March 2010 “ Innovation in France: Business & Research Opportunities with Lyon Urban Truck & Bus...

March 2010

“ Innovation in France: Business & Research Opportunities withLyon Urban Truck & Bus Cluster ”

© IFA

Keys to understanding the new France 2

An economy with a global outlook

In 2009, France was the 3rd leading FDI recipient in the world, topping the list of European countries, with US $ 65 billion of inflows (UNCTAD, January 2010)

Source: World Investment Report 2010, UNCTAD

France was the 3rd most popular destination in Europe in 2009 for the number of job-creating international investment projects

In 2009, foreign companies made 639 decisions to invest in France

39.2% of the equity of companies listed in the CAC 40 was under foreign ownership at the end of 2008 (€300 billion)

Top 7 FDI recipients in the world, 2009(US $bn)

135,9

90

65

41,437,8 36 35,1

0

20

40

60

80

100

120

140


A dynamic market at the heart of Europe

France is the 5th largest economy in the world, and the 2nd largest in Europe.

2

64.3 million inhabitants

3 million companies

40 French companies among the world’s leading 500

(Germany: 39; United Kingdom: 26)

After Tokyo, but ahead of Beijing and New York, Paris hosts

more head offices of Fortune Global 500 companies than any other city in the world.

79 million tourists Sou

rces

: IN

SE

E 2

009

– F

ortu

ne G

loba

l 500

(20

09)

– O

RB

IS A

ugus

t 20

09

Top 8 economies in the European UnionGDP in 2009 (current prices, US $bn)

Source: International Monetary Fund, “World Economic Outlook” database, April 2009 (Estimates)

$3,060

$2,499

$2,007$1,988

$1,397

$743$434 $403

0

500

1 000

1 500

2 000

2 500

3 000

3 500

Germ

any

France

United K

ingdom

Italy

Spain

Nether

lands

Belgiu

m

Poland


France has superb transport infrastructure:

European airport hub Paris Charles-de-Gaulle ranked 2nd by passenger numbers and 1st for cargo in Europe

2 ports in the European Top 10 by tonnage: Marseille (4th) and Le Havre (6th) in 2008

The longest high-speed rail network in Europe with 2,000km of lines and the highest number of international connections

The 3rd longest highway network in EU-27 countries (11,000km) and the 2nd best road network in the world after Singapore

Sources: ACI, July 2009 – Port of Rotterdam 2009 - UIC 2009 – ERF 2009 / WEF 2009/2010

Sou

rce:

Par

is R

egio

n E

cono

mic

Dev

elop

men

t A

genc

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anua

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009.

Rapid connections throughout Europe, North Africa and the Middle East


One of the most productive workforces in the world

Number of hours usually worked per week in 2008Source: Eurostat, EFT Series, 2009

France has the 3rd most productive workforce in the world after Norway and the United States according to the International Labour Organization (2007, 2008, 2009), or Luxembourg and Norway according to the IMD (2009).

* E

xclu

ding

the

pub

lic s

ecto

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Sou

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Average number of working days lost every year to strike action* per 1000 inhabitants (2005-2007)French managers work longer hours

than their European counterparts

39.2

40.2

43.6

45.145.9

47.147.7

48.448.448.949.7

35

37

39

41

43

45

47

49

51

France

Italy

Belgiu

mSpai

n

Germ

any

EU-27

United K

ingdom

Nether

lands

Sweden

Denm

ark

Norway

Managers

Active population

0.02 0.59 1.712.97

3.75.84

11.11

13.48

22.87

34.23

0

5

10

15

20

25

30

35

Japan

Swed

enNet

herla

ndsG

erm

any

France

United S

tate

s

United K

ingdom

Italy

Spain

Belgiu

m


Source: Atisreal, Europe Quarterly 2009 T1

Gross payroll costs in 2008(inc. all social security contributions, € per year)

Prime office rents in 2009 (m²/an)

Paris (centre): €720

London (centre): €988

Frankfurt: €438

Lyon: €230

DirectorR&D

EngineerSkilled Worker

GERMANY €187,380 €62,710 €41,665

FRANCE €173,280 €47,370 €30,650

UK €139,950 €31,250 €17,970

Germany: 0.13

France: 0.07

UK: 0.12

Consumption between 2,000 and 20,000 MWh

Some of the most cost-effective locations in Europe

Source: Eurostat, July 2009

Source: fDi Benchmark/FT 2009

France offers particularly attractive payroll, real estate and electricity costs compared to its leading Western European rivals.

Electricity rates for manufacturersin 2008 (€/kWh inc.

VAT)




According to KPMG, business setup and operating costs* are lower in France than in Germany, Italy, the UK and the Netherlands.

Cost index(Base: 100.00 – United States)

*Cost components:

Labor

Facility costs

Transport

Utility costs (electricity, natural gas,

telecommunications)

Corporate tax

Source: Competitive Alternatives, KPMG’s Guide to International Business Location, 2008

0

20

40

60

80

100

120

Mex

ico -

1st

Canad

a - 2

nd

United S

tate

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rd

Austra

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4th

France

- 5t

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United K

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h

Nether

lands

- 7th

Italy

- 8t

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Japan

- 9t

h

Germ

any

- 10t

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IMF: “France is on the move” Improving the flexibility of the labor market

Work contracts adapted to companies’ needs: introduction of a “defined objective” contract lasting 18 to 36 months; extended probationary periods for workers and management employees.

Introduction of a “mutual agreement” procedure to terminate contracts between an employee and an employer. Over 150,000 termination requests approved since July 2008.

Since 2008, employers and employees have had more freedom to negotiate their working hours at company level, whether it be concerning overtime hours or management work schedules.


A tax system which encourages investment

Abolition of local business tax on productive investments as of January 1, 2010

The most attractive Research Tax Credit in Europe

Favorable tax regime for expatriates: exemption from income tax on up to 50% of total remuneration

Boost for international cinema productions produced in France: 20% of production costs refunded in the form of a research tax credit or rebate

Green taxation to support the growth of green business:

- a “sustainable development” tax credit; an interest-free loan for household energy improvement works;

- introduction in 2010 of a carbon tax to guide household and corporate consumption patterns towards clean energies, creating new markets for environmentally friendly products and promoting innovation.

A competitive French corporate tax system

A favorable effective corporate tax rate*:

- on R&D operations: France is ranked 2nd, ahead of the United Kingdom (3rd) and

Germany (7th);

- on manufacturing operations: France is ranked 4th, ahead of the UK (5th) and

Germany (8th).

* rate which takes into account the tax bases in different countries

Source : KPMG, Competitive Alternatives, 2008


3 multi-year residence permits, valid 3 to 10 years “Skills and Expertise” residence permit, for foreign nationals undertaking an economic, cultural or scientific project in France.

The “Expatriate Employee” temporary residence permit, for foreign nationals working in France within a context of intra-group mobility.

A 10-year residence permit for foreign managers who have made an “exceptional economic contribution” to France, which is also extended to their family.These residence permits automatically give close family members the right to seek employment in France.

France welcome foreign investors

Improved tax information: A specific contact point has been set up to address requests from foreign taxpayers.


Innovation, innovation, innovation…

70 innovation clusters, stimulating shared public/ private research projects

Sources: IFA

5330 companies participating in the clusters

528 foreign companies

March 2010 “ Innovation in France: Business & Research Opportunities with Lyon Urban Truck & Bus...

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