (10.5 days). What’s more, France is now the 10th best country in the world for e-government. As a result, foreign investment came to €45 billion in 2016, compared with €11 billion in 2014, while government funding for new businesses, in the form of 62 different grants, amounted to €10 billion.
It is also clear that new momentum is building throughout France. In March 2017, a survey revealed that 52% of French people would be interested in creating their own startup if they had the chance. With Brexit looming, and economic growth on the rise in France, now is the ideal time to raise the country’s profile. As it happens, the new French president has his own ‘business plan’ that he has been working on ever since he was elected.
Last June, during VivaTech, the French equivalent of the Las Vegas Consumer Electronics Show, President Macron set the tone of his period in office by saying that “France is becoming a startup nation. I want to anticipate this movement and take it forward. France is the place to be, France is where you should invest.”
He promised that France’s public investment bank, Bpifrance, would provide €10 billion to fund French companies at key stages in their development, and also announced updated plans for Talent Visas that would make it easier for foreign talent to come to France. Eligible startuppers (and their families), master’s graduates and foreign investors can now apply online for a French Tech Visa, which lasts up to four years.
One month later, in July, he announced that he was scrapping the highest 20% rate of a special payroll tax paid by companies not subject to VAT, that compensation and bonus schemes would no longer be included in the calculations for severance pay, and that plans to extend the financial transaction tax to include intraday transactions would not go ahead. The benefits of these first few measures were quickly felt, with 60% of chief executives of foreign companies operating in France saying that the country was now “more attractive since the Presidential elections”. These new measures were also welcomed by the French people themselves; a survey carried out in June revealed that 68% thought that the government was adding new momentum to entrepreneurship and enterprise creation.
Encouraged by this support at home, Emmanuel Macron invited twenty foreign investors last October to the Élysée Palace for a special dinner, during which he detailed the reforms already implemented since his election.
This opening gambit proved to be a successful ‘dress rehearsal’ for the government to prepare for the larger Versailles “Choose France” summit. For this initial meeting, the president and the prime minster summoned 15 ministers to fulfil 15-minute appointments, during which they went through the new reforms and initiatives to attract foreign investment. This strategy has already paid off, since each one of the twenty guests now has an investment project they would like to pursue in France, according to government sources.
“For the first time, international investors are viewing France in a truly positive light,” says Brice Teinturier, Executive Director at Ipsos, France’s largest market research firm. A report published in December 2017 by Ipsos showed that France was now ranked as the world’s third most innovative country, and the leading country in Europe. As far as business is concerned, France’s future has rarely looked brighter.
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