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France: Market Profile

Picture: France factsheet
Picture: France factsheet

1. Overview

France supports multilateral efforts aimed at promoting human and economic development, reducing poverty, and promoting prosperity that is shared throughout the world. The French economy has rebounded since the beginning of 2015. While soft oil prices and tax cuts for low income earners has been favourable to private consumption, easing credit conditions as well as the recent supportive economic strategies, such as the progressive reduction of the corporate income tax rate from 33.3% to 25%, the increase of the tax credit for employment and competitiveness (CICE) and the over-amortisation scheme, are conducive to private investment. Future growth will be aided further by a strong recovery in the housing market and improving exports. Although President Macron is succeeding at present with the implementation of his domestic economic reform agenda, the measures will take time to filter through to stronger growth and the agenda is vulnerable to political or social instability.

Source: Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

April 2017
Former economy minister Emmanuel Macron decisively beat the National Front's Marine Le Pen in the presidential election. Neither of the two main parties, the Socialists and Republicans, made it into the run-off round.

June 2017
President Macron's new movement, La Republique En Marche!, won an overall majority in parliamentary elections.

September 2017
President Macron signed into law changes to the labour code designed to make it easier for companies to hire and fire workers.

April 2018
Rail workers announced a three-month strike.

June 2018
National railway operator Societé National Chémin des Fers (SNCF) announced plans to revamp Gare du Nord station in Paris, with a view to prepare for the Olympic Games set to take place in 2024. The EUR600 million overhaul will be carried out in collaboration with real estate developers.

President Macron’s government plans to implement structural reforms in 2019 as outlined in the 2019 budget plan that includes a EUR6 billion cut in household taxes, with overtime pay and a housing tax set to be axed in September 2019.

Sources: BBC country profile – Timeline, Fitch Solutions

3. Major Economic Indicators

Graph: France real GDP and inflation
Graph: France real GDP and inflation
Graph: France GDP by sector (2017)
Graph: France GDP by sector (2017)
Graph: France unemployment rate
Graph: France unemployment rate
Graph: France current account balance
Graph: France current account balance

e = estimate, f = forecast
Sources: IMF, World Bank, Fitch Solutions
Date last reviewed: October 22, 2018

4. External Trade

4.1 Merchandise Trade

Graph: France merchandise trade
Graph: France merchandise trade

Source: WTO
Date last reviewed: October 22, 2018

Graph: France major export commodities (2017)
Graph: France major export commodities (2017)
Graph: France major export markets (2017)
Graph: France major export markets (2017)
Graph: France major import commodities (2017)
Graph: France major import commodities (2017)
Graph: France major import markets (2017)
Graph: France major import markets (2017)

Sources: Trade Map, Fitch Solutions
Date last reviewed: October 22, 2018

4.2 Trade in Services

Graph: France trade in services
Graph: France trade in services

Source: WTO
Date last reviewed: October 22, 2018

5. Trade Policies

  • France has been a World Trade Organization (WTO) member since January 1, 1995, and a member of the General Agreement on Tariffs and Trade (GATT) since January 1, 1948. It is also a member state of the European Union (EU), which means that France incorporates EU regulatory norms. As a Eurozone member, it has also adopted the euro as its legal tender from January 1, 2002. While developing new draft regulations, the French government submits a copy to the WTO for review to ensure that the prospective legislation is not inconsistent with its WTO obligations.

  • In December 2016, EU states agreed on a proposal to modernise the EU's trade defence instruments, with a view to shielding EU producers from damage caused by unfair competition. The proposed regulation amends current anti-dumping and anti-subsidies regulations to better respond to unfair trade practices, and furnishes Europe's trade defence instruments with more transparency, quicker procedures and more effective enforcement. In exceptional cases such as in the presence of distortions in the cost of raw materials, it will enable the EU to impose higher duties through the limited suspension of the lesser duty rule.

  • Trade bureaucracy and customs delays are a significant hindrance to foreign investors, particularly those outside of the EU. Though there are increasing efforts to reduce trade bureaucracy, paper-based procedures remain cumbersome and costs and connectivity issues add to market barriers.

  • In 2016, the European Commission (EC) introduced an import-licensing regime for steel products exceeding 2.5 tonnes. The regulation will be active until May 15, 2020. In early 2015, the EC issued regulations on trade restrictions on cattle, beef, watermelons and prepared tomatoes with Turkey. This will help to protect domestic agriculture and regional farming businesses.

  • The EU, in order to protect domestic industries, has imposed various anti-dumping measures on a wide range of products, predominantly in the areas of textiles, machine parts, steel, iron and machinery on goods coming from mainland China and a few other Asian nations. Currently, there are a number of mainland China-origin products subject to the EU's anti-dumping duties, including bicycles, bicycle parts, ceramic tiles, ceramic tableware and kitchenware, fasteners, ironing boards and solar glass, which are of interest to Hong Kong and regional exporters. In November 2016, the EC imposed a provisional anti-dumping duty on imports of some primary and semi-processed metals from mainland China. The rate of duty is between 43.5% and 81.1% of the net, free-at-Union-frontier price before duty, depending on the company. By way of comparison, the rate of duty for similar goods from Belarus is 12.5% of the net, free-at-Union-frontier price before duty. As at end October 2018, the EU is not applying any anti-dumping measures on imports from Hong Kong.

  • The EU is party to some 50 free trade agreements (FTAs) and, consequently, access to other markets of the countries concerned is mediated through those agreements. The EU's scheme on generalised system of preferences (GSP) entered into effect on January 1, 2014. Under the scheme, tariff preferences are removed for imports into the EU from countries where per capita income has exceeded USD4,000 for four years in a row. As a result, the number of countries that enjoy preferential access to EU markets was reduced from 176 to less than 80. While the mainland China remains a beneficiary, many of its exports such as toys, electrical equipment, footwear, textiles, wooden articles, and watches and clocks have already been graduated' from the preferential treatment. Hong Kong has been fully excluded from the EU's GSP scheme since May 1, 1998.

  • Nine types of goods imported into the EU are subject to licensing. These goods are (broadly): textiles; various agricultural products; iron and steel products; ozone-depleting substances; rough diamonds; waste shipment; harvested timber; endangered species; and drug precursors. No quotas are imposed on textiles and clothing exports, as well as non-textile products exports from Hong Kong and the mainland China at present.

  • To combat the spread of the Asian long-horned beetle, in July 1999 the EU introduced emergency controls on wooden packaging material originating in China. Wood covered by the measures must be stripped of its bark and free of insect bore holes greater than 3mm across, or have been kiln-dried to below 20% moisture content.

  • For health reasons, the EU has adopted a Directive on the control of the use of nickel in objects intended to be in contact with the skin, such as watches and jewellery. The EU has also adopted a Directive to ban the use of some phthalates in certain PVC toys and childcare articles on a permanent basis, which came into effect from January 16, 2007. In addition, the EU has adopted a Directive to prohibit the trading of clothing, footwear and other textile and leather articles which contain azo-dyes, from which aromatic amines may be derived.

  • The EU has adopted a number of Directives for environmental protection, which may have an impact on the sales of a wide range of consumer goods and consumer electronics. Notable examples include the Directive on Waste Electrical and Electronic Equipment (WEEE) implemented in August 2005, and the Directive on Restriction of Hazardous Substances (RoHS) implemented in July 2006. On December 3, 2008, the EC presented two proposals: one for a recast RoHS Directive and the other for a recast WEEE Directive. The recast RoHS Directive was published on July 1, 2011 and entered into force on January 2, 2013. The new Directive continues to prohibit EEE that contains the same six dangerous substances as the old RoHS Directive. From July 22, 2019, the new Directive will widen the current scope of the previous RoHS Directive by including any EEE that will have fallen out of the old RoHS Directive's scope, with only limited exceptions.

  • Another important law for foreign companies to grapple with concerns waste EEE (the WEEE Directive). With the formal approval on June 7, 2012, the recast WEEE Directive entered into force on August 13, 2012. In brief, the recast WEEE Directive subjects member states to higher collection/recycling targets (a 45% collection rate as of 2016 and 65% from 2019) and a wider scope of measure covering essentially all electric and electronic equipment, while establishing producer responsibility as a means of encouraging greener product designs. On the heels of the recast RoHS and WEEE Directives, the EU's new framework Directive for setting eco-design requirements for energy-related product (ErP) is now in place. The ErP Directive is no longer limited to EEE (as it was under its predecessor, the energy-using product, or EuP Directive), but potentially covers any product that is related to the use of energy, including shower heads and other bathroom fittings, as well as insulation and construction materials.

  • REACH, an EU Regulation which stands for Registration, Evaluation, Authorisation and Restriction of Chemicals, entered into force in June 2007. Among others, it requires EU manufacturers and importers of chemical substances (whether on their own, in preparations or in certain articles) to gather comprehensive information on properties of their substances produced or imported in volumes of one tonne or more per year, and to register such substances prior to manufacturing in or import into the EU.

Sources: WTO - Trade Policy Review, Fitch Solutions

6. Trade Agreement

6.1 Trade Updates

As a member of the EU, France is party to the same trade agreements as its 27 peer states. The region negotiates and enters into trade agreements as a collective due to the single market nature of the union.

6.2 Multinational Trade Agreements


  1. EU: The EU comprises 28 member states and France has been a member since January 1, 1958, which means that it has adopted the EU's common external trade policy and measures and that it benefits from tariff-free trade with its 27 peers across Europe, namely: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and (currently) the United Kingdom. These 28 member nations constitute a 'common market' in which the transfer of capital, goods, services or labour between member nations enjoy 'free movement'. As France's main trade partners are in the EU, the absence of customs charges with member countries greatly enhances its trade volumes.

  2. European Economic Area-EU-European Free Trade Association: While this agreement enhances trade flows, of the four countries in the European Free Trade Association (EFTA), only Switzerland is a fairly major trading partner. The European Economic Area (EEA) unites the EU member states and the EFTA states (Iceland, Liechtenstein, Norway and Switzerland) into an Internal Market governed by the same basic rules. These rules aim to enable goods, services, capital and persons to move freely about the EEA in an open and competitive environment, a concept referred to as the four freedoms.

  3. EU-Turkey Customs Union Agreement: The customs union membership agreement with the EU that came into force on December 31, 1995 provides tariff-free access to the European market for Turkey, benefitting both exporters and importers. As Turkey has steady trade flows with France, this has enhanced trade links between the two countries.

  4. EU-Canada Comprehensive Economic and Trade Agreement (CETA): CETA, which entered into force on September 21, 2017, is expected to strengthen trade ties between the two regions. Some 98% of trade between Canada and the EU will be duty-free under CETA. The agreement is expected to boost trade between partners by more than 20%. The EU expects CETA to improve trade in goods and services between the two regions, while at the same time boosting FDI. CETA also opens up government procurement. Canadian companies will be able to bid on opportunities at all levels of the EU government procurement market and vice-versa. CETA means that Canadian provinces, territories and municipalities are opening their procurement to foreign entities for the first time, albeit with some limitations regarding energy utilities and public transport.

Ratification Pending

  1. EU-Japan Economic Partnership Agreement (EUJEPA): In July 2018, the EU and Japan signed a trade deal that promises to eliminate 99% of tariffs that cost businesses in the EU and Japan nearly EUR1 billion annually. According to the European Commission, EUJEPA will create a trade zone covering 600 million people and nearly a third of global GDP. The result of four years of negotiation, EUJEPA was finalised in late 2017 and is expected to come into force by the end of the current mandate of the EC in 2019. The total trade volume of goods and services between the EU and Japan is EUR86 billion, and EUJEPA is expected to increase total exports to Japan by EUR13 billion by 2035 and to boost sectors such as agri-food, textiles and leather products. The key parts of the agreement will cut duties on a wide range of agricultural products and it seeks to open up services markets, in particular financial services, e-commerce, telecommunications and transport. As of October 2018, the agreement is awaiting ratification by the European Parliament and the Japanese Diet, following which it could enter into force in 2019. At the same time, negotiations with Japan continue on investment protection standards and investment protection dispute resolution.

  2. SADC-EU Economic Partnership Agreement: An agreement was signed between the EU and the Southern African Development Community (SADC) on June 10, 2016, and it is awaiting ratification. SADC consists of Botswana, Lesotho, Mozambique, Namibia, South Africa, Swaziland, Angola, Comoros, Democratic Republic of the Congo, Madagascar, Malawi, Mauritius, Seychelles, Tanzania, Zambia and Zimbabwe.

  3. Central America-EU Association Agreement: This agreement between the EU and Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama was first signed on June 29, 2012, and is awaiting ratification.

Under Negotiation

  1. EU-United States Transatlantic Trade and Investment Partnership: This agreement was expected to increase trade and services, but talks were suspended in 2017 under the Trump administration in the United States and in June 2018, the United States imposed a 25% tariff on steel and a 10% tariff on aluminium products.

  2. EU-Australia Trade Agreement: The EU is Australia's second-largest trade partner and on May 22, 2018, the Council of the EU authorised the opening of negotiations for a comprehensive trade agreement with Australia. Bilateral trade in goods between the two partners has risen steadily in recent years, reaching almost EUR48 billion in 2017, while bilateral trade in services added an additional EUR27 billion. The negotiations aim to remove trade barriers, streamline standards and put European companies exporting to or doing business in Australia on an equal footing with those from countries that have signed up to the Trans-Pacific Partnership or other trade agreements with Australia.

Sources: WTO Regional Trade Agreements database, European Commission, Breugel, Fitch Solutions

7. Investment Policy

7.1 Foreign Direct Investment

Graph: France FDI stock
Graph: France FDI stock
Graph: France FDI flow
Graph: France FDI flow

Source: UNCTAD
Date last reviewed: October 22, 2018

7.2 Foreign Direct Investment Policy

  1. Foreign and domestic private entities have the right to establish and own business enterprises and engage in all sorts of remunerative activities. France is committed to encouraging foreign investment. In the current economic climate, the French government sees foreign investment as a way to create jobs and stimulate growth. Investment regulations are simple, and a range of financial incentives are available to foreign investors. France’s membership of the EU and the Eurozone facilitates the efficient movement of people, services, capital, and goods. Foreign firms account for one third of France’s manufacturing, 30% of goods and services exports, and have increased corporate R&D expenditures by 32%.

  2. The French investment regime is said to be among the least restrictive in the world. With a few exceptions in certain specified sectors, there are no statutory limits on foreign ownership of companies. Foreign entities have the right to establish and own business enterprises, and engage in all forms of remunerative activity. The government cannot legally expropriate property to build public infrastructure without fair market compensation.

  3. France welcomes foreign investment and has a stable business climate that attracts investors from around the world. The French government devotes significant resources to attracting foreign investment through policy incentives, marketing, overseas trade promotion offices, and investor support mechanisms. France has an educated population, first-rate universities, and a talented workforce. It has a modern business culture, sophisticated financial markets, strong intellectual property protections, and innovative business leaders. The country is known for its world-class infrastructure, including high-speed passenger rail, maritime ports, extensive roadway networks and public transportation, and efficient intermodal connections. High speed (3G/4G) telephony is nearly ubiquitous.

  4. In April 2015 France launched its programme for building France's industrial future, with the goal to modernise France's production tools and provide support for manufacturers as the digital changeover transforms their business models, organisations and the way they design and market their products. The New Industrial France programme (La Nouvelle France Industrielle, NFI) is based on nine industrial solutions that provide real-world responses to key economic and social challenges: data economy, smart objects, digital trust, smart food production, new resources, sustainable cities, eco-mobility, medicine of the future and transport of tomorrow. These nine solutions will position French businesses for tomorrow's markets in a world in which digital technology is erasing the boundary between industry and services. The accompanying report, Key Technologies 2020, presented a list of 47 key technologies in which French companies need to be present within 5-10 years in order to maintain a competitive advantage and uphold the appeal of France in growth markets. These key technologies provide a medium-term direction for the development of New Industrial France solutions. The second phase of the programme was launched in May 2015 by the then Minister for the Economy, Industry and Digital Affairs, Emmanuel Macron.

  5. France updated the New Industrial France programme in 2016 to define France's industrial policy priorities in the form of 34 sector-based initiatives that will be the focal point of France's efforts and the starting point for its industrial renewal. The initiatives include: developing the next generation TGV (high-speed train); an affordable fully electric car for all; the first fully electric passenger airplane; efficient, low-emissions ships; more powerful and longer-lasting batteries; electricity charging stations; 'intelligent' fabrics; thermally efficient building renovation; nano-electronics; augmented reality; connected objects; robotics; electrically propelled satellites; cloud computing; and cyber security.

  6. The French Government’s Direction Generale des Entreprises launched the second phase of Innovation 2030 program in December 2016 via a global contest called the ‘Worldwide Innovation Challenge’, open to all entrepreneurs investing in France regardless of nationality. Up to 30 projects have been selected for the 2017 theme ‘Risk Reduction’ and received between EUR1 million and EUR3 million in start-up funding.

  7. Business France and other government agencies are particularly nurturing of foreign investment in tech sectors. The French government has developed a brand ‘French Tech’ to promote the development of France’s tech sector and promote France as a location for start-ups and high-growth digital companies, with the goal of turning France into a ‘Start-Up Republic’. The French Tech initiative includes an ‘acceleration’ investment by the French government of EUR 200 million to foster start-up ecosystems in and outside France. In addition to offices in 17 French cities, French Tech hubs are established in 22 cities globally including New York, San Francisco, Los Angeles, Shanghai, Hong Kong, Vietnam, Moscow and Berlin.

  8. French law stipulates that acquisitions in certain sectors deemed crucial to France’s national interests relating to public order, public security and national defence are subject to prior notification, screening, and approval by the Economy and Finance Minister. Other sectors requiring approval include energy infrastructure; transportation networks; public water supplies; electronic communication networks; public health protection; and installations vital to national security. As a recent example of how France’s government remains engaged in strategic sectors, in January 2017, the government sold 100 million shares in Engie. The French government now owns 28.7% of the energy utility and controls 32.6% of the voting rights. The French state owns 83.1% of Electricite de France (EDF) and has reserved the right to retain a golden share in any restructuring of Areva, the French nuclear and renewable energy company.

  9. National security and defence are the main reasons given for why the French government must review any investment in specified sectors that involves the acquired control of a French firm, surpasses a 33.33% ownership threshold, or involves any part of such a firm that has established headquarters in France.

  10. The French government imposes the same conditions on domestic and foreign investors in cultural industries: all purveyors of movies and television programs (i.e., television broadcasters, telecoms operators, internet service providers and video services) must invest a percentage of their revenues to finance French film and television productions. They must also abide by broadcasting content quotas (minimum 40% French, 20% EU).

  11. Investments in France by other EU member states are governed by the provisions of the Treaty of Rome and by EU Law. France has Bilateral Investment Treaties (BITs) with 95 countries around the world. BITs between France and the following countries have been signed but are not in force: Angola, Belarus, Brazil, Colombia, Ghana, Guinea, Iraq, Mauritius and Zimbabwe. France previously had a BIT with Syria; a new BIT has been signed but has not yet entered into force.

  12. While there are no mandatory performance requirements established by law, the French government will generally require commitments regarding employment or R&D from both foreign and domestic investors seeking government financial incentives. Incentives such as PAT regional planning grants (Prime d'Aménagement du Territoire pour l’Industrie et les Services) and related R&D subsidies are based on the number of jobs created, and authorities have occasionally sought commitments as part of the approval process for acquisitions by foreign investors. PAT has been revised to benefit SMEs with the objective of promoting the development of businesses in priority regional zones, including EUR30 million in direct government subsidies.

Sources: WTO – Trade Policy Review, ITA, US Department of Commerce, UNCTAD, French Treasury in the US, Le portail de l'Économie, des Finances, de l'Action et des Comptes Publics

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
Free Zone of Le Verdon - Port de Bordeaux (Zone Franche du Verdon - Port de Bordeaux)

The Port of Bordeaux is the focal point for agricultural and industrial trade in southwest France. Its imports include chemical and petroleum products, fertilisers, and animal feed. Exports are dominated by grains, forest products, and oilseeds.
The Port of Bordeaux has trade relationships with 300 world ports. It boasts modern facilities to serve the busy cargo volume including six dedicated cargo-handling terminals. Free economic zone, designated areas in which companies are taxed very lightly or not at all in order to encourage economic activity. Free trade zone, an area in which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of customs authorities.
Investment incentivesThe government provides corporate investors incentives for capital investment in small companies. Under the plan, a French company or French subsidiary of a foreign company that invests in a minority shareholding (less than 20%) in a small, innovative SME, either directly or indirectly (ie through a fund), would benefit from a five year, linear amortization of their investment. To qualify, SMEs must allocate at least 15% of their spending on research.
R&D incentivesR&D continues to be a major component that attracts foreign investment. International companies may join France’s 71 innovation clusters increasing access to both production inputs and technical benefits of geographical proximity. The Research Tax Credit (Crédit Impôt Recherche), innovative new company status (Jeune Enterprise Innovante), National Investment Program, and La French Tech form part of this innovation policy. Additional programmes include La French Tech Ticket and the French Young Entrepreneurs Initiative. The Research Tax Credit (Crédit Impôt Recherche - CIR) offsets R&D expenditures undertaken by both domestic and foreign firms operating in France, regardless of size or business sector, covering both R&D spending and innovation expenses incurred by small and medium-sized enterprises.

The French government provides tax credits to support up to 30% of a firm’s first EUR100 million in R&D costs, and an additional 5% in credits above this threshold. Additionally an ‘innovation tax credit’ is available that reduces the cost of innovation expenditure by 20% up to EUR400,000. The research tax credit and innovation schemes have been set through 2017. La French Tech initiative supports the growth of start-ups and digital companies by providing funding under the umbrella of the National Investment Program. La French Tech accelerates the growth of start-ups throughout France, accrediting 17 French Tech cities in 2017, and investing EUR200 million in acceleration programmes for digital companies. Additionally, La French Tech aids in the internationalisation of start-ups and aims to attract foreign investors, corporations, start-ups, and talent.

French Tech Hubs in foreign cities help French companies to expand to the global marketplace. La French Tech Ticket is a Paris-based programme that focuses on bringing international start-ups to France by offering benefits which include a residence permit, a grant of EUR25,000 and free mentoring in a Parisian start-up incubator.
Other incentives: The use of patented or patentable technologies in manufacturingCompanies that are involved in the manufacturing of products in France containing patented or patentable technologies, or companies that incorporate such technologies into goods that are manufactured in France, benefit from a reduced effective rate of tax. In the case of a licensing arrangement between connected French companies, the licensor will benefit from a reduced 15% tax rate on royalty income, whereas the licensee company will benefit from a tax deduction at 33.33%. In order for a licensee company to benefit from full deductibility for royalties paid, the rules require that the licensee company ‘effectively exploits’ the rights available to it. No particular incentives are available to foreign investors in France.

However, the government offers a comprehensive programme of tax incentives and development subsidies to encourage investment in underdeveloped areas. Capital investment is encouraged through the declining-balance method of depreciation as well as through exceptional depreciation for certain capital expenditures.

Source: Fitch Solutions

8. Taxation – 2018


9. Foreign Worker Requirements

9.1 Foreign Worker Permits

Non-EU member citizens require a work permit in order to work within the country; EU member citizens do not require a work permit, but their employer must inform the job office about their being hired. Citizens of the European Economic Area (with EU member states, Iceland, Norway and Lichtenstein) and Switzerland do not require a visa to enter, reside and work in the country. No work permit is needed by foreigners from outside the EU if they have a permanent residence or family reunion permit, have been granted asylum, study in France or have a Blue Card.

Employers must first apply for a permit to hire foreign workers. A permit is granted once no suitable candidate can be found in France or in other EU member states. The vacant position must be reported to the local district Labour Office and cannot be changed at a later stage to fit the profile of a potential employee. The candidate must then apply for a work permit. The government issues the permit for a maximum of two years, which can be repeatedly prolonged, but always for a maximum of two years and may be renewed as many times as needed. The permit process takes an average of one month.

9.2 The Blue Card

The Blue Card is intended for any stay associated with highly qualified employment. A foreigner holding a Blue Card may reside in France and work in the job for which the Blue Card was issued, or change that job under the conditions defined. High qualification means a duly completed university education or higher professional education, which has lasted for at least three years. The Blue Card is issued with the term of validity three months longer than the term for which the employment contract has been concluded, but for a maximum period of two years. The Blue Card can be extended. One of the conditions for issuing the Blue Card is a wage criterion – the employment contract must stipulate a gross monthly or yearly wage that is at least a 1.5 multiple of the gross average annual wage.

9.3 Short-term Work Visas

Short-term Work Visas can be granted by the embassy upon application for a maximum period of 90 days, which can be used within 180 days. The visa must be for the purpose of employment and the application must be submitted, beside general requirements, with a work permit, employment contract and proof of having secured accommodation.

9.4 Localisation Requirements

In order to foster better integration of legal migrants, the French government has doubled the amount of free French language lessons available to new arrivals to 400 hours and it has extended civic training lessons to teach French values and offer practical support on finding a job.

9.5 Visa/Travel Restrictions

France is one of 26 countries in the Schengen border-free area, which means that there is one common visa and no border controls. All non-EU/EEA/Swiss nationals who wish to stay in France for longer than 90 days will need to apply for a long-term French visa. Holders of a long-stay visa need to contact the French Immigration and Integration Office immediately upon arrival in France.

Sources: France Diplomatie, France-Visas, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings

Rating (Outlook)Rating Date
Aa2 (Positive)
S&P GlobalAA (Stable)
Fitch Ratings
AA (Stable)20/07/2018

Sources: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators

World Ranking
Ease of Doing Business Index
Ease of Paying Taxes Index
Logistics Performance Index
Corruption Perception Index
IMD World Competitiveness28/61

Sources: World Bank, IMD, Transparency International

10.3 Fitch Solutions Risk Indices

World Ranking
Economic Risk Index Rank18/202
Short-Term Economic Risk Score
Long-Term Economic Risk Score72.774.674.8
Political Risk Index Rank29/202
Short-Term Political Risk Score
Long-Term Political Risk Score82.380.680.6
Operational Risk Index Rank22/201
Operational Risk Score67.870.572.3

Source: Fitch Solutions
Date last reviewed: October 22, 2018

10.4 Fitch Solutions Risk Summary

In 2017 the French economy grew at its fastest pace since 2011, aided by a cyclical upswing in the Eurozone and strong business confidence, the latter of which is being supported by President Macron's structural reform agenda. Macron's reform drive is aimed at addressing factors that have largely been responsible for France's economic underperformance over the past few years. That said, many of the reforms will take a number of years to be implemented and fully filter through to stronger growth.

The French economic model, historically characterised by high levels of public spending and progressive taxation, generous welfare provisions and persistent fiscal deficits, is likely to persist but increasingly come under pressure. In 2017 President Macron pushed forward with an ambitious reform agenda, which is already bearing fruit in areas such as labour market liberalisation.

Source: Fitch Solutions
Date last reviewed: October 30, 2018

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: France short term political risk index
Graph: France short term political risk index
Graph: France long term political risk index
Graph: France long term political risk index
Graph: France short term economic risk index
Graph: France short term economic risk index
Graph: France long term economic risk index
Graph: France long term economic risk index

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Economic and Political Risk Indices
Date last reviewed: October 22, 2018

10.6 Fitch Solutions Operational Risk Index

Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
France Score72.360.270.383.175.5
Developed States Average73.063.370.976.281.8
Developed States Position (out of 27)181617622
Developed States Average73.063.370.976.281.8
Developed States Position (out of 27)1816176
Global Average49.649.749.949.149.8
Global Position (out of 201)22

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: France vs global and regional averages
Graph: France vs global and regional averages
Operational Risk IndexLabour Market Risk Index
Trade and Investment Risk IndexLogistics Risk IndexCrime and Security Risk Index
New Zealand77.573.075.772.089.4
United States76.979.075.282.870.5
Isle of Man63.862.061.849.282.3
Developed Markets Averages73.063.3
Global Markets Averages49.649.7

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: October 22, 2018

11. Hong Kong Connection

11.1 Hong Kong’s Trade with France

Graph: Major export commodities to France (2017)
Graph: Major export commodities to France (2017)
Graph: Major import commodities from France (2017)
Graph: Major import commodities from France (2017)

Note: Graph shows the main Hong Kong exports to/import from France (by consignment)
Date last reviewed: October 22, 2018

Graph: Merchandise exports to France
Graph: Merchandise exports to France
Graph: Merchandise imports from France
Graph: Merchandise imports from France

Note: Graph shows Hong Kong exports to/import from France (by consignment)
Exchange Rate HK$/US$, average
7.76 (2013)
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: October 22, 2018

Growth rate (%)
Number of French residents visiting Hong Kong204,130
Number of French residing in Hong Kong2,2280.02

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs - Population Division

Growth rate (%)
Number of European residents visiting Hong Kong1,929,824
Number of developed state citizens residing in Hong Kong65,6801.5

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs - Population Division, Fitch Solutions
Date last reviewed: October 22, 2018

11.2 Commercial Presence in Hong Kong

Growth rate (%)
Number of French Companies in Hong Kong343
- Regional headquarters81
- Regional offices101-7.3
- Local offices1615.9

Source: Hong Kong Census and Statistics Department

11.3 Treaties and agreements between Hong Kong and France

  • Double Taxation Agreement (effective date: December 1, 2011)
  • Investment Promotion and Protection Agreement (effective date: May 30, 1997)
  • BIT (effective date: May 30, 1997)

Sources: Hong Kong Inland Revenue Department, Hong Kong Trade and Industry Department, UNCTAD

11.4 Chamber of Commerce (or Related Organisations) in Hong Kong

The French Chamber of Commerce and Industry in Hong Kong
Address: 21/F, On Hing Building, 1 On Hing Terrace, Central, Hong Kong
Tel: (852) 2294 7721
Fax: (852) 2525 1428

Source: French Chamber of Commerce and Industry in Hong Kong

Consulate General of France in Hong Kong and Macau
Address: 25/F & 26/F, Tower II, Admiralty Centre, 18 Harcourt Road, Admiralty, Hong Kong
Email: informations@consulfrance-hongkong.org
Tel: (852) 3752 9900
Fax: (852) 3752 9901

Source: Consulate General of France in Hong Kong and Macau

11.5 Visa Requirements for Hong Kong Residents

Hong Kong residents do not need a visa to the Schengen area for a stay of up to 90 days in any 180-day period.

Sources: Immigration Department, Government of Hong Kong
Date last reviewed: October 22, 2018

Content provided by Picture: Fitch Solutions – BMI Research
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