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French Legislation for Foreign Investments

French Legislation for Foreign Investments

Updated on Monday 18th April 2016

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french_legislation_for_foreign_investments.jpgFrance is one of the most popular countries in the world and one of the top travel destinations. Its diversity, good infrastructure and economy attract numerous foreign investors. France’s neighboring countries make it a valuable site for business operations in terms of European and international trade and commerce.

Although there have been some recent changes made by the French Government related to foreign investments in the county, there are still numerous opportunities and predictions for future investments in France that remain favorable.

Investment incentives in France

France has a free investment policy. However, there are certain restrictions and some economic sectors require previous approval from the French Ministry of the Economy. Foreign and national investors can benefit from incentive programs. These programs are meant to encourage beneficial investment and create new jobs.

Investment incentives for investors are the following:

- subsidies: cash grants for regional development, regional subsidies for the creation of businesses etc.;

- loans and financing guarantees;

- special tax treatment.

These incentives can be negotiated according to the specifics of the investment. The organization responsible for promoting investment in France is the French Agency for International Investment.

Tax incentives for foreign investors in France

Foreign investors have certain benefits in France in terms of taxes. In certain parts of the country, the local communities may grant temporary total or partial business tax exemptions to companies that settle, expand or take over ailing companies. However, this help cannot exceed a period of five years.

In certain situations, companies that take over ailing industrial organizations may benefit from a two year corporate tax exemption.

New regulations on foreign investments in France

As of May 2014, the French Government issued a new decree that expands the list of sectors in which foreign investors require prior authorization from the French Ministry of the Economy. Any foreign investment made in such strategic sectors is subject to approval. These sectors are:

- energy: electricity, gas, oil or other sources of energy;

- water: the water supply in accordance with the standards for public health;

- transport: transportation networks and services;

- public health.

Both EU investors and non-EU investors will need to seek approval before conducting any business in these strategic sectors in France.

If you want to start a new business in France or wish to invest in this country, our law firm in France can provide you all of the needed assistance and advice.


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