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Run business in France

At a glance

  • France and Britain are key trading partners
  • Britain has significant presence in France already
  • Proximity is ideal and markets are similar
  • Legal, financial and fiscal advice must be taken before signing business contracts - bureaucracy is rife
  • Brush up on your French or hire a national to do the talking
ThinkstockPhotos 153055856

Although our international friendship is traditionally restrained, France has always had strong trading links with the UK and they are, in this respect, of major importance to each other.

Britain is the third largest foreign investor in France, which in turn is the third largest investor in Britain.

Thanks to Eurostar, France is more accessible than ever for the British businessperson and Lille and Paris are now closer to London than many major British cities

Some 8,000 foreign companies are already established in France, about 1,800 of which are British. Their presence is felt across a wide range of sectors, from retailing to financial services, food and beverages to construction and manufacture.

BP, ICI, Zeneca, Glaxo-Wellcome, Barclays, RMC, Abbey National and The Woolwich are recognised brands there.

Accessibility

Thanks to Eurostar, France is more accessible than ever for the British businessperson and Lille and Paris are now closer to London than many major British cities.

Although France has an extensive indigenous supply capability and a well developed competitive market, they exchange similar goods and services with the UK and it can be assumed that most of what sells in the UK is likely to have a market in France.

Despite these links, companies are advised to take professional advice, especially on legal and fiscal issues, before deciding any investment. There is, in general, more state intervention and regulation than in Britain, although this is changing.

There are many specialist companies who can help in these matters, from the international accountancy and legal firms to smaller consultants.

There is no general rule that defines the way a business is set up in France. Routes in can vary from opening a small representative office (bureau de liaison), to taking over an existing company, much as in Britain.

Office space is widely available (though of course it can be very expensive in affluent urban centres), and there are business centres where space and support services can be rented.

Unless their image is a large part of their marketing strategy, most investors prefer to adopt a low profile and assume a French style. The simple way to do this is to acquire a French company.

As some qualifications are not automatically recognised, there may be some restrictions on the types of work that may be undertaken by professional staff, especially in the service sector.

 

A good way round this is to use French personnel and, with unemployment running at around 11%, decent employees are comparatively easy to find. English is increasingly used as a business language and business students are obliged to learn it to a high standard.

However, labour law is complex - with employment contracts for a fixed term only permissible in a limited number of situations - seeking early legal advice is an imperative.

Bureaucratic

The French legal system is notorious for requiring modernisation and streamlining, even among the French. Disputes can take a long time to be heard and resolved, especially if any part of the country's far-reaching bureaucracy is involved.

The tax system also has many differences to Britain's and mistakes can be costly to put right. On top of legal advice, reliable financial and fiscal council should be sought at the earliest possible stage of your venture.

Despite these hurdles, France has a sophisticated banking and financial system with a full range of services for the potential investor, at national or local levels.

As well as commercial bank loans, there are grants and loans from local authorities, help with finding sites, shared cost access to support services, tax incentives and grants for innovative new companies.

The Assembly of French Chambers of Commerce and Industry and the Invest in France Agency (see France resources) can provide information on these and other schemes.

In terms of business etiquette it's worth knowing that the French like to deal with someone with whom they can build mutual respect. Either employing a French national or developing your own interpersonal skills and language aptitude is therefore a must before entering the French market. Bon chance!

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