Investing in France in 2025

France’s business climate: challenges, opportunities, and incentives.|©iStock/StevanZZ

Nightmarish bureaucracy. Endless vacations. Workers who go on strike at the drop of a béret. French business is not quite the same as American business. Yet, somehow, France survives. Remember that this is the country that introduced the word “entrepreneur” into the English language—although it seems a ludicrous notion when you’re stranded at Charles de Gaulle Airport because the baggage handlers or air traffic control workers have gone on strike.

Like much of Europe and Latin America, the French live in a culture that prioritizes family life and enjoyment over work as an end in itself. People do not hold back from striking or protesting if they believe their treasured way of life is under threat.

It also has a 35-hour work week and all kinds of generous provisions for the workforce that would result in much wailing and gnashing of teeth in the lean and mean business world of North America.

For most overseas onlookers, France’s marketplace image conjures up visions of perfumes, cosmetics, top-quality wines, and gourmet foods. All are valuable exports, but so too are armaments and weapons, including Exocet missiles and Mirage jets. Renault, Peugeot, and Citröen lead the way in French automobile exports.

France is also a leading producer of air transport, with the colossal Airbus factory in Toulouse rivaling Boeing in Seattle.

Although e-business is growing significantly, the country’s traditional muscle lies in engineering and transportation—few would disagree with the fact that TGV trains rank among the world’s best. Some engineering talent has recently been lured into the glitzy world of web ventures, but the metal-bashing industries still attract top graduates, as do the nuclear, defense, chemical, telecommunications, and pharmaceutical sectors.

ANCT, formerly CGET, the main government agency for economic development, cites seven reasons why foreign companies should consider investing in its country:

It’s a large market in the heart of Europe.
It’s a country open to the world.
There’s a strong pro-business environment.
Financial markets are attractive and competitive.
The workforce is productive.
The country is at the forefront of science and technology advances.
France is known for quality, reliability, and productivity.

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Disincentives to Investing in France

The Country Commercial Guide (“Doing Business in France”), prepared by the US Embassy in Paris, pulls no punches. Despite decades of economic reforms and liberalizations, it reports that US and foreign companies often say they find relatively high payroll and income taxes, pervasive regulation of labor and products markets, and negative attitudes toward foreign investors to be disincentives to investing in France.

These “negative attitudes” aren’t generated by only the labor unions, which often oppose acquisitions of French businesses by US firms. (There is a wide perception that US companies focus on short-term profits at the expense of employment.) According to the embassy’s report, French firms themselves have stated a preference for working with French and European, rather than US, companies.

Yet despite the contradictions, the country now has several thousand international corporations, accounting for about 30% of French jobs, 36% of investment, and 40% of exports in the country’s manufacturing sector.

Embedded at the strategic heart of the European Union, France exports almost twice as much as the US as a fraction of GDP. Major US companies, such as Amazon, Google, Disney, IBM, Motorola, and Ford, have French addresses. In total, more than 4,500 North American firms have their European headquarters on French soil, creating 400,000 jobs.

Grants, Subsidies, Where to Find Assistance

The government’s stated objective of attracting inward investment is confirmed by the extensive incentive programs on offer. Set up by the government, the main economic development and investment promotion agency is called Agence Nationale de la Cohésion des Territoires (ANCT) (formerly Commisariat Général à l’Egalité des Territoires [CGET]). This body provides various kinds of assistance to potential investors. To attract jobs to less affluent areas, financial subsidies and tax incentives are offered at local, regional, and national levels. Eligibility requirements for obtaining grants and subsidies are the same for both French and foreign investors.

To be eligible for ANCT grants, the French government usually requires that companies create a minimum of 20 jobs within the first three years. A range of incentives is offered, depending on the type of business in question, including: research and development project grants; special tax treatment for company headquarters; local and regional tax holidays and special subsidies; industrial conversion zones, featuring tax breaks and grants for job creation; special access to credit for small- and medium-sized enterprises; and assistance for training, including a proportion of wages paid to employees in training.

For more information, visit the ANCT website.

Business France (formerly Invest in France) is an agency dedicated to the development and success of French and foreign businesses wishing to expand abroad. Headed by an “ambassador at large” from the Economic Ministry, over the past couple of decades, this group has been clearing the path for US and Canadian companies to expand their operations into France. Its services include negotiating the best possible financial incentive packages, cutting through red tape, identifying existing facilities or green-field sites to meet investors’ needs, organizing visits to sites, and advising on administrative practices, employment legislation, and French and European law. Contact Business France here.

Tax Breaks

Companies setting up in specially designated areas of towns and cities in certain parts of France can be exempted from eight years of tax on company profits and the annual rate of tax at the following rates: 100% for the first five years, 60% for the sixth year, 40% for the seventh year, and 20% for the eighth year.

Known as Zones Franches Urbaines (urban tax-free zones), these zones are generally in areas of urban renewal and redevelopment. Activities that qualify for tax breaks include manufacturing, commercial, and crafts-oriented activities. Companies carrying out banking, financial, insurance, management, or real estate activities cannot benefit from this tax exemption. Such a company must be independent; over 50% of its capital must not be held directly or indirectly by other companies.

Setting Up a Business in France: Key Steps & Costs

Starting a company in France involves complex legal requirements. Unlike some countries, you can’t buy a business off-the-shelf for a low cost. Businesses typically fall into two categories:

Société Anonyme (SA) – A limited liability company managed by a board of directors. Requires at least €37,000 ($38,850) in capital for private companies and €225,000 ($236,250) for public companies. The president bears civil and criminal liability for mismanagement.
Société à Responsabilité Limitée (SARL) – A simpler, limited liability company requiring at least €1 in capital and two shareholders. Managed by one or more appointed managers, who also hold liability.

Steps to Establish a SARL

Preliminary Setup:

Choose a registered office location.
Hire a manager (non-EU citizens need a business permit).
Open a company bank account.

Formal Registration:

Sign a lease or business center contract.
Gather identity documents and criminal record attestations.
Deposit capital into the company bank account.
Sign and file company articles with the tax office.
Publish a notice of company creation in an official journal.
Register with the Registre du Commerce et des Sociétés through the Centre de Formalités des Entreprises (CFE).

Finalization:

Submit documents to the CFE, which handles trade registry, tax, and social security formalities.
•Receive the K-bis form, confirming company registration.
Costs: ~$590 if self-filed; $2,100+ with legal assistance. Process takes about two weeks.

Financing Options

Foreign businesses can access all French banking services, including loans, credit facilities, and public offerings. Major banks like Société Générale provide specialized corporate banking services.