Doing business

(Last updated: 30 Sep 2008)
 

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

In conjunction with the market profiles, the Opportunities Online portal may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, identified by our overseas network to Australian businesses.

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

Business etiquette

Business tips

The most important characteristics of French business behaviour are its emphasis on courtesy, and a certain formality.

French companies are interested in long-term partnerships. Therefore, once business partnerships are established they need to be maintained with regular visits to France that will ensure continued collaboration.

Although many business people in France speak English, a considerable advantage can be gained if one can communicate in French during business dealings.

Ensure that the person you are dealing with is a confident English speaker or have a translator on hand. The French are formal in their business dealings and generally are not receptive to a hard-sell approach.

Titles (Dr, Professor, etc.) should be used both in correspondence and in face-to-face meetings – business contacts are not normally addressed on a first name basis.

A handshake and a greeting are customary when meeting contacts, or entering and leaving a meeting.

Contracts should be coherent, thorough, and where possible, brief.

Do not schedule business meetings in August (summer vacation) or workdays adjacent to public holidays.

Respecting appointment schedules is important, along with prompt correspondence whether by mail or fax.

Not surprisingly, in a country renowned for its fashion industry, style of dress is very important in the business world. For men, office and corporate wear is formal consisting of suit and tie.

Alternatively, fashionable semi-conservative wear is considered appropriate for women.

Times are often referred to using the 24-hour clock, eg. 6.00pm is 18.00 hours.

Lunch is an integral part of the day and business discussions during a meal are common.

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

France is a member of the European Union and gives preference to associate members of the Union, developing countries and European Free Trade Association (EFTA) members. If you are looking to sell your products in France, you should be aware of the following:

• EU Directives must be met in addition to all local and national regulations in France.
• Common Customs Tariff (CCT) is applicable to goods from non-EU countries, including Australia.
• Most duties are ad valorem (per cent), based on the GATT Valuation Code – approximate cost, insurance and freight (CIF) value.
• There are no special requirements for the Bill of Lading, and ‘To Order’ bills are acceptable.
• A packing list is compulsory if the shipment contains more than one package and if the contents of each package are not shown on the commercial invoice.
• In all circumstances a packing list facilitates clearance and all discounts must be clearly shown.
• Digital signatures are now recognised as a legal instrument for most commercial transactions.

Customs authority contact details:

Direction Générale des Douanes et Droits Indirects
11 Rue des Deux Communes
93558 Montreuil Cedex
Tel: +33 1 4004 0404
Fax: +33 1 5753 4937

Web: www.douane.gouv.fr

Customs Info Centre (Infos Douane Service) can be reached from 8.30am to 6.00pm, Monday to Friday on 0 820 02 44 44 (charged at local rate from a fixed telephone) or email: ids@douane.finances.gouv.fr

Non-tariff barriers

Import restrictions and prohibitions

Information is available on the French customs’ website (mainly in French, but some sections are also available in English).

Product certification, labelling and packaging

Special certificates

Livestock, animal products, plants and plant products must be accompanied by health certificates issued by the approved authority in the country of origin.

Plants and shrubs (excluding seeds) require trilingual phytosanitary certificates issued by the approved authority in the country of origin and approval from the French Department of Agriculture.

Fresh fruit requires quality and phytosanitary certificates declaring them to be free of San Jose scale.

Fodder plant seed requires a certificate of purity.

A certificate of age may be required for spirituous beverages.

Iron and steel products and carded woollen fabrics are subject to the issue of a technical visa prior to importation.

Documentary requirements

All commercial and shipping documents must be in the French language. 

Commercial invoice

There is no prescribed form, and three copies are required. The invoice must be certified and signed by the exporter and contain:

• The names and addresses of the buyer and seller
• A full description of the merchandise
• Quantity
• Terms of sale
• Unit price and total value - including all costs up to CIF (Incoterm 1990). For example: loading, transportation, insurance, packaging, commission

Care should be taken in completing the commercial invoice. Under valuation attracts heavy fines; over valuation attracts excess duty. There is no provision for payment by importers if shipment is rejected due to errors.

All copies should bear the following declaration:  'Nous certifions que les marchandises faisant l'objet de cette fourniture sont de fabrication ...........(origin), et que la valeur sous-mentionée est juste et conforme à nos écritures' (‘We certify that the goods that are the object of this request are made in … and that the value mentioned here below is correct and corresponds to our terms and conditions’).

Bill of lading/airway bill

Normal commercial practice. To Order shipments are permitted.

Certificate of origin

Certificates of origin are required for:

• Goods processed in countries enjoying preferential tariff treatment over the original country of origin. 
• A wide range of textile articles, natural mineral waters, wool carpets and wines prepared with aromatic substances.

Setting up in France

Setting up an overseas office can be expensive and usually, but not always, follows an initial market entry, working through agents or distributors. The benefits to Australian business people of setting up offices overseas can be significant.

You need to think about:

• The office location – convenience to customers, security and social attitude towards the integrity of the neighbourhood.
• Costs per metre to rent or lease.
• Utilities, eg. availability of water, power, electricity, telephone, fax and Internet connections.
• General building access, eg. user-friendliness of reception area and disabled access
• Parking for visitors and tenants.
• Amenities, eg. meeting room, tearoom, toilets.
• The lease agreement exit clause - consult a lawyer who specialises in property agreements.
• Value of using property consultants (recommended). 

To register a company you must supply the following in French:

• Copy of the authorisation of the Board of Directors
• Notice of the appointment of your representative in France
• Personal documents of your representative (passport)
• Company articles and by-laws
• Lease or contract relating for your premises in France

On an average basis, office rent is more expensive in France than in Australia and short-term leases tend to be rare and difficult to find. Serviced offices might offer temporary alternatives and numerous companies offer this service in large French cities, including the Australian company Servcorp or the French company Axinnov. On large-scale investment projects, Invest in France, the French government investment promotion agency, is able through its domestic network to assist in finding business accommodation and industrial sites.

Austrade offices overseas can assist companies wanting to set up representative offices by: 

• Providing advice based on their previous experience in helping Australian companies.
• Recommending experienced legal and taxation experts.
• Finding suitable property consultants.
• Connecting you to other companies who have already gone down this path and who will know of pitfalls and short-cuts.
• Introducing you to major accounting firms which will know the practical steps in setting up offices.

Taxation

France has a double taxation agreement with Australia. Tax rules favour corporate investment, regional development and international expansion and included accelerated depreciation, exemptions and carry-forward losses.

Corporate income tax is payable if a company has an office (branch or subsidiary) in France. However, territoriality of profits depends on the contract between the parent and the branch or subsidiary. Profits realised in France are taxable, and all costs and expenses incurred by the company for its operations in France are deductible. This includes:

• Depreciation of property
• Plant and equipment
• Amortisation of specific intangible assets such as software, patents and R&D expenditure (except goodwill)

Subsidies received are generally taxable at normal rates, but taxes of investment subsidies may be reduced in some cases, notably in the year of the development grant (‘prime à l'aménagement du territoire’), or spread over several years.

Most subsidies are not subject to the Goods and Services Tax (TVA). A Liaison Office is not subject to corporate income tax or TVA, but is liable for some local taxes and wage-based levies.

TVA applies to activities regarding the supply of goods or services including importation and is paid by the consumer. Businesses are only charged with collecting the tax on sales, and deduct the tax they have paid on purchases and investments from the amount collected. Rates are set by individual European Union (EU) members and differ from country to country.

Banking, financial and insurance transactions, teaching and some real-estate rentals are the main services exempted from TVA. The standard rate on the sale of goods and services is 19.6 per cent, but lower rates can apply. For example:

• Food, building renovations – 5.5 per cent
• Some agricultural products and medicines – 5.5 per cent or 2.5 per cent
• Books, hotels, public transport, newspapers and magazines – 5.5 per cent or 2.1 per cent

Local authorities impose a business tax (‘taxe professionnelle’) on companies and branches. Rates vary significantly from place to place and legislation sets a minimum and maximum for the tax, taking into account the relative profitability of the business. However, there are temporary exemptions that are offered to encourage businesses. ‘Taxe professionnelle’ is not payable in full until the third year of operation or, in priority areas, until the sixth year. Other exemptions apply.

Other local taxes include property tax (‘taxe foncière’), charged to owners of land and buildings, and housing tax (‘taxe d'habitation’), charged to occupants of non-professional premises who may be either owners or tenants. They are assessed on the basis of the rental value of the property. Reductions in taxes and social charges exist for companies investing in depressed regions attempting to buy ailing firms.

Companies wishing to set up an office in France are strongly advised to take fiscal and legal advice from Austrade Paris before embarking on such a project.

The French Government also provides many tax incentives for companies who set up business in France – mainly for innovative companies who conduct research and development. For more information, see the Invest in France's tax incentives brochure.

Intellectual property protection

French industrial property law provides effective protection for patents, trademarks, models and designs. Institut National de la Propriété Industrielle is the core of the French protection system, and filings with it are the starting point for patent and trademark protection. Industrial property rights entitle patent holders to a monopoly on use for 20 years.

Trademarks are valid for 10 years and can be renewed indefinitely. Models and designs are protected for 25 years.

Company names, trade names and logos are also protected and can be cited in unfair competition suits.

(Source: www.invest-in-france.org)

Banking and finance

Banking activities amount for 2.8 per cent of France’s GDP (average for the last 10 years). There is broad access to banking services in the country, and there are about 72 billion accounts in France. France is one of the member states of the European Union and the Euro is used in France as the prescribed currency.

The French foreign exchange market is a vital segment of the national economy. It represents a substantial segment of the European foreign exchange market due to the high liquidity of the Euro and its global acceptance.

In 2000, the stock markets of Paris, Amsterdam and Brussels merged into the Euronext system (Lisbon joined Euronext in 2002). This merger has enabled Euronext to become the second largest European stock market in terms of capitalisation and of listed companies, as well as the largest European stock market in terms of annual transactions (A$2,750 billion in 2001).

Over-the-counter market - the 'Marché Libre', created in 1996, is now organised (but not regulated) by Euronext. It is used by French and foreign small and medium-sized enterprises wishing to be present on the stock market without complying with the entrance criteria of the other Euronext markets.

The insurance sector is one of the pillars of the French economy. The French insurance sector is the fifth largest in the world, with a A$323 billion turnover in 2007. Insurance companies with headquarters located outside the European Economic Area (EEA) are supervised by the French Ministry of Economy and Finances (Insurance control commission). To be authorised to offer contracts to French residents, they have to establish a subsidiary, after obtaining an administrative agreement in compliance with the French Code of Insurance.

French asset management has expanded fivefold in the past 10 years, and ranks among the largest in the world, with more than A$4100 billion under management in the year 2007.

In terms of mutual funds, France ranks first in Europe in asset management, ahead of Germany and the UK, and second as domiciliary country, after Luxemburg. As a member state and the current president of the European Union, France has to comply with European directives.