France and Monaco
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
France welcomes foreign investment. In the current economic climate, the French government sees foreign investment as a means to create additional jobs and stimulate growth. Investment regulations are simple, and a range of financial incentives are available to foreign investors. According to surveys of U.S. investors, U.S. companies find France’s skilled and productive labor force, good infrastructure, technology, and central location in Europe attractive. France’s membership in the European Union (EU) and the Eurozone facilitates the efficient movement of people, services, capital, and goods. However, notwithstanding French efforts at economic and tax reform, market liberalization, and attracting foreign investment, perceived disincentives to investing in France include the relatively high tax environment. Labor market fluidity is improving due to labor market reforms but is still rigid compared to some OECD economies.
Limits on Foreign Control and Right to Private Ownership and Establishment
France is among the least restrictive countries for foreign investment. With a few exceptions in certain specified sectors, there are no statutory limits on foreign ownership of companies. Foreign entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.
France maintains a national security review mechanism to screen high-risk investments. French law stipulates that control by acquisition of a domiciled company or subsidiary operating in certain sectors deemed crucial to France’s national interests relating to public order, public security and national defense are subject to prior notification, review, and approval by the Economy and Finance Minister. Other sectors requiring approval include energy infrastructure; transportation networks; public water supplies; electronic communication networks; public health protection; and installations vital to national security. In 2018, four additional categories – semiconductors, data storage, artificial intelligence and robotics – were added to the list requiring a national security review. For all listed sectors, France can block foreign takeovers of French companies according to the provisions of the 2014 Montebourg Decree.
On December 31, 2019 the government issued a decree to lower the threshold for vetting of foreign investment from outside Europe from 33 to 25 percent and then lowered it again to 10 percent on July 22, 2020, a temporary provision to prevent predatory investment during the COVID-19 crisis. This lower threshold is set to expire at the end of 2021. The decree also enhanced government-imposed conditions and penalties in cases of non-compliance and introduced a mechanism to coordinate the national security review of foreign direct investments with the European Union (EU Regulation 2019/452). The new rules entered into force on April 1, 2020. The list of strategic sectors was also expanded to include the following activities listed in the EU Regulation 2019/452: agricultural products, when such products contribute to national food supply security; the editing, printing, or distribution of press publications related to politics or general matters; and R&D activities relating to quantum technologies and energy storage technologies. Separately, France expanded the scope of sensitive sectors on April 30, 2020 to include biotechnology companies.
Procedurally, the Minister of Economy, Finance, and Recovery has 30 business days following the receipt of a request for authorization to either: 1) declare that the investor is not required to obtain such authorization; 2) grant its authorization without conditions; or 3) declare that an additional review is required to determine whether a conditional authorization is sufficient to protect national interests. If an additional review is required, the Minister has an additional 45 business days to either clear the transaction (possibly subject to conditions) or prohibit it. The Minister is further allowed to deny clearance based on the investor’s ties with a foreign government or public authority. The absence of a decision within the applicable timeframe is a de facto rejection of the authorization.
The government has also expanded the breadth of information required in the approval request. For example, a foreign investor must now disclose any financial relationship with or significant financial support from a State or public entity; a list of French and foreign competitors of the investor and of the target; or a signed statement that the investor has not, over the past five years, been subject to any sanctions for non-compliance with French FDI regulations.
In 2020, the government blocked at least one transaction—the attempted acquisition of a French firm by a U.S. company in the defense sector.
Other Investment Policy Reviews
Business France is a government agency established with the purpose of promoting new foreign investment, expansion, technology partnerships, and financial investment. Business France provides services to help investors understand regulatory, tax, and employment policies as well as state and local investment incentives and government support programs. Business France also helps companies find project financing and equity capital. Business France recently unveiled a website in English to help prospective businesses that are considering investments in the French market ( ).
In addition, France’s public investment bank, Bpifrance, assists foreign businesses to find local investors when setting up a subsidiary in France. It also supports foreign startups in France through the government’s French Tech Ticket program, which provides them with funding, a resident’s permit, and incubation facilities. Both business facilitation mechanisms provide for equitable treatment of women and minorities.
President Macron made innovation one of his priorities with a €10 billion ($11.8 billion) fund that is being financed through privatizations of State-owned enterprises. France’s priority sectors for investment include: aeronautics, agro-foods, digital, nuclear, rail, auto, chemicals and materials, forestry, eco-industries, shipbuilding, health, luxury, and extractive industries. In the near-term, the French government intends to focus on driverless vehicles, batteries, the high-speed train of the future, nano-electronics, renewable energy, and health industries.
Business France and Bpifrance are particularly interested in attracting foreign investment in the tech sector. The French government has developed the “French Tech” initiative to promote France as a location for start-ups and high-growth digital companies. In addition to 17 French cities, French Tech offices have been established in 100 cities around the world, including New York, San Francisco, Los Angeles, Shanghai, Hong Kong, Vietnam, Moscow, and Berlin. French Tech has special programs to provide support to startups at various stages of their development. The latest effort has been the creation of the French Tech 120 Program, which provides financial and administrative support to some 123 most promising tech companies. In 2019, €5 billion ($5.9 billion) in venture funding was raised by French startups, an increase of nearly threefold since 2015. In September 2019, President Emmanuel Macron convinced major asset managers such as AXA and Natixis to invest €5 billion ($5.9 billion) into French tech companies over the next three years. He also announced the creation of a listing of France’s top 40 startups “Next 40” with the highest potential to grow into unicorns.
On June 5, 2020, the French government introduced a new €1.2 billion ($1.4 billion) plan to support French startups, especially in the health, quantum, artificial intelligence, and cybersecurity sectors. The plan includes the creation of a €500 million ($590 million) investment fund to help startups overcome the COVID-19 crisis and continue to innovate. It also comprises a “French Tech Sovereignty Fund” with an initial commitment of €150 million ($177 million) launched on December 11, 2020 by Bpifrance, France’s public investment bank.
The website Guichet Enterprises ( ) is designed to be a one-stop website for registering a business. The site, managed by the National Institute of Industrial Property (INPI), is available in both French and English although some fact sheets on regulated industries are only available in French.
French firms invest more in the United States than in any other country and support approximately 780,000 American jobs. Total French investment in the United States reached $310.7 billion in 2019. France was our tenth largest trading partner with approximately $99.7 billion in bilateral trade in 2020. The business promotion agency Business France also assists French firms with outward investment, which it does not restrict.
5. Protection of Property Rights
Real property rights are regulated by the French civil code and are uniformly enforced. The World Bank’s Doing Business Index ranks France 32nd of 190 on registering property. French civil-law notaries (notaires) – highly specialized lawyers in private practice appointed as public officers by the Justice Ministry – handle residential and commercial conveyance and registration, contract drafting, company formation, successions, and estate planning. The official system of land registration (cadastre) is maintained by the French public land registry under the auspices of the French tax authority (Direction Generale des Finances Publiques or DGFiP), available online at . Mortgages are widely available, usually for a 15-year period.
Intellectual Property Rights
France is a strong defender of intellectual property rights (IPR). Under the French system, patents and trademarks protect industrial property, while copyrights protect literary/artistic property. By virtue of the Paris Convention, U.S. nationals have a priority period following filing of an application for a U.S. patent or trademark in which to file a corresponding application in France: twelve months for patents and six months for trademarks.
Counterfeiting is a costly problem for French companies, and the government of France maintains strong legal protections and a robust enforcement mechanism to combat trafficking in counterfeit goods — from copies of luxury goods to fake medications — as well as the theft and illegal use of IPR. The French Intellectual Property Code has been updated repeatedly over the years to address this challenge, most recently in 2019 with the implementation of the so-called Action Plan for Business Growth and Transformation or PACTE Law (Plan d’Action pour la Croissance et la Transformation des Entreprises). This law reinforced France’s anti-counterfeiting legislation and implemented EU Directive 2015/2436 of the Trademark Reform Package. It increased the Euro amount for damages to companies that are victims of counterfeiting and extends trademark protection to smartcard technology, certain geographical indications, plants, and agricultural seeds. The legislation also increased the statute of limitations for civil suits from three to ten years and strengthened the powers of customs officials to seize fake goods sent by mail or express freight. France also adopted legislation in 2019 to implement EU Directive 2019/790 on Copyright and Related Rights in the Digital Single Market.
The government also reports on seizures of counterfeit goods. In February 2021, the government launched a new French customs plan to combat counterfeiting for the 2021-2022 calendar year. Customs seizures in France have increased from 200,000 in 1994 to 5.64 million in 2020 (+ 20 percent compared to 2019). This new action plan will focus on improved intelligence gathering, investigation, litigation, and cooperation between all the stakeholders involved, including the Customs Office, which investigates fraud cases; the National Institute of Industrial Property, which oversees patents, trademarks, and industrial design rights; and France’s top private sector anti-counterfeiting organization, UNIFAB.
France has robust laws against online piracy. A government agency called the High Authority for the Dissemination of Artistic Works and the Protection of Rights on Internet (Haute Autorite pour la Diffusion des Œuvres et la Protection des droits sur Internet or HADOPI) administers a “graduated response” system of warnings and fines. It has taken enforcement action against several online pirate sites. HADOPI cooperates closely with the U.S. Patent and Trademark Office (USPTO) including pursuing voluntary arrangements to single out awareness about intermediaries that facilitate or fund pirate sites. (Note that one of HADOPI’s tasks is to ensure that the technical measures used to protect works do not prevent the right of individuals to make personal copies of television programs for their private use.) In December 2019, HADOPI released its yearly barometer of online cultural consumption showing that 26 percent of French people acquired and consumed music, films, and television series through illegal sites (53 percent via streaming and 45 percent through direct or indirect download). This figure has remained steady over the past few years. Offenders risk fines of between €1,500 ($1,770) and €300,000 ($354,000) and/or up to three years imprisonment.
The French government is increasing its efforts to combat online piracy in 2021 with a bill on the creation of a new audiovisual regulatory authority, Arcom, to regulate websites and audiovisual communications. The Ministry of Culture (MoC) announced in September 2019 its intention to merge France’s digital piracy watchdog HADOPI with the Higher Audiovisual Council (Conseil Supérieur de l’Audiovisuel) to create a more powerful authority capable on blocking illegal sites and blacklisting pirate sites. However, the establishment of this new authority was delayed by the COVID-19 pandemic as well as the appointment of a new government in July 2020.
France does not appear on USTR’s 2021 Special 301 Report. USTR’s 2020 Notorious Market List includes an infringing site reportedly hosted in France. The 2020 report also listed amazon.fr, based in France, noting alleged high levels of counterfeit goods on its platform (Note: Other Amazon sites were also included in the report: amazon.ca in Canada, amazon.de in Germany, amazon.in in India, and amazon.co.uk in the United Kingdom.)
In line with President Macron’s campaign promise to clean up French politics, the French parliament adopted in September 2017 the law on “Restoring Confidence in Public Life.” The new law bans elected officials from employing family members, or working as a lobbyist or consultant while in office. It also bans lobbyists from paying parliamentary, ministerial, or presidential staff and requires parliamentarians to submit receipts for expenses.
France’s “Transparency, Anti-corruption, and Economic Modernization Law,” also known as the “Loi Sapin II,” came into effect on June 1, 2017. It brought France’s legislation in line with European and international standards. Key aspects of the law include: creating a new anti-corruption agency; establishing “deferred prosecution” for defendants in corruption cases and prosecuting companies (French or foreign) suspected of bribing foreign public officials abroad; requiring lobbyists to register with national institutions; and expanding legal protections for whistleblowers. The Sapin II law also established a High Authority for Transparency in Public Life (HATVP). The HATVP promotes transparency in public life by publishing the declarations of assets and interests it is legally authorized to share publicly. After review, declarations of assets and statements of interests of members of the government are published on the High Authority’s website under open license. The declarations of interests of members of Parliament and mayors of big cities and towns, but also of regions are also available on the website. In addition, the declarations of assets of parliamentarians can be accessed in certain governmental buildings, though not published on the internet.
France is a signatory to the OECD Anti-Bribery Convention. The U.S. Embassy in Paris has received no specific complaints from U.S. firms of unfair competition in France in recent years. France ranked 23rd of 180 countries on Transparency International’s (TI) 2020 corruption perceptions index. See .
Resources to Report Corruption
The Central Office for the Prevention of Corruption (Service Central de Prevention de la Corruption or SCPC) was replaced in 2017 by the new national anti-corruption agency – the Agence Francaise Anticorruption (AFA). The AFA is charged with preventing corruption by establishing anti-corruption programs, making recommendations, and centralizing and disseminating information to prevent and detect corrupt officials and company executives. The French anti-corruption agency guidelines can be found here: . The AFA will also administrative authority to review the anticorruption compliance mechanisms in the private sector, in local authorities and in other government agencies.
Contact information for Agence Française Anti-corruption (AFA):
Contact information for Transparency International’s French affiliate:
10. Political and Security Environment
France is a politically stable country. Large demonstrations and protests occur regularly (sometimes organized to occur simultaneously in multiple French cities); these normally do not result in violence. When faced with imminent business closures, on rare occasions French trade unions have resorted to confrontational techniques such as setting plants on fire, planting bombs, or kidnapping executives or managers.
From mid-November 2018 through 2019, Paris and other cities in France faced regular protests and disruptions, including “Gilets Jaunes” (Yellow Vest) demonstrations that turned violent, initiated by discontent over high cost of living, taxes, and social exclusion. In the second half of 2019, most demonstrations were in response to President Macron’s proposed unemployment and pension reform. Authorities permitted peaceful protests. During some demonstrations, damage to property, including looting and arson, in popular tourist areas occurred with reckless disregard for public safety. Police response included water cannons, rubber bullets and tear gas.
Between 2012 and 2020, 270 people have been killed in terrorist attacks in France, including the January 2015 assault on the satirical magazine Charlie Hebdo, the November 2015 coordinated attacks at the Bataclan concert hall, national stadium, and streets of Paris, and the 2016 Bastille Day truck attack in Nice. While the terrorist threat remains high, the threat is lower than its peak in 2015. Terrorist attacks have since been smaller in scale. Security services remained concerned with lone-wolf attacks, carried out by individuals already in France, inspired by or affiliated with ISIS. French security agencies continue to disrupt plots and cells effectively. Despite the spate of recent small-scale attacks, France remains a strong, stable, democratic country with a vibrant economy and culture. Americans and investors from all over the world continue to invest heavily in France.
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
|French Statistical source*||USG or international statistical source||USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other|
|French Gross Domestic Product (GDP) ($M USD)||2019||$2,762,036||2019||$ 2,715,518||www.worldbank.org/en/country|
|Foreign Direct Investment||French Statistical source*||USG or international statistical source||USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other|
|U.S. FDI in France ($M USD, stock positions)||2019||$69,160||2019||$83,826||BEA data available at
|France’s FDI in the United States ($M USD, stock positions)||2019||$258,106||2019||$310,743||BEA data available at
|Total inbound stock of FDI as % host GDP||2019||33.2%||2019||32.1%||UNCTAD data available at
* French Source: INSEE database for GDP figures and French Central Bank (Banque de France) for FDI figures. Accessed on March 19, 2021.
|Direct Investment from/in France Economy Data 2019|
|From Top Five Sources/To Top Five Destinations (US Dollars, Millions)|
|Inward Direct Investment||Outward Direct Investment|
|Total Inward||868,686||100%||Total Outward||1,532,818||100%|
|The Netherlands||117,249||13%||The Netherlands||203,426||13%|
|“0” reflects amounts rounded to +/- USD 500,000.|
*Note: These figures represent the stock of foreign direct investment (FDI), not the annual flow of FDI. The United States was the top investor by flow of FDI in 2020.
|Portfolio Investment Assets as of March 2021|
|Top Five Partners (Millions, current US Dollars)|
|Total||Equity Securities||Total Debt Securities|
|All Countries||2,857,162||100%||All Countries||812,317||100%||All Countries||2,044,846||100%|
|United States||374,725||13%||United States||99,638||12%||The Netherlands||244,554||12%|
|United Kingdom||216,814||8%||The Netherlands||55,323||7%||United Kingdom||179,367||9%|