France is an increasingly competitive European leader in information and communications technology (ICT), as companies here pilot innovations in fixed and mobile telephony, internet services, software, and fiber optics. Two world-class IT service companies, Cap Gemini, and Atos Origin are among Europe's top five and global leaders like Microsoft, IBM, and NEC Computers have established their European headquarters here. Other industry leaders, notably, Sun, Texas Instruments, Xerox, have all set up major R&D facilities to draw on the country's specialized talent pool of 45,000 public and private researchers. Information technology employs 47% of France's ICT workforce.

With the largest IT market in Western Europe after Germany and the United Kingdom, France is also now at the forefront of telecoms convergence. The home grown Iliag Group paved the way for competition when its start-up internet service provider offered one of the world's first "triple play" packages of fast internet access, television, and unlimited voice calls. French customers are showing a growing appetite for high-tech products and services: More than 14 million households or 55% now own a computer and 86% (12.7 million) have access to high speed internet. Consumers here recently deserted fixed-line operators for voice over internet protocol (VoIP) which uses broad-band connections to route cheaper calls. The country now has the highest level of VoIP penetration in Europe since the number of users doubled last year to 5.5 million.

Source: IFA

Foreign investors vote the Paris region their top choice as a high-performance service center in Europe.

France's capital region has become foreign investor's top choice in Europe as an international business center, holding its place second only to Tokyo, and ahead of London and New York. Fortune magazine 2006 again ranked the Paris region that most attractive location in Europe for the world's top 500 companies' headquarters. With a 5.4 million workforce that is one of the most cost-effective and high qualified in Europe, the Paris region is also the country's leading inward investment location, with 8,900 foreign companies employing 30% of its foreign corporate staff.

Some 90% of international investment in the region goes to the service sector, with steady growth in the software, business services, and electronics industries.

Source: IFA

In the past few years, France has changed significantly by launching reforms across key sectors to make it easier and more profitable than ever for international companies to succeed in France.

With the recently appointed government now in place, lead by President Nicolas Sarkozy, France will continue to move forward at a rapid pace. The new administration has a targeted list of priorities to help unleash France's economic potential and drive investment projects, with specific focus on promoting overtime and lightening the tax burden.

France's modern friendly business environment is expected to include these key changes:

• Labor market flexibility: There are plans to modify France's two-tiered work contract (CDD and CDI) system and introduce a single contract with aligned dismissal procedures. The goal is to improve the hiring-and, if necessary, firing- of workers to offer employers greater flexibility.
• Minimum 35-hour work week: The 35-hour work week will serve as a minimum guideline, with emphasis placed on "work more to earn more." Overtime work is expected to be exempt from taxes and social charges. Depending on their size, companies might also benefit from social charge reductions.
• Lower taxes: The corporate tax rate is predicted to fall from 33% to at least 28% to make France one of the most fiscally competitive countries in Europe. Individuals could also benefit from estate tax exemptions and a tax shield, with maximum total tax expected to drop from 60% to 50% of annual income.
• Deductible loan interest: Interest on real-estate loans for primary residences could be deductible from income tax to encourage more people to buy property.
• Sustainable development: A new ministry - the Ministry of State - is set to implement a strong sustainable development policy in France, overseeing ecology, infrastructure, energy and regional development. Green taxes are also on the agenda, with tax credits and breaks planned for environmentally safe products and services.
• Simplified administration for foreigners: The creation of the Ministry of Immigration and National Identity is intended to streamline the process for qualified foreigners to obtain work permits, visas and other immigration documents.
• Attracting skilled talent: A multi-criteria points system that underscores education, training and language is anticipated to help draw highly skilled professionals from around the world to France.

Source: IFA

Foreign direct investments in France reached a record €58.4 billion in 2006, an increase of almost 15% or €7.3 billion over 2005, according to the Banque de France. The total number of investment projects also rose to 665, a 2.3% increase over the previous year.

Source: IFA

The Coca-Cola Company is set to invest €36 million in France this year to expand its production capacity. Coca-Cola has steadily expanded its operations here over the last six years, investing €156 million in the modernization of its industrial plant.

Huawei Technologies one of the world's largest networking and telecommunications equipment suppliers, recently announced the creation of two new R&D centers in France. Huawei plans to triple the total number of employees here, creating 350 new positions in the next three to five years. One of the centers, a laboratory devoted to high-speed fixed networks, will hire 20 new employees this year.

Leading Spanish retail group Inditex, parent to Zara, recently announced the creation of 1,000 new jobs in France, increasing the number of salaried employees to 5,500 by the end of 2007. Inditex, one of Europe's most successful fashion purveyors, is increasing its market share in France, with €500 million sales turnover and a sales increase of 6% last year.

Source: IFA