Country Risk: France

toc

Official Name: French Republic

Internet Domain: .fr
International Dialing Code: +33

Table of Contents

Location and Size

Located in Western Europe, France is the second largest country on the continent, with an area of 212,935 square miles.

Government

France’s government is a Republic, which exercises executive power in the French Republic.  The branches of government are as follows:

• Executive: Chief of State: President Emanuel MACRON; Prime Minister: Edouard PHILIPPE.
• 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.

People

France today is one of the most modern countries in the world and is a leader among European nations. It plays an influential global role as a permanent member of the United Nations Security Council, NATO, the G-7, the G-20, the EU, and other multilateral organizations.

• Population: 67,848,156 (July 2020 est.)
• Population Growth Rate: 0.35% (2020 est.)
• Languages: French (official) 100%
• Literacy: 99.9% (2020)
• Ethnic Make-Up: Celtic and Latin with Teutonic, Slavic, North African, Indochinese, Basque minorities
• Religions: Christian (overwhelmingly Roman Catholic) 63-66%, Muslim 7-9%, Buddhist 0.5-0.75%, Jewish 0.5-0.75%, other 0.5-1.0%, none 23-28% (2015 est.)

Economy

France is the world’s sixth-largest economy. It has substantial agricultural resources, a large industrial base, and a highly skilled workforce. 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 (2020): Germany 14.8%, Spain 7.7%, Italy 7.5%, US 7.2%, UK 7%, Belgium 7%.

Leading Exports – Commodities: Machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages

Leading Suppliers (2020): Germany 18.5%, Belgium 10.2%, Netherlands 8.3%, Italy 7.9%,  Spain 7.1%, UK 5.3%, US 5.2%, China 5.1%

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

Comparative Economic Indicators ” 2020

* 2017 Estimates
** PPP ” Purchasing Power Parity
*** 2019 Corruption Index: 10=Very Clean; 0=Highly Corrupt
**** 2020 Index of Economic Freedom: 100-80 = Free; 49.9-0-Repressed

Economic Data from CIA World Factbook
2019 Corruption Perceptions Index, Transparency International
2020 Index of Economic Freedom, Heritage Foundation

Risk Assessment

Coface Country Rating: A2 — 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.

Credendo Political Risk: 1 ” Lowest risk
Credendo Commercial Risk: C ” Above average risk

[Table of Contents]

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 66.0, making its economy the 64th freest (out of 179) in the 2020 Index of Economic Freedom. It is ranked 34th out of the 45 countries in Europe and its 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 2019 Global Corruption Perceptions Index (Transparency International) ranks at 23 out of 180 countries, and scored a 69 out of 100 on perceived by the public sector. Scores range for 0 (highly corrupt) to 100 (very clean).

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 formal dresses.

More information on Business Protocol: Kwintessential

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.)

[Table of Contents]

**********

Subscribe to the Credit-to-Cash Advisor
Monthly e-Newsletter — It’s Free

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 [email protected].

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 Credendo.

Exchange Rates: OANDA.com The Currency Site.

Other information is provided by sites including FITA.