Since 2017, the French government has been engaged in a vast program of structural reforms to transform the economy, the lives of businesses and to boost competitiveness. As a result, in 2020, France remained the most attractive European country to foreign investors for the second year in a row.

The national strategy is structured around four major areas of transformation: a new tax environment to encourage investment, an overhauling of France’s social model, administrative simplification and an acceleration of the ecological transition.

 Most of these far-reaching changes were introduced before the health crisis, allowing France today to show resilience, which has been well received by foreign investors. Emergency measures were implemented from the onset of the Covid-19 global health crisis to support businesses during the pandemic “regardless of what it costs” in the words of the French President Emmanuel Macron, and to help them restart more quickly as soon as normal economic activity started.

Choose France 2022 : 21 foreign companies, including 11 U.S.-based companies such as Eastman, Collins Aerospace, Pfizer, Mars and more, announced more than €4 billion investment in France.

These projects demonstrate:
◽ The contribution of foreign investors to France’s reindustrialisation, especially in strategic sectors such as health or ecological transition
◽ A renewed confidence in the French market potential
◽ France’s strong position in new technologies and its capacities to develop breakthrough technological solutions

To learn more about these investments, discover the press kit!

DISCOVER THE FLAGSHIP REFORMS IMPLEMENTED SINCE 2017

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A NEW TAX ENVIRONMENT TO ENCOURAGE INVESTMENT

  • A progressive lowering of the rate of corporate tax. In 2021, the corporate tax rate is 26.5% for almost all businesses.
  • Significant and lasting cuts to production taxes: €20 billion in production tax cuts (2021 and 2022, then €10 billion/year).
  • The research tax credit has been made permanent. France is ranked second among OECD countries for financing R&D.
  • Lower taxation on capital: a single capital gains tax rate of 30%.

OVERHAULING FRANCE’S SOCIAL MODEL
  • Reform in the labour market: collective performance agreement, simplifying dismissal on economic grounds and facilitating social dialogue led to a fall in the number of appeals to industrial tribunals as well as greater labor market flexibility.
  • Reforms to the apprenticeship and professional development system: two million people will be trained in five years (budget of €15 billion by 2022).
  • A permanent reduction in health insurance contributions: reduction of labor costs for salaries of up to €3,886 per month (minus six rating points for contributions).
  • Stimulating the employment of vulnerable groups: up to €15,000 for the hiring of employees living in priority neighborhoods and up to €8,000 per apprentices job.
  • Improving the purchasing power of employees: tax exemption on overtime for employees, abolition of housing tax, activity bonus.
  • Extension of the short-time working scheme and deployment of a long-term short-time working scheme to protect employees and employers who have experienced a fall in activity.
  • Transforming unemployment insurance and supporting jobseekers.
ADMINISTRATIVE SIMPLIFICATION AND FACILITATING SETTING UP SITES IN FRANCE
  • Bolstering the Action Plan for Business Growth and Transformation: simplifying business startups, a legal framework for initial coin offerings coin offerings (ICOs), simplifying profit-sharing and corporate simplifying profit-sharing and corporate participation.
  • A boost to the equity capital of micro-enterprises, SMEs and mid-size companies.
  • Calls for proposals to accelerate the creation or relocation of industrial activities in France as part of the « Relaunch France » initiative (second call ongoing)
  • Enshrining the right to amend errors, simplifying, and making all administrative procedures paperless.
  • Accelerating the implementation of industrial sites, simplifying public procurement: 78 ready-to-use sites
ACCELERATION OF THE ECOLOGICAL TRANSITION
  • A multi-year energy planning and a national low-carbon national low-carbon strategy aiming at achieving carbon neutrality by 2050
  • Limiting waste: transforming our linear economy (producing, consuming, throwing away) into a circular economy (end of single-use plastic packaging by 2040; 100% recycled plastic by 1/1/2025)
  • Government programs of a structural nature as part of the « Relaunch France » initiative: €200 million to reduce the environmental impact of ports, €4.7 billion for the modernization of the rail transport, €300 million for the rehabilitation of brownfield sites, financial support to boost energy efficiency and adapt industrial processes (€1.2 billion)…
  • Investing in the technologies of the future and innovating in the ecological transition : decarbonated hydrogen, decarbonation of the agri-food industry, transport and mobility (€11 billion between 2021 and 2022).

 

In 2020, France remained the leading Foreign Direct Investment destination in Europe with 985 projects.

EY, June 2021 (« Attractiveness: France in the race »)

« France Relance » : an ambitious economic stimulus plan to start building the France of 2030

The “France Relance” economic stimulus plan has come in addition to these schemes, providing further support over the next two years in strategic sectors and outlining French strategy until 2030. With a budget of €100 billion, including €40 billion in funding from the European Union, “Relaunch France” has a clear strategic objective: to start building the France of 2030 by transforming the economy, with a focus on three key areas:

Ecological transition: supporting the transition to a greener, more sustainable economy (€30 billion ring-fenced).

Competitiveness: creating the most favorable conditions for businesses to grow and protect jobs (€34 billion ring-fenced).

Cohesion: ensuring solidarity between generations, regions and all French citizens (€36 billion ring-fenced).

 


Useful Links and contacts

Business France

French Government

More on France’s pro-business reform agenda

France Relance: discover the French economic stimulus plan