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Country Risk Report: France


Official Name: French Republic

Internet Domain: .fr
International Dialing Code: +33

Table of Contents

Location and Size
Government Risk Assessment
Legal System Business Climate
Economy Business Protocol
Comparative Economic Indicators Other Sources of Information


Location and Size

Located in Western Europe, France is the second largest country on the continent, with an area of 211,209 square miles.

Government

France’s government is a Republic, which exercises executive power in the French Republic. 

Branches:

  • Executive: Chief of State, President Francois Hollande; Prime Minister, Manuel Valls. 
  • Legislative: Bicameral Parliament which holds 348 seats. 
  • Judicial: Court of Cassation (consists of 15 justices)

Legal System

France's legal system is based on Civil Law. The basis of the French legal system is laid out to a document written in 1804 known as the Code Civil, which laid down the rights and obligations of citizens, and the laws of property, contract, inheritance, etc.  The Code Civil remains the cornerstone of French Law to this day, though it has been updated several times to take account of changing society. 

Economy

France is the world’s fifth-largest economy. It has substantial agricultural resources, a large industrial base, and a highly skilled work force. A dynamic services sector accounts for an increasingly large share of economic activity and is responsible for nearly all job creation in recent years. Government economic policy aims to promote investment and domestic growth in a stable fiscal and monetary environment. Creating jobs and reducing the high unemployment rate has been a top priority.

France is in the midst of transition from a well-to-do modern economy that has featured extensive government ownership and intervention to one that relies more on market mechanisms. The government has partially or fully privatized many large companies, banks and insurers, and has ceded stakes in such leading firms as Air France, France Telecom, Renault, and Thales.

France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare.

France has weathered the global economic crisis better than most other big EU economies because of the relative resilience of domestic consumer spending, a large public sector, and less exposure to the downturn in global demand than in some other countries.

Leading Markets (2015): Germany 15.9%, Italy 8.2%, Spain 7.8%, Belgium 7.4%, UK 7%, US 5.7%

Leading Exports-commodities: machinery, chemicals, automobiles, metallurgy, aircraft, electronics, textiles, food processing, tourism

Leading Suppliers (2015): Germany 19.4%, Belgium 11.6%, Italy 8%, Netherlands 7.1%, Spain 6.7%, UK 4.9%, US 4.7%, China 4.4%

Leading Imports-commodities: machinery and equipment, vehicles, crude oil, aircraft, plastics, chemicals

Top Industries: machinery, chemicals, automobiles, metallurgy, aircraft, electronics, textiles, food processing, tourism

Top Agricultural Products: wheat, cereals, sugar beets, potatoes, wine grapes, beef, dairy products, fish

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Comparative Economic Indicators – 2015 

France Germany Spain Italy U.S. U.K.  Belgium
Population* (millions) 66.5 81.5 46.8 61.0 318.9 62.7 11.2 
Population growth rate* (%) 0.5 -0.2 0.6 0.4 0.7 0.6 0.6 
Age Structure (%)
(14 to 64 years old)
81.26 66.1 67.7 82.4 67.8 66.2 81.8 
Age Structure (%)
(65+ years old)
18.74 20.6 17.1 17.6 17.0 16.5 18.2 
Literacy 99.0 99.0 97.9 98.4 99.0 99.0 99.7 
Unemployment rate (%) 10.5 7.1 20.1 8.4 6.2 7.8 8.5 
Inflation (%) 1.4 1.1 2.0 1.6 0.7 3.3 0.5 
Population below poverty line (%) 8.1 15.5 19.8 unknown 15.1 14.0 15.2 
GDP** (USD) 2.806 (trillion) 2,940.0 1,369.0 1,774.0 16.77 (trillion) 2,173.0 46,877.99 
GDP real growth rate (%) 0.2 3.5 -0.1 1.3 2.2 1.3 0.3 
GDP per capita** (USD) 40,500.0 35,700.0 29,409.0 30,500.0 53,041.9 34,800.0 43,100.0 
Public debt (% of GDP) 95.5 83.2 60.1 119.1 74.4 76.1 101.5 
Exports (USD billions) 584.5 1,303.0 253.0 448.4 1.633 (trillion) 410.3 314.6 
Imports (USD billions) 631.1 1,099.0 315.3 471.1 2.374 (trillion) 561.6 330.8 
Reserves of foreign exchange and gold (USD billions) 166.2 216.5 31.9 158.9 434.4 82.4 25.4 
Currency Euro
EUR
Euro
EUR
Euro
EUR
Euro
EUR
U.S. Dollar
USD
Pound
GBP
 Euro
EUR
Exchange rates (per USD) 1/21/2016 1.08 1.08 1.08 1.08 1.00 1.42 1.08 
Exchange rates (per EUR) 1/21/2016 1.0 1.0 1.0 1.0 .92 0.9
Rating in 2015 Corruption Perceptions Index*** 6.8 8.0 6.1 4.3 16 7.7 15 
Rating in 2015 Index of Economic Freedom**** 64.6 71.8 70.2 60.3 76.2 74.5 68.8 

* July, 2015 estimates
** PPP – Purchasing Power Parity
*** 2015 Corruption Index: 10=Very Clean; 0=Highly Corrupt
**** 2015 Index of Economic Freedom: 100-80=Free; 49.9-0-Repressed

Economic Data from CIA World Factbook
2015 Corruption Perceptions Index, Tranparency International
2015 Index of Economic Freedom, Heritage Foundation

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Risk Assessment

Coface Country Rating: A3 -- The political and economic situation is good. A basically stable and efficient business environment nonetheless leaves room for improvement. Corporate default probability is low on average.

Coface Business Climate Rating: A1 -- The political and economic situation is very good. A quality business environment has a positive influence on corporate payment behavior. Corporate default probability is very low on average.

Growth in 2015 can be attributed to public and household consumption, and is expected to continue in 2016. 

Ducroire Political Risk: 1 – lowest risk
Ducroire Commercial Risk: B – moderate risk

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Business Climate

France offers quality infrastructures and public services, as well as a qualified workforce and high productivity.

Economic Freedom: France’s economic freedom score is 62.5, making its economy the 73rd freest (out of 179) in the 2015 Index of Economic Freedom. It is ranked 33rd out of the 43 countries in Europe and it’s overall score is higher than the world average.

Regulatory System: The French government has made considerable progress in recent years improving the transparency and accessibility of its regulatory system. Of most concern to foreign companies has been standards setting. With standards different from those in the U.S., rigorous testing and approval procedures must sometimes be undertaken before goods can be sold in France. Where EU-wide standards do not exist, specific French standards apply. The United States and the EU have negotiated mutual recognition agreements covering the testing and certification of certain specified regulated products.

Intellectual Property Rights: France is a strong defender of intellectual property rights and has highly developed protection for intellectual property. Under the French system, patents and trademarks protect industrial property, while literary/artistic property is protected by copyrights. By virtue of the Paris Convention and the Washington Treaty regarding industrial property, U.S. nationals have a "priority period" after filing an application for a U.S. patent or trademark during which to file a corresponding application in France. This period is twelve months for patents and six months for trademarks.

Currency Conversion and Transfer Policies: All inward and outward payments must be made by bank transfers through approved banking intermediaries. There is no restriction on repatriation of capital. Similarly, there are no restrictions on transfers of profits, interest, royalties, or service fees. Foreign-controlled French businesses are required to have a resident French bank account and are subject to the same regulations as other French legal entities. The use of foreign bank accounts by residents is permitted.

Corruption: France’s 2015 Global Corruption Perceptions Index (Transparency International) ranks at 23 out of 175, and scored a 70 out of 100 on perceived by the public sector. Scores range for 0 (highly corrupt) to 100 (very clean).  

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Business Protocol in France

  • French business behavior emphasizes courtesy and a degree of formality. Creating a wide network of close personal business alliances is very important.
  • If you do not speak French, an apology for not knowing their language may aid in developing a relationship. It is always a good idea to learn a few key phrases, since it demonstrates an interest in a long-term relationship.
  • The French will carefully analyze every detail of a proposal, regardless of how minute. Business is hierarchical. Decisions are generally made at the top of the company.
  • Business dress is understated and stylish. Men should wear dark-colored, conservative business suits. Women should wear either business suits or elegant dresses.

More information on Business Protocol:

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Sources for further information on doing business in France

American Chamber of Commerce in France

Embassy of France in Washington

Embassy of the United States, Paris, France

FITA Country Profile France

French-American Chamber of Commerce in New York City (Note there are French-American Chambers of Commerce all over the United States.)

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This information is provided by ABC-Amega Inc. Providing international receivable management and debt collection services for exporters to more than 200 countries including France. For further information, contact info@abc-amega.com.

This report represents a compilation of information from a wide variety of reputable sources.

Comparative Economic Indicators: CIA World Factbook

Risk Assessment information: Coface Country Rating and Ducroire/Delcredere.

Exchange Rates: OANDA.com The Currency Site.

Other information is provided by sites including FITA.