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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.

Source: Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

May 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 La Republique En Marche! movement won an overall majority in parliamentary elections.

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

Source: 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
Source: International Monetary Fund, World Bank, Fitch Solutions
Date last reviewed: August 21, 2018

4. External Trade

4.1 Merchandise Trade

Graph: France merchandise trade
Graph: France merchandise trade

Source: WTO
Date last reviewed: August 21, 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)

Source: Trade Map, Fitch Solutions
Date last reviewed: August 29, 2018

4.2 Trade in Services

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

Source: WTO
Date last reviewed: August 21, 2018

5. Trade Policies

  • France has been a WTO member since January 1, 1995 and a member of GATT since January 1, 1948. It is also a Member State of the European Union. 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 World Trade Organisation for review to ensure 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 EC introduced an import licensing regime for steel products exceeding 2.5 tonnes. The regulation will be active until May 15, 2020. In Q215, 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 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 China and a few other Asian nations to protect domestic industries. Currently, there are a number of Chinese mainland-origin products subject to 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 antidumping duty on imports of the some primary and semi-processed metals from China. The rate of duty is between 43.5%-81.1% of the net, free-at-Union-frontier price before duty depending on the company. In the same vein, 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-December 2017, the EU did not apply any anti-dumping measures on imports from Hong Kong.
  • The EU’s new scheme on generalised system of preferences (GSP) entered into effect on January 1, 2014. Under the new 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 Chinese mainland 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.
  • No quotas are imposed on textiles and clothing exports, as well as non-textile products exports from Hong Kong and the Chinese mainland at present.
  • To combat the spread of the Asian long-horned beetle, the EU introduced in July 1999 emergency controls on wooden packaging material originating in the Chinese mainland. Wood covered by the measures must be stripped of its bark and free of insect bore holes greater than 3 mm 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. Following the emergency ban adopted in December 1999, the EU has 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 from September 2003 the trading of clothing, footwear and other textile and leather articles which contain azo-dyes, from which aromatic amines may be derived.
Source: 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

Active

  1. The European Union Common Market: The transfer of capital, goods, services, or labour between member nations enjoy 'free movement'; the common market extends to the 28 member nations of the EU, 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 the United Kingdom. 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 (Iceland, Liechtenstein, Norway and Switzerland): While it enhances trade flows between these countries and France, only Switzerland is a major trading partner.

  3. EU-Turkey - The customs union with the EU provides tariff-free access to the European market for Turkey, benefitting both exporters and importers. As Turkey has steady trade flows this has enhanced trade links between the two countries.

Provisionally Active

The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada: CETA has been ratified by Canada and the European Parliament, but not by all the EU states. This means that it is only provisionally in force. Once fully in force, CETA is expected to strengthen trade ties between the two regions, having come into effect in 2016. 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%. CETA will improve trade in goods and services between the two countries, 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 Trade Agreement - 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, the EU-Japan Economic Partnership Agreement (EPA) will create a trade zone covering 600 million people and nearly a third of global GDP. The result of four years of negotiation, the EPA was finalised in late 2017 and is expected to come into force by the end of the current mandate of the European Commission in 2019. The total trade volume of goods and services between the EU and Japan is EUR86 billion. 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 August 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 (Botswana, Lesotho, Mozambique, Namibia, South Africa, Swaziland, Angola, Comoros, Democratic Republic of the Congo, Madagascar, Malawi, Mauritius, Seychelles, Tanzania, Zambia, Zimbabwe) - An agreement between parties was reached in 2016 and is awaiting ratification, with 13 of the 35 needed states having ratified the agreement as of April 2018.

  3. Central America-EU Association Agreement (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Belize, and Dominican Republic) - An agreement between the parties was reached in 2012 and is awaiting ratification (29 of the 34 parties have ratified the agreement as of April 2018).
Source: WTO Regional Trade Agreements database

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: August 21, 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. France updated the New Industrial France programme (La nouvelle France Industrielle) in 2016 targeting 47 priority industrial sectors, such as 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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).

  10. Investments in France by other EU member states are governed by the provisions of the Treaty of Rome and by European Union Law. France has Bilateral Investment Treaties (BITs) with 96 countries around the world. Bilateral Investment Treaties between France and the following countries have been signed but are not in force: Belarus, Brazil, Chad, Colombia, Ghana, Iraq, Kenya, and Zimbabwe. France previously had BITs with Mauritius and Syria; new BITs with these two countries have been signed but have not yet entered into force.

  11. 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, the International Trade Administration (ITA), U.S. Department of Commerce

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.
Research and Development (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

  • Value added tax: up to 20%
  • Corporate income tax: up to 33.33%

Source: PwC Tax Summaries 2018

8.1 Important Updates to Taxation Information

  • Recognising that French corporate taxes are higher compared to those in other leading industrial countries, the government plans to gradually reduce the nominal corporate tax rate from 33% to 25% by 2022. New and small businesses are likely to benefit from this rate.
  • On March 20, 2018, the French and Luxembourg governments signed a new Double Tax Treaty, together with an accompanying Protocol.

8.2 Business Taxes

Type of TaxTax Rate and Base
Corporate Income Tax Rate33.33%
Capital Gains Tax Rate15/19/30/33.33%
Withholding Tax: Dividends30/75%
Branch Tax33.33%
Branch Remittance Tax30%
VAT/GST (standard)0/2.1/5.5/10/20%
Territorial Economic Contribution3% (capped to a certain amount of the value added by the company; maximum rate)
Other tax notes:Pursuant to the action plan released by the French Prime Minister in September 2017, the French corporate income tax (CIT) rate cuts will apply over a five-year period as follows (for all companies with revenues exceeding EUR7.3 million):

- For tax years beginning on or after January 1, 2018, the standard CIT rate for all companies will be 28% on taxable income up to EUR500,000, and 33, 1/3% on taxable income exceeding that amount
- For tax years beginning on or after January 1, 2019, the standard CIT rate for all companies will be 28% on taxable income up to EUR500,000, and 31% on taxable income exceeding that amount
- For tax years beginning on or after January 1, 2020, the standard CIT rate for all companies will be 28%
- For tax years beginning on or after January 1, 2021, the standard CIT rate for all companies will be 26.5%
- For tax years beginning on or after January 1, 2022, the standard CIT rate for all companies will be 25%

The CICE (“Crédit d’Impôt Compétitivité-Emploi”) tax credit is calculated as a percentage of wages paid during a calendar year to employees earning less than 2.5 times the French minimum wage. For wages paid on or after January 1, 2018, the 2018 Act reduces the CICE tax credit rate from 7% to 6%.

For wages paid on or after January 1, 2019, the CICE tax credit is repealed and replaced by a permanent decrease in payroll charges paid by employers to finance the French social security system.

Source: PwC Tax Summaries 2018
Date last reviewed: August 29, 2018

9. Foreign Worker Requirements

9.1 Working Permit

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 blue or green cards.

9.2 Obtaining Foreign Worker Permits

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 maximum of two years, which can be repeatedly prolonged, but always for maximum of two years and may be renewed as many times as needed. The permit process takes an average of one month.

9.3 Green Card

The Green Card system only applies to citizens from the following nations: Australia, Montenegro, Japan, Canada, South Korea, New Zealand, Bosnia and Herzegovina, Macedonia, United States of America, Serbia, and the Ukraine. The Green Card simplifies entry to the job market for foreigners who have qualifications for which France has a job opening in register of jobs suitable for green cards. The permit is for long-term residence for employment purposes.

9.4 Blue Card

Intended for the stay associated with the performance of a 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, however, for the 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 contain gross monthly or yearly wage at least at the rate of 1.5 multiple of the gross average annual wage.

9.5 Short-Term Work Visa

These can be granted by the embassy on an 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 work permit, employment contract, and proof of securing accommodation.

Source: Government websites, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings


Rating (Outlook)Rating Date
Moody's
Aa2 (Positive)
04/05/2018
S&P GlobalAA (Stable)
08/11/2013
Fitch Ratings
AA (Stable)20/07/2018

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

10.2 Competitiveness and Efficiency Indicators


World Ranking
201620172018
Ease of Doing Business Index
28/189
29/190
31/190
Ease of Paying Taxes Index
87/189
88/190
54/190
Logistics Performance Index
16/160
N/A
16/160
Corruption Perception Index
69/176
70/180
N/A
IMD World Competitiveness32/61
31/63
28/63

Source: World Bank, IMD, Transparency International

10.3 Fitch Solutions Risk Indices


World ranking
201620172018
Economic Risk Index Rank18/202
Short-Term Economic Risk Score
68.871.971.5
Long-Term Economic Risk Score72.774.674.8
Political Risk Index Rank29/202
Short-Term Political Risk Score
7680.279.4
Long-Term Political Risk Score82.380.680.6
Operational Risk Index Rank23/201
Operational Risk Index Score67.870.571.5

Source: Fitch Solutions
Date last reviewed: August 29, 2018

10.4 Fitch Solutions Risk Summary

ECONOMIC RISK
The French economy in 2017 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 which 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.

OPERATIONAL RISK
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. President Macron, in 2017, has 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: August 31, 2018

10.5 Fitch Solutions Political & 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: August 21, 2018

10.6 Fitch Solutions Operational Risk Index


Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
France Score71.560.270.379.975.5
Developed States Average72.963.370.975.881.8
Developed States Position (out of 27)1916171222
Developed States Average72.963.370.975.881.8
Developed States Position (out of 27)1916171222
Global Average49.749.850.049.349.9
Global Position (out of 201)2336271231

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
Country
Operational Risk IndexLabour Market Risk Index
Trade and Investment Risk IndexLogistics Risk IndexCrime and Secruity Risk Index
Switzerland79.976.577.673.991.8
Denmark79.6
75.4
75.8
83.3
84.0
Netherlands79.1
64.5
77.9
85.5
88.4
Sweden78.7
67.6
77.8
85.5
83.8
US78.2
79.0
75.2
88.0
70.5
New Zealand78.0
73.0
75.7
73.8
89.4
Canada77.5
75.2
71.8
80.7
82.1
UK77.3
72.1
78.1
77.9
81.3
Norway77.3
62.7
72.6
81.5
92.3
Finland75.2
53.0
73.5
83.2
91.2
Japan74.9
68.8
64.9
81.4
84.7
Luxembourg74.4
52.1
77.7
78.9
88.9
Ireland74.1
65.0
77.8
71.2
82.5
Austria74.1
58.6
71.6
77.9
88.3
Australia73.5
68.0
71.4
70.3
84.3
Germany73.0
63.4
69.5
77.4
81.7
Spain
72.1
59.0
67.4
80.9
81.3
Belgium
72.1
55.3
76.5
81.4
75.3
France
71.5
60.2
70.3
79.9
75.5
Portugal70.6
50.8
66.5
80.2
85.0
Iceland70.4
59.9
66.2
69.1
86.6
Liechtenstein69.5
54.7
79.5
61.1
82.6
Israel66.7
72.4
63.0
69.1
62.4
Malta65.2
52.4
69.6
58.5
80.1
Isle of Man65.0
62.0
61.8
53.9
82.3
Italy63.1
53.9
57.6
72.3
68.7
Greece58.253.147.868.863.2
Developed Markets Averages72.9
63.3
70.9
75.8
81.8
Global Markets Averages49.7
49.8
50.0
49.3
49.9

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: August 21, 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)
Graph: Merchandise exports to France
Graph: Merchandise exports to France
Graph: Merchandise imports from France
Graph: Merchandise imports from France

Exchange Rate HK$/US$, average
7.76 (2013)
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
Source: Hong Kong Census and Statistics Department, Fitch Solutions


2017
Growth rate (%)
Number of French residents visiting Hong Kong204,130
-4.5
Number of French residing in Hong Kong2,2280.02

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


2017
Growth rate (%)
Number of European residents visiting Hong Kong1,929,824
-0.2
Number of developed state citizens residing in Hong Kong65,6801.5

Source: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs - Population Division, Fitch Solutions
Date last reviewed: August 21, 2018

11.2 Commercial Presence in Hong Kong


2017
Growth rate (%)
Number of French Companies in Hong Kong343
2.7
- Regional headquarters81
11.0
- Regional offices101-7.3
- Local offices1615.9

Source: Hong Kong Census and Statistics Department

11.3 Treaties and agreements between Hong Kong and France

  • Alongside the Comprehensive Agreement for the Avoidance of Double Taxation (CDTA) effective since December 1, 2011, Hong Kong also signed an Investment Promotion and Protection Agreement (IPPA) with France in May 1997.
  • France also has a Double Taxation Agreement with mainland China, as well as a Bilateral Investment Treaty with mainland China that entered into force on August 20, 2010.

Note: China (mainland) and Russia signed an Agreement for the Avoidance of Double Taxation (DTA) on October 13, 2016 and Investment Promotion and Protection Agreements which came into effect on February 12, 2000.

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

Source: French Chamber of Commerce - Hong Kong

Consulate General of France in Hong Kong and Macau

Address: 25/F & 26/F, Tower II, Admiralty Centre, 18 Harcourt Road, Hong Kong
Email: informations@consulfrance-hongkong.org
Tel: (852) 3752 9900

Source: Consulate General of France in Hong Kong and Macau

11.5 Visa Requirements for Hong Kong Residents

HKSAR passport holders do not need a visa to the Schengen area for a stay up to 90 days in any 180-day period.

Source: Visa on Demand

Content provided by Picture: Fitch Solutions – BMI Research
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