According to the World Investment Report for 2013 published by the UNCTAD, France is the 16th largest recipient of FDI in the world, it went down five places in relation to 2012. Paris is the world's second largest city, after Tokyo, in terms of location of the headquarters of multinationals; currently, the city hosts nearly 500 of them. The country recorded a decline in foreign investment due to the deteriorating international economic situation in 2009/2010, but since then, the flows have been slowly recovering. However, according to the records provided by the UNCTAD, FDI were reduced by 77% in 2013 while they were increasing in other developed countries. France went down three places in the classification Doing Business 2014 issued by the World Bank (it ranks 38 out of 189 countries).
The country's strengths include: its position as the fifth world's largest power, its highly-skilled workforce, its large industrial base, its agricultural resources and its geographic location in the center of Europe.
|Index of Transaction Transparency*||10.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||1.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||7.0||9.0||5.0|
|Index of Investor Protection****||5.3||6.1||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||38,547||25,086||4,875|
|FDI Stock (million USD)||973,069||1,029,834||1,081,497|
|Performance Index*, Ranking on 181 Economies||77||-||-|
|Potential Index**, Ranking on 177 Economies||11||-||-|
|Number of Greenfield Investments***||331||304||412|
|FDI Inwards (in % of GFCF****)||6.9||4.8||0.9|
|FDI Stock (in % of GDP)||34.9||39.4||39.5|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
To fight against the financial crisis, the French government has implemented different measures: The implementation of a EUR 20 billion corporate tax credit program (crédit d’impôt compétitivité emploi), and the elimination of a corporate social solidarity tax to attract investors; the creation of a research tax credit (crédit impôt recherche) and tax incentives for innovative new companies (jeune entreprise innovante); and the creation of new labour laws which strengthen vocational training and add elements of flexibility to the French labour market.
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Last Updates: February 2015