Entrepreneurship and investing in France

5 key facts about the French economy

France has many strengths for businesses and foreign investors.

France’s economic attractiveness is booming and is attracting a growing number of foreign investors. According to the EY Europe Attractiveness Survey 2018, France is the third-most attractive European country after the United Kingdom and Germany. Let’s take a look at the French economy – beyond the clichés.

1. France is a global economic power

With GDP of $2,575 billion at current prices in 2017, France is the world’s fifth-largest economy after the United States, China, Japan and Germany. It is also Europe’s second-largest market with over 66 million consumers. France is home to 29 of the world’s 500 leading businesses (Fortune Global 500, 2017). The French economy goes beyond the well-known economic sectors of luxury goods and agrifood but also has strong banking and insurance sectors as well as energy and automotive industries.

2. France is open to foreign investors

Over 28,000 foreign-owned firms are located in France and nearly 1 in every 9 French employees work in a subsidiary of foreign companies.

France is ranked 10th for Foreign Direct Investment (FDI) stock (source Cnuced, 2017).

In 2018, France’s attractiveness improved further and France was chosen to host 1,323 foreign investment projects, a figure which exceeds that of 2017 (i.e. 1,298) which was already a record.

Paris is behind Beijing and Tokyo but above London and New York in the ranking of cities that are home to the most Top 500 businesses’ headquarters (27).

Business France is responsible for prospecting and welcoming international investments to France as well as internationalizing the French economy. Business France is a public institution, under the auspices of the Ministry of the Economy and Finance, the Ministry for Europe and Foreign Affairs and the General Commission for Territorial Equality. It is present in France and 70 countries around the world to promote the attractiveness of France, its businesses and its territories.

Business France’s Welcome Office helps it provide useful information about every aspect of entrepreneurship and taking up a job in France from administrative procedures and visas to living in France.

3. A dynamic country at the heart of Europe

As a founding member of the European Union and Eurozone, France has direct access to the single European market and EU partners. Its geographical location and high-quality transport infrastructure make France a hub for easy access to other countries, continents and geographical regions like EMEA (Europe, Middle East and Africa).

France has some 56 competitiveness clusters which operate in various sectors: aeronautics & space, agriculture and agrifood, biotechnologies & health, chemicals, eco technologies & the environment, energy, software & digital technology, ITC, transport, etc.

Innovative businesses have access to an extensive network of incubators and accelerators across France, including the world’s biggest start-up campus, Station F.

France, 10th of 137 on the Global Entrepreneurship Index
The 2018 Global Entrepreneurship Index published by the Global Entrepreneurship and Development Institute (GEDI) assesses and ranks the ability of 137 countries to offer a favourable environment for entrepreneurship.

France’s 10th place in 2018 was a 3-place improvement on the 2017 Index. This position highlights the quality of the French entrepreneurial ecosystem and its ability to innovate.

4. Highly-qualified and productive human resources

France is investing heavily in its education system (5% of GDP). It has a highly qualified, adaptable workforce which can master new technologies, which are essential to increase productivity. Some 44.7% of the population aged 25-34 and 33.5% of the population aged 25-64 have a higher education qualification. France also ranks 7th in the world for hourly labour productivity, ahead of Germany (8th) and the UK (18th) (source Conference Board, 2017).

86% of foreign business leaders asked consider that the education and qualifications of France’s workforce are attractive.

5. An innovative country

With domestic research and development spending equal to 2.2% of GDP, France ranks 6th in the world according to the World Competitiveness Yearbook 2018 (behind the United States, China, Japan, Germany and Korea). The five main R&D investment sectors are cars, aircraft and spacecraft manufacturing, pharmaceuticals, scientific and technical activities, and IT and information services. France specializes in growth areas such as biotechnology and environmental technologies.

In 2018, seven French actors featured in the ranking of the world’s 100 top innovators (the Atomic Energy Commission, Alstom, Airbus, Safran, Saint-Gobain, Thales and Total).

France welcomed 78 R&D centres in 2017 (some 27 more than in 2016), according to a study by EY published in 2018. French scientific excellence has led to numerous large corporations establishing R&D centres in France. For example, several large foreign tech companies have chosen Paris as the location to carry out their research work on AI. Such businesses include Facebook, present in France since 2015, but also Google, Fujitsu, Samsung and Microsoft, which is developing an ambitious training plan with Simplon in France, with the aim of raising awareness of issues surrounding AI among 400,000 people of all profiles.

In 2017, the government set itself the goal of making France a “Start-up Nation”, and, on 15 January 2018, created a fund of €10 billion to finance innovation, which will be endowed by sales of public assets.

An large-scale €57 billion investment plan for 2018-2022 to support structural reforms and prepare France for tomorrow’s challenges

It is based on four priorities:

  • €20 billion to boost the ecological transition (improving mobility, increasing renewable energy production),
  • €15 billion to foster a skills-based society (training and improving initial training),
  • €13 billion to shore up competitiveness from an innovation perspective (supporting scientific excellence, improving innovation in businesses),
  • €9 billion to build the digital State (improving quality of and accessibility to public services, bolstering the digital transition within the healthcare and social cohesion system).
How can one find out more about moving to France?
Business France’s Welcome Office, a welcome service for international talent provides all the necessary information on:
  • life in France,
  • conditions for living and working in France,
  • personal tax matters,
  • social security for your household,
  • and everything else you need to know about everyday life in France (schooling, housing, driving, etc.).

Updated: April 2019