Document - Invest In France Agency

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Document - Invest In France Agency

1/10

06_2009

France in Europe

Comparative information based on recent institutional surveys

The driving forces behind the economy are the subject of regular international comparisons carried out by

independent institutions and consultancy firms. These studies shed an interesting light on the strengths

and weaknesses of the economies being compared. They should however be treated with caution as the

methodologies used sometimes lead to results which do not fully reflect reality, specifically where certain

national particularities are disregarded or not fully understood.

For the last few years, France has been among the highest-ranked countries in terms of receiving foreign direct

investment (FDI). Its leading status is confirmed by the latest UNCTAD estimates for 2008: France, with €126bn of

inward FDI, is now ranked second in the world only to the USA (€321bn).

One of France’s strengths relates to the attractive business setup costs it offers foreign companies. According

to the “Competitive Alternatives” survey carried out by KPMG in 2008, total business setup costs (employment,

installation, transport, taxes and duties, equipment and energy, etc.) are lower than in neighboring countries.

France

United Kingdom

Netherlands

Italy

Germany

0 20 40 60 80 100 120

Baseline: New York = 100

More generally, international surveys

highlight the following advantages in France:

> A qualified, productive workforce

> Wide availability of commercial real estate

> Competitive energy and telecommunications

costs

> Efficient infrastructure

> Levels of corporate taxation in line with the

European average


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France in Europe

Comparative information based on recent institutional surveys

n

A qualified, productive workforce

A high standard of education

◊ According to Eurostat, France leads the way for Science and Technology graduates.

Country

Percentage of higher education graduates

in Science and Technology in 2006

(among 1,000 people aged from 20 to 29)

France 20.7

United Kingdom 17.8

Sweden 15.1

Spain 11.5

Germany 10.7

Belgium 10.6

Italy 9.1

Netherlands 9

Source: Eurostat 2009

France has renowned business schools. HEC and INSEAD are ranked first and third respectively in the Financial

Times list of best business schools in Europe. The top 12 also include ESCP, EM Lyon and ESSEC.

Among the 134 countries surveyed by the World Economic Forum, in 2007-2008, France boasted the best

management schools, ahead of Switzerland.

Quality of Management schools

Management or business schools ranked from

1= limited or of poor quality to 7 = among the best in the world

by international standards

Rank Country Score

1 France 6.1

5 Belgium 5.9

6 Spain 5.9

10 Netherlands 5.5

15 Sweden 5.4

18 United Kingdom 5.3

21 Germany 5.1

61 Italy 4.2

Source: The Global Competitiveness Report 2008-2009

Opinion Poll 2007, 2008


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France in Europe

Comparative information based on recent institutional surveys

The French are hard-working and productive

◊ According to Eurostat, French managers work longer hours than most of their European counterparts. The number

of hours worked per week by all employee groups in France (41 hours) is in line with the European average.

Average number of hours worked per week (2007)

50

46

44

42

40

38

Germany

Belgium

France

Italy

Spain

Netherlands

Source: Eurostat 2009

EU-27

United Kingdom

Sweden

Managers

Employees

France is ranked third in the world in terms of productivity per hour, after Norway and the United States.

Labor productivity

(GDP, $ per hour worked)

Norway 37.99

United States

France

Ireland

Belgium

Netherlands

Sweden

United Kingdom

Germany

35.63

35.18

34.14

34.01

32.96

30.82

30.43

29.49

0 5 10 15 20 25 30 35 40

Source: International Labour Organization-KILM 2008.


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France in Europe

Comparative information based on recent institutional surveys

Similar salary costs to those found in neighboring countries

France offers lower salary levels than those found in several neighboring countries.

Country

Project

manager

Gross annual salary

including social security contributions

(employers’ and employees’)

Engineer

Secretary

Qualified

worker

Germany 192,584 73,591 46,567 49,625

Belgium 197,283 67,603 34,707 50,449

Spain 165,017 50,145 31,464 33,839

France 179,934 55,236 34,707 37,634

United Kingdom 160,487 40,419 22,631 24,599

Italy 203,675 50,365 33,301 35,293

Sweden 142,921 49,012 34,556 36,363

Source : FdI Intelligence - Financial Times 2009, based on Watson Wyatt, 2008

n

Real estate assets

◊ The Ile-de-France region has Europe’s leading portfolio of commercial real estate.

COMMERCIAL REAL ESTATE

PORTFOLIOS IN EUROPE

(MILLIONS OF M²)

BRUSSELS : 12

RANDSTAD: 17.2

HAMBURG : 13.7

NORTH

SEA

LONDON

42.6

BERLIN : 14.4

RHINE-RUHR: 14.3

ATLANTIC

OCEAN

PARIS

50

RHINE-MAIN : 14

MUNICH : 12.8

LYON : 4.3

MILAN : 11

MADRID : 13.4

BARCELONA : 5

MEDITERRANEAN SEA

Source : Estimates ORIE, Jones Lang LaSalle, Traitements : ARD, IAURIF - 2007


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06_2009

France in Europe

Comparative information based on recent institutional surveys

◊ Annual occupation costs (rent+charges) for Parisian real estate are not as high as elsewhere in Europe.

Country

City

Occupation costs

(€ /m 2 /yr)

Netherlands Amsterdam 400

Belgium Brussels 410

Sweden Stockholm 476

Spain Madrid 540

Germany Frankfurt 555

Italy Milan 657

France Paris (La Defense) 699

United Kingdom London (City) 841

France Paris (Intra muros) 933

United Kingdom London (West End) 1,403

Source : CB Richard Ellis, Global Market View, May 2009

◊ Wide availability of offices for rent: Paris has two to three times more available office space than some

European capitals.

Country

City

Office space

available for rent

(thousands of m 2 )

France Paris (Intra muros) 2,745

Germany Frankfurt 1,415

Netherlands Amsterdam 1,220

Belgium Brussels 1,169

United Kingdom London (central) 1,051

Source : CB Richard Ellis, Q4 2008


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France in Europe

Comparative information based on recent institutional surveys

◊ Warehouse rent levels are particularly competitive in Paris.

Prices in euros per square meter in the French capital are two to three times lower than in certain other European

capitals.

150

Rent

148

Between 2003 and 2007, France was

the leading European destination for

logistics projects, ranking 3 rd in the

world with 176 projects, compared

with 163 in the United Kingdom.

120

90

78

82

93

105

FDi Markets, Financial Times 2008

60

53

57

60

n

Source : Jones Lang Lasalle, European Warehousing

Distribution Property Clock - Q1 2009

Dense and efficient transport infrastructure

30

0

Paris

Milan

Brussels

Frankfurt

Stockholm

Amsterdam

Madrid

London

France has one of the densest road networks in Europe, the quality of which has been recognized in an

international survey.

Country

Density of road network

(km/km 2 )

Belgium 4.90

Netherlands 3.72

Quality of Roads

Road networks ranked from 1 = underdeveloped

to 7 = extensive and efficient by international standards

Rank Country Score

1 France 6.7

France 1.72

United Kingdom 1.60

Italy 1.59

Spain 1.32

Germany 0.65

4 Germany 6.5

11 Belgium 5.9

18 Sweden 5.6

24 United Kingdom 5.3

25 Netherlands 5.3

30 Spain 5.1

55 Italy 3.9

Source : IMD 2008 Source : The Global Competitiveness Report 2008-2009 -

Opinion poll 2007,2008


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06_2009

France in Europe

Comparative information based on recent institutional surveys

France has the most highly developed high-speed rail network in Europe which has also been judged by a

WEF survey to be the best in the world.

Country

High-speed rail network (km)

France 1,872

Spain 1,599

Germany 1,285

Italy 744

Belgium 137

United Kingdom 113

Source: International Union of Railways, January 2009

Quality of Rail Infrastructure

Rail networks ranked from 1= underdeveloped

to 7 = extensive and efficient by international standards

Rank Country Score

1 France 6.6

4 Germany 6.4

8 Belgium 5.7

11 Sweden 5.5

13 Netherlands 5.5

19 Spain 4.7

20 United Kingdom 4.6

52 Italy 3

Source: The Global Competitiveness Report 2008-2009 -

Opinion poll 2007,2008

◊ Paris Charles de Gaulle is the largest airport in Europe by cargo traffic and the 2 nd largest airport in Europe

after London Heathrow by passenger numbers.

Country

Airport

Air traffic,

thousands of passengers

(2008)

United Kingdom London Heathrow 66,907

France Paris CDG 60,496

Germany Frankfurt am Main 53,189

Spain Madrid Barajas 50,366

Netherlands Amsterdam Schiphol 44,235

Belgium Brussels 18,369

Sweden Stockholm Arlanda 18,128

Italy Rome Fiumicino 16,726

Source: Eurostat – Data in focus 2009 (30 leading airports by total annual passenger

numbers in 2008)

Frankfurt

Amsterdam

London Heathrow

Freight traffic

at the four leading European airports

(millions of tonnes of cargo)

Paris CDG 2,298

1,396

1,651

2,128

0 500 1,000 1,500 2,000 2,500

Source: Airports Council International, 2007 data


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06_2009

France in Europe

Comparative information based on recent institutional surveys

n

Competitive energy, water and telecommunications networks

◊ According to Eurostat, energy prices are attractive in France:

France Sweden Netherlands Spain Germany

United

Kingdom

Belgium Italy

Cost of electricity

(a/kWh, excl. tax)

H1 2008 industrial consumption

0.059 0.069 0.086 0.0915 0.093 0.094 0.099 0.1027

Source: Eurostat 2008

United

Kingdom

Spain Netherlands Italy Belgium France Germany Sweden

Cost of natural gas

(a/gigajoule, excl. tax)

H2 2008 industrial consumption

7.29 7.64 8.12 8.77 8.98 9.03 11.28 12.48

Source: Eurostat 2008

◊ Water prices are also competitive.

Sweden Spain Italy Netherlands France

United

Kingdom

Belgium Germany

Average water rates paid

by companies in 2008

($ cents/m 3 )

128.0 130.8 157.8 183.4 199.6 237.0 291.7 301.1

Source: NUS Consulting Group, July 2008


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06_2009

France in Europe

Comparative information based on recent institutional surveys

Average price per minute for outbound

mobile calls in Europe in 2008 (€ cents, excl. tax)

25

23

20

21

18.2 18.5

18.1

◊ The price per minute for mobile calls in France is

among the lowest in Europe.

15

10

5

0

Germany Spain France

Source: IDATE, ARCEP - June, 2009

Italy

United

Kingdom

Broadband penetration rate (%, 2008)

– all technologies

Netherlands 35.5

Sweden

32.3

◊ The broadband penetration rate in France is in line with

the European average.

United Kingdom

27.6

France

26.4

Belgium

26.4

Germany

26.2

Spain

Italy

18.2

19.8

0 5 10 15 20 25 30 35 40

Source: OECD 2009


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France in Europe

Comparative information based on recent institutional surveys

n

A lighter corporate tax burden than often claimed

Comparative taxation analyses usually focus on the nominal tax rates in France, without taking tax bases into

account. However, tax bases have a critical bearing on the total amount of tax paid and vary significantly from

country to country. In order to improve the credibility of comparisons, the “Competitive Alternatives” survey by

KPMG redefines taxation rates for three different types of sector (Manufacturing, R&D, Services), taking into

account the composition of the tax base along with tax incentives available in each country. Once calculated, the

effective corporate tax rates in France are not unfavourable, and are in fact significantly lower than the rates in

the manufacturing and R&D sectors in several neighboring countries.

Country

Effective corporate tax rate*

Percentage of net profit before tax

(Baseline: United States = 0)

Manufacturing Rank R&D Rank Services Rank

Germany 37.8% 8 th 33.5% 7 th 32.2% 5 th

France 30.2% 4 th - 25.7% 2 nd 33.7% 6 th

United Kingdom 30.9% 5 th - 13.8% 3 rd 26% 1 st

Italy 42.1% 9 th 49.5% 10 th 58.5% 10 th

Source: KPMG, Competitive Alternatives, 2008

*: Net of State aid and incentives

NB : The negative rates seen in the R&D sector result from the availability of tax credits and aid in certain countries.

The research tax credit in France is particularly attractive.

For further information on the reasons for investing in France, please visit www.investinfrance.org

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