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France: Investing
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France ranks third in the world in attracting Foreign Direct Investments. Paris is the second city in the world, after Tokyo, in terms of establishment of multinational headquarters. It has about 500. Nevertheless, the country showed a decline in foreign investment due to the deterioration of the international economic situation; this should however improve with the economic recovery.
The country's strengths include: its position as a fifth world's largest power, its highly skilled workforce, industrial base and agricultural resources and its geographic location in the center of Europe.
| Foreign Direct Investment | 2008 | 2009 | 2010 |
| FDI Inward Flow (million USD) | 62,257 | 34,027 | 33,905 |
| FDI Stock (million USD) | 920,842 | 1,132,961 | 1,008,378 |
| Performance Index*, Ranking on 141 Economies | 100 | 71 | - |
| Potential Index**, Ranking on 141 Economies | 18 | - | - |
| Number of Greenfield Investments*** | 680 | 408 | - |
| FDI Inwards (in % of GFCF****) | 10.0 | 22.8 | - |
| FDI Stock (in % of GDP) | 32.3 | 42.8 | - |
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.
| Main Investing Countries | 2009, in % |
| Netherlands | 15.9 |
| UK | 14.1 |
| Luxembourg | 12.2 |
| Belgium | 11.2 |
| USA | 10.3 |
| Germany | 10.0 |
| Switzerland | 5.9 |
| Spain | 3.5 |
| Main Invested Sectors | 2009, in % |
| Manufacturing | 28.3 |
| Finance and insurance activities | 23.5 |
| Real estate activities | 13.6 |
| Trade, car and motorcycle repair services | 8.6 |
| Administrative and support services | 7.5 |
| Information and communication services | 5.0 |
| Specialized activities, research and technology | 4.0 |
Source: Bank of France - Last Available Data.
To fight against the financial crisis, the French government has implemented different mesures: the economic relaunch plan has committed the financing of 1,000 projects. These investments bear on transport infrastructures, higher education and research, State real estate property, housing and urban redevelopment and also health. Additionally, Sarkozy's government has abolished the professional tax in order to permanantly stimulate investment. Furthermore, the government established a strategic investment fund of EUR 20 billion, in Autumn 2008. Its aim: to buy stakes in industrial companies whose development is essential to the French economy.
| France | OECD | United States | Germany | |
| Index of Transaction Transparency* | 10.0 | 6.0 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 1.0 | 5.2 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 5.0 | 6.8 | 9.0 | 5.0 |
| Index of Investor Protection**** | 5.3 | 6.0 | 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.
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Last Updates: January 2012