A

PROJECT REPORT

ON

“Country Profile of France”

MASTER OF BUSINESS ADMINISTRATION

(WITH SPECIALISATION IN MARKETING)

Submitted to: Submitted by:

Dr. R. Jayraj Shashwat Nagalia

Faculty SAP ID: 500066208

UPES R151218025

M.B.A – SEM III

France, officially the French Republic, is a country whose territory consists of
metropolitan France in Western Europe and several overseas regions and territories. The
metropolitan area of France extends from the Mediterranean Sea to the English Channel
and the North Sea, and from the Rhine to the Atlantic Ocean. It is bordered by Belgium,
Luxembourg and Germany to the northeast, Switzerland and Italy to the east, and
Andorra and Spain to the south. The overseas territories include French Guiana in South
America and several islands in the Atlantic, Pacific and Indian oceans. The country's 18
integral regions (five of which are situated overseas) span a combined area of 643,801
square kilometres (248,573 sq mi) and a total population of 67.02 million. France is a
unitary semi-presidential republic with its capital in Paris, the country's largest city and
main cultural and commercial centre. Other major urban areas include Lyon, Marseille,
Toulouse, Bordeaux, Lille and Nice.

Capital Paris

Region situated in Western Europe

Population 6.72 crores

Form of government Unitary semi-presidential republic

GDP $2.968 trillion (PPP; 2018)

GDP rank 10th (PPP)

GDP growth 1.6% (2018)

GDP per capita $45,474 (PPP; 2018)

Inflation (CPI) 2% (May 2018)

Labour force 35.5 million (2017)

 Unemployment 8.8% (Q4 2018)

Ease-of-doing-business rank 32nd (2019)

5 type of risks in international market

1. Political and Economic

The French economy has been gaining momentum, building on a more buoyant global
environment as well as rising domestic business and consumer confidence. GDP is
forecast to grow by at least 1.7% in 2017 and 2018, up from 1.2% in 2016.

The recovery has only prompted a small decrease in unemployment, from 10% in 2016 to
9.5% in 2017, with job creation exceeding the increase in the labour force. However,
most of French unemployment is structural and the labour market remains one of
France’s key economic challenges.

France is also facing a large deficit in trade in goods, which reflects net energy imports
but also relatively weak competitiveness in manufactured goods. The trade deficit is
expected to widen from € 48.1 billion (2.2% of GDP) in 2016 to € 63 billion (2.7% of
GDP) in 2017 and 2018. France’s market shares in global exports and eurozone exports
have stabilised after decreasing for a number of years, but its export potential is weaker
than comparable economies, with, in particular, fewer mid-sized exporting firms.

France has made progress in fixing its public finances. It is expected to bring the
Maastricht deficit below 3% of GDP for the first time since 2008 in 2017 and is planning
to reduce the deficit further over the coming years. The fiscal consolidation strategy is
expected to help France exit the Excessive Deficit Procedure next year. However, France
still needs to tackle the high public debt (98% of GDP) it has inherited from the crisis.

Building on the improving domestic economic outlook, President Macron has started
delivering a programme of “economic transformation” which aims to liberalise the
French economy and protect people. His agenda expands his predecessor’s supply-side
approach which reduced the cost of labour, tried to simplify the business regulatory
environment and liberalised product markets to some extent.
Macron’s first big reform focused on the labour market. The government introduced
legislation injecting more flexibility into the labour market by easing restrictions on
redundancies, capping the cost of dismissals in labour courts, simplifying social dialogue
structures within companies, and giving greater leeway for deals on working time and
pay at company rather than sector level.

The 2018 Budget then introduced a wide range of tax policies targeting both businesses
and households, which aim to make work pay, increase competitiveness, as well as
encourage investment, innovation and risk-taking. Key tax measures include a gradual
decrease in the main corporation tax rate from 33% to 25% by 2022 – bringing the rate
into line with the EU average – a flat tax on financial investment income and a reform of
the wealth tax whose scope has been narrowed to property assets (leaving other types of
assets tax-free), and a gradual abolition of the housing tax (council tax).

In 2018, Macron is expected to prioritise more protective social policy reforms (e.g.
pensions, unemployment benefits, skills), an enterprise modernisation bill, and a big € 57
billion investment plan focusing on environmental transition, skills, innovation and
digital government.

2. Human rights

France is a member of ILO and transposes all the directives. France is a founding
member of the Council of Europe and subject to the jurisdiction of the European Court of
Human Rights (which is based in Strasbourg). France has similar levels of gender
equality as the UK.

A Ministry of Women’s Rights was re-established by the Hollande administration on

taking office in 2012. Racial hatred and hate crimes are banned and the police enforce the
law. France is a secular country, and the state neither recognises nor funds any religious
group. The right to marry and adopt children for gay couples is now enshrined in law.
The right to strike is protected by the Constitution.

There is no restriction on the right to strike, outside of key public services, apart from
minimum service in the transport industry. Striking is regarded as acceptable action by
many French state workers, and the right is regularly exercised.

3. Bribery and Corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily
resident in the UK, a body incorporated in the UK or a Scottish partnership to bribe
anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for

the conduct of a person who is neither a UK national or resident in the UK or a body
incorporated or formed in the UK. In this case, it does not matter whether the acts or
omissions which form part of the offence take place in the UK or elsewhere. According
to Transparency International’s Corruption Perceptions Index, France ranked 26th out of
175 countries in 2014. (Denmark was 1st – least corrupt; UK was 14th.)

4. Intellectual Property

IP rights are territorial i.e. they only give protection in the countries where they are
granted or registered. There is no single European patent; a European patent is a “bundle”
of individual national patents. If you are thinking about trading internationally, then you
should consider registering your IP rights in your export markets.

5. Organised Crime

L’Office central de lutte contre le crime organisé (Central Office for the Fight Against
Organised Crime) in the French Interior Ministry coordinates efforts to track down and
eliminate organised crime in France.

Organized crime between the UK and France primarily involves drug and human
trafficking concentrated around the cross channel ports, but cybercrime is also a threat for
both countries. Organised crime has been quick to take advantage of the opportunities
offered by the internet, particularly the growth in e-commerce and online banking.

Cross cultural analysis

Languages in France

French, the official language, is the first language of 88% of the population.

Most of those who speak minority languages also speak French, as the minority
languages are given no legal recognition. 3% of the population speak German dialects,
predominantly in the eastern provinces of Alsace-Lorraine and Moselle.
Flemish is spoken by around 90,000 people in the northeast, which is 0.2% of the French
population. Around 1m people near the Italian border, roughly 1.7% of the population,
speaks Italian. Basque is spoken by 0.1% and mainly along the French-Spanish border.

Catalan dialects are spoken in the French Pyrenees by around 260,000 people or 0.4% of
the French population.

The Celtic language, Breton, is spoken by 1.2% and mainly in the north west of France.
These three languages have no official status within France.

In the South of France, over 7m speak Occitan dialects, representing 12% of the
population of France, but these dialects have no official status. Nor too does Corsu, the
dialect of the island of Corsica that is closely related to Tuscan and is spoken by 0.3%.

Arabic, the third largest minority language, is spoken by around 1.7% of the population
throughout the country. Other immigrant languages from the former French colonies
include Kabyle and Antillean Creole.

French Society & Culture

Cuisine

 Food is one of the great passions of the French people.

 French cooking is highly refined and involves careful preparation, attention to

detail, and the use of fresh ingredients.

 It varies by region and is heavily influenced by what is grown locally.

French Family Values

 The family is the social adhesive of the country and each member has certain
duties and responsibilities.

 The extended family provides both emotional and financial support.

  Despite their reputation as romantics, the French have a practical approach towards
marriage.

 Families have few children, but parents take their role as guardians and providers
very seriously.

Relationships - Public vs. Private

 The French are private people and have different rules of behaviour for people
within their social circle and those who are not.

 Although the French are generally polite in all dealings, it is only with their close
friends and family that they are free to be themselves.

 Friendship brings with it a set of roles and responsibilities, including being

available should you be needed. Friendship involves frequent, if not daily, contact.

Etiquette & Customs in France

Meeting Etiquette

 The handshake is a common form of greeting.

 Friends may greet each other by lightly kissing on the cheeks, once on the left
cheek and once on the right cheek.

 First names are reserved for family and close friends. Wait until invited before
using someone's first name.

 You are expected to say 'bonjour' or 'bonsoir' (good morning and good evening)
with the honorific title Monsieur or Madame when entering a shop and 'au revoir'
(good-bye) when leaving.

 If you live in an apartment building, it is polite to greet your neighbours with the
same appellation.
Gift Giving Etiquette

 Flowers should be given in odd numbers but not 13, which is considered unlucky.

 Some older French retain old-style prohibitions against receiving certain flowers:
White lilies or chrysanthemums as they are used at funerals; red carnations as they
symbolize bad will; any white flowers as they are used at weddings.

 Prohibitions about flowers are not generally followed by the young. When in
doubt, it is always best to err on the side of conservatism.

 If you give wine, make sure it is of the highest quality you can afford. The French
appreciate their wines.

 Gifts are usually opened when received.

Dining Etiquette

If you are invited to a French house for dinner:

 Arrive on time. Under no circumstances should you arrive more than 10 minutes
later than invited without telephoning to explain you have been detained.

 The further south you go in the country, the more flexible time is.

 If invited to a large dinner party, especially in Paris, send flowers the morning of
the occasion so that they may be displayed that evening.

 Dress well. The French are fashion conscious and their version of casual is not as
relaxed as in many western countries.

Table manners

 Table manners are Continental -- the fork is held in the left hand and the knife in
the right while eating.

 If there is a seating plan, you may be directed to a particular seat.

  Do not begin eating until the hostess says 'bon appetit'.

 If you have not finished eating, cross your knife and fork on your plate with the
fork over the knife.

 Do not rest your elbows on the table, although your hands should be visible and
not in your lap.

 Finish everything on your plate.

 Do not cut salad with a knife and fork. Fold the lettuce on to your fork.

 Peel and slice fruit before eating it.

 Leave your wine glass nearly full if you do not want more.

Business Etiquette and Protocol in France

Relationships & Communication

 French business behaviour emphasizes courtesy and a degree of formality.

 Mutual trust and respect is required to get things done.

 Trust is earned through proper behaviour.

 Creating a wide network of close personal business alliances is very important.

 If you do not speak French, an apology for not knowing their language may aid in
developing a relationship.

 It is always a good idea to learn a few key phrases, since it demonstrates an interest
in a long-term relationship.

 The way a French person communicates is often predicated by their social status,
education level, and which part of the country they were raised.
  In business, the French often appear extremely direct because they are not afraid of
asking probing questions.

 Written communication is formal. Secretaries often schedule meetings and may be

used to relay information from your French business colleagues.

Business Meetings Etiquette

 Appointments are necessary and should be made at least 2 weeks in advance.

 Appointments may be made in writing or by telephone and, depending upon the

level of the person you are meeting, are often handled by the secretary.

 Do not try to schedule meetings during July or August, as this is a common

vacation period.

 If you expect to be delayed, telephone immediately and offer an explanation.

 Meetings are to discuss issues, not to make decisions.

 Avoid exaggerated claims, as the French do not appreciate hyperbole.

Business Negotiation

 French business emphasizes courtesy and a fair degree of formality.

 Wait to be told where to sit.

 Maintain direct eye contact while speaking.

 Business is conducted slowly. You will have to be patient and not appear ruffled
by the strict adherence to protocol.

 Avoid confrontational behaviour or high-pressure tactics. It can be

counterproductive.

 The French will carefully analyze every detail of a proposal, regardless of how
minute.
  Business is hierarchical. Decisions are generally made at the top of the company.

 The French are often impressed with good debating skills that demonstrate an
intellectual grasp of the situation and all the ramifications.

 Never attempt to be overly friendly. The French generally compartmentalize their

business and personal lives.

 Discussions may be heated and intense.

 High-pressure sales tactics should be avoided. The French are more receptive to a
low-key, logical presentation that explains the advantages of a proposal in full.

 When an agreement is reached, the French may insist it be formalized in an

extremely comprehensive, precisely worded contract.

Dress Etiquette

 Business dress is understated and stylish.

 Men should wear dark-coloured, conservative business suits for the initial meeting.
How you dress later is largely dependent upon the personality of the company with
which you are conducting business.

 Women should wear either business suits or elegant dresses in soft colours.

 The French like the finer things in life, so wear good quality accessories.

Business Cards

 Business cards are exchanged after the initial introductions without formal ritual.

 Have the other side of your business card translated into French. Although not a
business necessity, it demonstrates an attention to detail that will be appreciated.

 Include any advanced academic degrees on your business card.

 French business cards are often a bit larger than in many other countries.
Commercial analysis
Commercial real estate activity is one of the key tangible barometers to track the
health of the economy. A constantly changing landscape, with its cyclical swings,
commercial real estate activity is a leading indicator for expected expansionary
activities of business entities. Examples of large companies like Apple Inc.,
buying/leasing commercial space in emerging economies is a sign of the
redistribution/expansion of the company’s activities in the future.

Commercial real estate ownership and leasing were previously a mom and pop
business before sophisticated/qualified investors started looking at it as a long-term
asset class that can provide abnormal/extraordinary returns. Opening up of capital
market activity for real estate through investment vehicles, such as REITs, and
REOCs in the stock market and innovative products, such as commercial
mortgage-backed securities, etc., have been key to the success of the commercial
real estate sector. These initiatives have financed commercial real estate
construction and management activity to a large extent, over the last 50 years or
more.

The market research study on the commercial real estate market in France focuses
on the market activity within the key subsectors, such as offices, retail, industrial
and multifamily.

Key cities of France are covered in the study, based on the population, city level
GDP, business and commercial construction activity, demographics and other
factors.

Key Factors Affecting the Commercial Real Estate Market:

 Economic Activity/Policy, Exchange Rate, Inflation and Employment

Activity
 Industry Sector (that the property is most fit for) and Associated Cyclicality
 Capital Market Access, Liquidity, Interest Rates and Mortgage Rates.
 Demographic and Socioeconomic Trends
 Real Estate Demand, Supply and Pricing
 Regulatory Landscape, Compliance with local government bodies, EHS
requirements.
  Insights from Comparison between Services and Non-services Sectors
 Technological Changes, Adaption and Disruption in the Industry
 Time for Completion of a Project (for ongoing projects), and Sales Trend (of
ready projects).
 Taxes (related to the real estate business)
 Rent or Buy Dynamics

France- Market Challenges

Britain’s exit from the European Union (Brexit) may pose uncertainty for French and
U.S. companies as they seek to understand how the departure will ultimately affect
business interests and trade. France has been moderately successful in attracting
companies across multiple sectors to transfer operations from the United Kingdom to
France, touting the country’s central location in Europe, high quality of life, and educated
labor force. Nevertheless, the uncertainty surrounding Brexit, especially the potential for
trade disruptions and the movement of workers, is impacting business decision-making
and may pose challenges for U.S. exporters.

In November 2018, the “Yellow Vests” protest movement emerged from discontented
segments of the French public who felt left behind by Macron’s ambitious reform
agenda. The weekly, often violent, demonstrations have affected cities and rural
communities across the country and have commandeered French political discourse. In
response, the government announced in December €10 billion ($11.4 billion) in measures
to assist low-income earners and pensioners. A “Great National Debate” – a combination
of town halls featuring government leaders, community discussions, and an online
platform for public complaints and proposals – contributed to a dramatic fall in
participation in the protests after Macron’s government announced additional measures
of about €6.4 billion in April.

Among U.S. investors in France, 62 % said the current social climate was a “nuisance”
for U.S. companies operating in France. Nevertheless, 42 % of U.S. firms still plan to
hire new employees in France over the next two to three years.

U.S. firms must currently navigate national and European regulations and standards for
selling products in France. The French often interpret existing EU regulations more
stringently than other Member states and regulate in areas where the EU has not yet
proposed legislation.

Another challenge for U.S. firms is dealing with highly concentrated retail distribution
chains and networks. Many French global manufacturers and suppliers exercise strong
control over these retail networks, with well-organized buying offices that have put in
place very stringent selection processes for new suppliers, products and services. High
retail mark-ups combined with innovative and creative marketing approaches are
prerequisites to enter the French retail market.

Entry modes in France

In general, the commercial environment in France is favorable for sales of U.S. goods
and services. Marketing products and services in France is similar to the approach in the
United States, notwithstanding some significant cultural differences and certain legal and
regulatory restrictions. While French buyers can be receptive to new and innovative
products, there is a tendency to stick with known local suppliers. Competition can be
fierce but local partners are readily available in most sectors and product lines. U.S.
companies should be prepared to invest marketing resources in launching a new brand or
product in France.

Like in many European countries, traditional distrubution channels are being disrupted by
new players in the digital and sharing economy. Many U.S. firms are doing well in this
space, as well as a growing number of local competitors.

In addition to this Country Commercial Guide, the US Commercial Service office in

Paris offers many services and customized solutions designed to assist you in developing
your market entry strategy and to facilitate your exports to France.

French market entry strategy

France is known to have a large market and the rewards of success in a big market are
similarly more remarkable. The food and beverage market in France is particularly
exciting and also competing. These competitions teach a lot to consumers about products
and their quality and so they are quite willing to pay more for quality and premium
products. To take advantage of this opportunity in this special market, a wise and
deliverable
Developing a French market entry strategy

The procedure of your launch starts by researching the target market. We will improve
our existing acquaintance bases and then undertake a customized research on your behalf.
In this way, we will create solid foundations of a winning French market entry strategy.
We will collect information about consumers’ buying habits and tendencies, competitor
activity and expert opinion; all within your target market segment. For the next stage, we
try to bring your product to the French market in collaboration with our partners in linked
sectors.

Your partners in French market entry strategy

Due to years of experience in this area, we have the authority to develop flawless index
of our partners in all relevant sector of French product marketing. Out partners will be
available to help you in these processes and we will recommend you the best importers
and distributors for your products and we take the responsibility to do all the necessary
introductions to start off useful business relationships. Your French market entry
strategy make the most of our contact of experts in event management, public relations
and consumer promotions, all mobilized to prepare a successful launch of your product in
French market.

Implementing your French market entry strategy

The services include the full life cycle of product marketing and our assistance wouldn’t
finish in design stage of your French market entry strategy but we will also be with you
in the implementation. In this way, we will be sure that the strategy is correctly executed
and that you will achieve the desired outcomes. We will also support you to find the
proper parties and then helping you to develop the most suitable presentation of your
company which highlight the best your product benefits and unique selling points. With
the solid basis of a well-studied strategy and with the help of our expert team in place at
the execution stage of the plans, the success of your entry to the French market is
assured.

French market entry strategy is crucial. This is the heart of our business at Green Seed.
Our team is assembled of a group of experienced consultants with great expertise in this
fields to ensure having winning strategies for our clients and then to make sure that those
strategies are correctly implemented. Effectively, this collaboration brings instant
acquaintance of French market that greatly boost the prospects of your product launch in
France.

Since 1991, when we started under the name Food from Britain, we allow UK firms to
expand their international activities. Thanks to 26 years of experience in this sector, we
are indispensable partner for UK companies by accompanying their expansion on
international market. They provide integrated solutions to food and drink organizations,
including:

 Identifying the most relevant routes to win market shares.

 Defining effective sales and marketing plans.

 Increasing business, profitability.

 Defining new strategic opportunities.

France Political Stability

France: Political stability index (-2.5 weak; 2.5 strong): For that indicator, The
World Bank provides data for France from 1996 to 2017. The average value for
France during that period was 0.49 points with a minumum of -0.1 points in 2016
and a maximum of 0.93 points in 2002. See the global rankings for that indicator or
use the country comparator to compare trends over time.

Laws and regulations in France

French law can be divided into two main categories: private law and public law. This
differs from the traditional common law concepts in which the main distinction is
between criminal law and civil law.

Private law governs relationships between individuals. It includes:

 Civil law. Commercial law

 Employment law

Public law defines the structure and the workings of the government as well as
relationships between the state and the individual. It includes: Criminal law

 Administrative law

 Constitutional law

Civil law

As mentioned, the term civil law in France refers to private law, and should be
distinguished from the group of legal systems descended from Roman law known as civil
law, as opposed to common law. The main body of statutes and laws governing civil law
and procedure are set out in the Civil Code of France. Other private law statutes are also
located in other codes such as the commercial code in the Code of Commerce, or
copyright law in the Intellectual Property Code.

Criminal law

French criminal law is governed first and foremost by the Code pénal, or penal code,
which for example formally prohibits violent offences such as homicide, assault and
many pecuniary offences such as theft or money laundering, and provides general
sentencing guidelines. However, a number of criminal offenses, e.g., slander and libel,
have not been codified but are instead addressed by legislation.

Constitutional law

Constitutional law is a branch of public law dealing with:

 Human rights

 Constitution and functioning of the public authorities and the government and, in
particular, the relationship between the three constitutional powers, executive,
legislative and judiciary.

 Relationship between citizens and public authorities, in particular, the participation

of French citizens in the exercise of public powers.

It fixes the hierarchy of laws and rules within the French legal system and the
relationship between these different norms. Constitutional law became independent from
political science and administrative law with the Constitution of 1958 which included the
institution of a constitutional court, the "Conseil Constitutionnel".

Administrative law

In France, most claims against local or national governments are handled by the
administrative courts, for which the Conseil d'État (Council of State) is a court of last
resort. The main administrative courts are the tribunaux administratifs [and their appeal
courts. The French body of administrative law is called droit administratif.

French codes

There are about 78 codes (laws) in France currently in force, which deal with both the
French public and private law categorically. These codes are published for free by the
French government on a website called "Legifrance".

European Union Law

Traditionally, the law of the European Union (EU) has been viewed as a body of rules
which are transposed either automatically (in the case of a regulation) or by national
legislation (in the case of a directive) into French domestic law, whether in civil,
criminal, administrative or constitutional law.

However, in November 2005 the Commission SADOS announced a proposed directive

based on a somewhat controversial European Court of Justice (ECJ) decision holding that
the EU had the right to require its member states to introduce criminal laws because, in
the case at hand, this was necessary in order to implement and uphold EU legislation on
combatting pollution. The commission intended to create a dozen or so EU criminal
offences, similar to the relationship of federal to state law in the United States of
America. Indeed, led by its then-Commissioner for Justice and Home Affairs Franco
Frattini - it insisted that the principle created in this decision applied to all policies, not
just pollution policy.

In May 2006, the Commission formally submitted to the EU Parliament and EU Council
(which have co-decision powers) the first draft directive aiming to put this into effect.
The draft concerns counterfeiting (for example, of car parts, drugs, or children's toys) and
requires each member state to set the following penalties for what it terms "organised
counterfeiters": a period of imprisonment of up to four years and a fine of up to
€300,000. The EU Parliament began its consideration of the draft directive in March
2007.

Bureaucracy in France
It's official - there is too much bureaucracy in France. Of course this will come as
no surprise to people who move to the country, but it seems that the French are just
as fed up with the complexity of their country's paperwork. A survey of French
users of government forms has found that they are too complicated, require too
many extra documents and take too long to process.

The biennial survey asked 7,700 people about their experiences of using 25
different services, from acquiring a driving licence to registering for invalidity or
disability benefits or retiring.Not only did a significant proportion of people say
they were unhappy with the service, many felt that it was getting worse.

Those least happy with the service were disabled people, 46 percent said the
service was too complicated, compared to 35 percent two years ago.
People approaching retirement age and dealing with pension’s paperwork and
vehicle drivers needing a new or altered driving license also felt that the process
had got more complicated and difficult over the last two years.The biggest
complaint was the lack of prior information given about the process, with many
people saying that it should be easier to find out in advance exactly how to apply
for various things, and what supporting documents will be needed.

Excessive delays was the next biggest gripe, with 23 percent of people saying it
takes too long to process applications, while 16 percent of people said that
government officials request far too many supporting documents with each
application, and information should be held centrally.The French government is
gradually moving more and more procedures online, but nine percent of people
said that the online systems weer too complicated and the government websites
were not easy to find information on.

Corruption in France
Corruption is a low risk for business operating or planning to invest in France. The
country’s investment climate is very favorable, and there exists a strong legal framework
to counter corruption. Corruption is perceived to be a problem in public procurement and
whenever business and politics overlap. Cases involving illegal political funding have
tainted the careers of several high-ranking French politicians. The Penal
Code criminalizes active and passive bribery, the bribery of national and foreign officials,
and gifts and facilitation payments. The 2017 introduction of the Sapin II law is expected
to strengthen the anti-corruption fight in France and crack down on the bribery of foreign
officials. Demands for irregular payments are very unlikely in France.

Judicial System

Companies do not contend with any significant corruption risks when dealing with the
courts in France. The judiciary is perceived as independent and the levels of integrity of
prosecutors and judges are deemed to be very high, with a very low number of corruption
cases (GCR 2017-2018; FER 2014). Companies have moderate confidence in the
efficiency of the legal framework in settling disputes and in challenging government
actions and/or regulations (GCR 2017-2018). More than half of citizens indicate a high-
level of trust in the judicial system (European Commission, Feb. 2014). However,
slightly over a third of citizens perceive judges as somehow or very corrupt. International
rulings are enforced by the local courts, provided that the foreign courts in question have
been declared ‘executor’ by a French judge. Companies are free to attempt to settle
disputes through arbitration subject to minimal standards of due process and principles of
procedural efficiency and fairness. Enforcing a contract takes significantly less time and
is less costly compared to other OECD high-income countries.

Police

There is a low to moderate corruption risk for businesses dealing with the French security
sector. The police are well-trained and the levels of integrity within the institution are
fairly high. Businesses consider the police reliable in enforcing law and order (GCR
2017-2018). Around half of respondents from a survey perceive instances
of bribery and abuse of office within the police to be widespread (European Commission,
Feb. 2014). The government has effective control over the police force and adequate
mechanisms exist to punish abuse and corruption (ICS 2017). Impunity is not widespread
(ICS 2017). The Inspectorate General of National Police (IGPN) actively investigates and
prosecutes allegations of police corruption; citizens can report abuses, on the condition
that they provide their identity, on the website of the Ministry of Interior. Citizens
reported abuses 2,958 times in 2015 (HRR 2016).

Tax Administration

There is a low to moderate risk of corruption in France’s tax administration. Companies

complain that tax regulations and tax rates are a major obstacle to doing business (GCR
2017-2018; European Commission, Feb. 2014). Nonetheless, irregular payments and
bribes when making tax payments are perceived to be rare (GCR 2015-2016). Almost
half of surveyed businesses perceive tax fraud in France to be widespread (European
Commission, Feb. 2014). In effect, tax evasion is a problem in France; French authorities
are investigating over four hundred individuals after revelations stemming from the
Panama Papers (RFI, Apr. 2017).

France recently decreased the costs required to pay taxes by introducing a credit against
corporate tax and reducing labor tax rates (DB 2016). Companies pay taxes eight times a
year which is slightly below the OECD high income average (DB 2017).
Trade barriers in France
Tariffs and non-tariff barriers

Tariffs

France is part of the harmonised trade system of the EU and importing and exporting are
covered by the EU Taxation and Customs Union.

A Common External Tariff (CET) is applicable to other countries, including Australia.

The European Community has created the Binding Tariff Information (BTI) system as a
tool to obtain the correct tariff classification for goods for import or export. Before
shipping any goods, please consult French Customs.

Non-tariff barriers

Product certification, labelling and packaging

Certification, labelling and packaging must meet EU requirements.

Packaging

To reduce the impact on the environment, the EU has required legislation concerning the
management of packaging and packaging waste.

CE Mark

The CE mark is a mandatory conformity marking for certain products sold within the
European Economic Area (EEA).

Labelling

All labelling and information directives of the European Council must be met, as well as
local and national regulations. Information on the labelling of products in the interest of
consumers and compliance procedures are available at Summaries of EU Legislation.

Food information and labelling legislation must comply with EU legislation.

For organic produce, EU legislation requires that imported organic food from third
countries be produced to the same standards as that from or EU.
Special certificates

There are controls on imports on a number of products.

Information on exporting and export documentation regarding animals, plants and

agricultural products from Australia can also be found at the Australian Department of
Agriculture and Water Resources.

Methods of quoting and payment

Quotations should be in Euro or Australian dollars.

Documentary requirements

All commercial and shipping documents must be in the French language.

Pro-forma invoice

This may occasionally be requested by the importer and a minimum of two copies is
required.

Commercial invoice

There is no prescribed form and three copies are required. The invoice must be certified
and signed by the exporter and include:

 names and addresses of the buyer and seller

 full description of the merchandise

 quantity

 terms of sale

 unit price and total value - including all costs up to Cost, Insurance and Freight
(CIF - Incoterm 1990) e.g. loading, transportation, insurance, packaging and
commission

Care should be taken in completing the commercial invoice, under valuation attracts
heavy fines and over valuation, excess duty. There is no provision for payment by
importers if shipment is rejected due to errors.
Bill of lading

Normal commercial practice. To Order shipments are permitted

Currency Analysis of France

The EURUSD increased 0.0001 or 0.01% to 1.1021 on Friday November 15 from 1.1020
in the previous trading session. Historically, the Euro Dollar Exchange Rate - EUR/USD
reached an all time high of 1.87 in July of 1973 and a record low of 0.64 in February of
1985. The euro was only introduced as a currency on the first of January of 1999.
However, synthetic historical prices going back much further can be modeled if we
consider a weighted average of the previous currencies.

Asset valuation
Transfer pricing and business and asset valuation are key challenges for taxation. The
multi-sector experience of our team of economists and tax specialists will provide
solutions that are perfectly matched to your specific needs in these areas.

Transfer pricing is at the forefront of international taxation matters, as demonstrated by

the BEPS project: the rules in this area are becoming increasingly complex, documentary
and reporting requirements increasingly numerous and associated penalties increasingly
strict, making this a key issue for managing the tax affairs of your company. Our team
can help you think about strategic planning that meets the needs of your operational
structure and transfer pricing policy, by conducting audits and preparing documentation
to ensure that your intra-group transactions are conducted at arm’s-length prices (carrying
out benchmark studies or even financial valuations) or that you are up to date with your
reporting requirements. More generally, we can help you with transfer pricing inspections
by the authorities or with negotiation procedures, such as prior transfer pricing
agreements, for example.

The valuation of a business or its assets is crucial to transfer and restructuring operations.
These days, the valuation of intangible assets, which often make up the principal value of
a company, has major tax implications. Using economic and financial analysis techniques
that are in keeping with the recommendations of the tax authorities and in line with the
approaches adopted by practitioners, our team can play a consultancy role for any
company reorganisation, by valuing securities, intangible assets or optional instruments,
or for any family-related matters. We can also act in any pre-litigation or litigation with
the authorities.

Taxation in france
In France, taxes are levied by the government, and collected by the public
administrations. French "public administrations" are made up of three different
institutions:

 the central government, i.e. the national government or the state ("l'État") strictly
speaking, plus various central government bodies. It has a separate budget (general
budget, special Treasury accounts, special budgets). It collects most of the taxes.

 local governments, which include agencies with limited territorial jurisdiction,

such as local authorities, local public establishments, chambers of commerce and
all public or quasi-public bodies financed primarily by local governments. They
collect many taxes, but their weight is rather limited compared to that of central
government.

 social security association (ASSO), private organizations endowed with a mission

of public service (even though they behave to a large extent like public
administrations). Their budget is made up of all mandatory social security funds
 (general scheme, unemployment insurance schemes, complementary retirement
funds and welfare benefit funds, funds for the liberal professions and agricultural
funds, special employee schemes) and the agencies financed by such funds (social
works, public and private sector hospitals contributing to public hospital services
and financed from an aggregate operating grant). They are mostly financed by
social contributions, collected for the sole purpose of social welfare.

Taxes in France are made up of taxes in the narrow meaning of the word, plus social
security contributions. Most of the taxes are collected by the government and the local
collectivities, while the social deductions are collected by the Social Security. There is a
distinction to be made between taxes (impôts), which applies to production, importations,
wealth and incomes, and social contributions (cotisations sociales), which are part of the
total wage paid by an employer when he remunerates an employee. Taxes and
contributions together are called in French prélèvements obligatoires (compulsory
deductions).

People having their tax residence in France are subject to French tax. Thus, they are
natural or legal persons either living in France, i.e. have their homes or principal
residence in France; or working in France; or having the center of their economic
interests in France. Any one of these criteria is sufficient for a person to be treated as
taxable.

Inflationary pressures
French consumer prices fell 0.4% in September compared to August, giving a year-on-
year inflation rate of 1.1%, according to EU-harmonised data published on Tuesday that
confirmed earlier forecasts.

The European Central Bank (ECB) has a target for inflation within the euro zone coming
in at just below 2%, but inflation data has consistently undershot that target since 2013,
highlighting the region’s sluggish economic performance.