Guidance

Overseas business risk: France

Updated 22 February 2021

Information on key security and political risks which UK businesses may face when operating in France.

1. Political and economic

The COVID-19 crisis drove the French economy into its deepest recession since the Second World War, with GDP contracting by 8.3% in 2020 after Government-imposed lockdowns and restrictions to economic activity. This contrasted with a relatively good pre-crisis outlook in 2019 when the economy showed resilience against a backdrop of global trade disputes and widespread domestic social unrest driven by the Gilets Jaunes and strikes – with high job and business creation putting unemployment on a downward trend. Prospects for 2021 remain uncertain, but the Government is hoping for a significant economic rebound in the second half of the year.

Since March 2020, the Government has focused on the economic response to COVID-19. This includes emergency measures to support access to finance and protect jobs and skills, including state-backed loans, a solidarity fund for business, short-time work schemes, and social charge cuts. The Government upgraded the above policies according to the health and economic situation and spent a total of €180bn (7.8% of GDP) in 2020. The economic response also included plans to support strategic industries such as aerospace, automotive, tourism and tech, worth €40bn (1.8% of GDP) overall.

The Government has made clear that it will continue to support the economy as long as the crisis lasts, in line with President Macron’s “whatever it costs” approach. However, it is also looking at medium-term issues and the post-COVID-19 economy. It began to deliver a €100bn (4% of GDP) domestic recovery plan, whose objective is to bring the economy back to its pre-COVID-19 levels by 2022. The plan prioritises the environmental transition (eg transport, housing renovation, business energy transition), competitiveness (eg cuts in business taxes, investment, innovation) and regional/social cohesion (eg support to youth employment, health, research, and local government), addressing the short-term consequences of COVID-19 but also longer-term economic challenges.

France has also taken first steps to design a post-crisis fiscal strategy, including a medium-term fiscal consolidation trajectory and the handling of the COVID-19 debt. The Maastricht deficit is forecast to reach 11% of GDP in 2020 (up from 3.1% in 2019) and public debt 120% of GDP (up from 99% in 2019). Government borrowing reached a record high in 2020, although low interest rates reduced the debt service significantly. The French authorities are also expected to seek more flexible EU fiscal rules under the Stability and Growth Pact.

Despite COVID-19, President Macron has reaffirmed his commitment to the pro-business economic transformation agenda, which he has delivered since his election in 2017, including the on-going reforms of pensions and unemployment benefits. These are expected to follow pre-COVID-19 reforms targeting the labour market (eg easing restrictions on redundancies) and taxation – to make work pay, increase competitiveness, as well as encourage investment, innovation and risk-taking (eg cuts in corporation tax, reform of the wealth tax, gradual abolition of the council tax).

2. Human rights

France is a member of ILO and transposes all the directives. France is a founding member of the Council of Europe and subject to the jurisdiction of the European Court of Human Rights (which is based in Strasbourg). France has similar levels of gender equality as the UK.

According to the 2020 Gender Equality Index published by the European Institute for Gender Equality, France ranks third in the EU: a positive move up from seventh place in 2010. Racial hatred and hate crimes are banned and the police enforce the law. France is a secular country, and the state neither recognises nor funds any religious group. The right to marry and adopt children for gay couples is now enshrined in law.

The right to strike is protected by the Constitution. There is no restriction on the right to strike, outside of key public services, apart from minimum service in the transport industry. Many French state workers regard striking as acceptable action, and the right is regularly exercised.

3. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case, it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere. According to Transparency International’s Corruption Perceptions Index, France ranked 23rd out of 180 countries in 2020. (Denmark was 1st and the least corrupt; the UK was 11th.)

Read the details of steps taken by France to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.. OECD is due to provide an update at the end of the year on how France is tackling bribery and corruption.

Read the information provided on our anti-bribery and anti-corruption page. See also the World Bank’s Ease of doing Business rankings where France ranked 32nd in 2019.

4. Terrorism threat

Please refer to the section on terrorism in the FCDO travel advice.

5. Protective Security Advice

Please see the FCDO travel advice for France in which there is a section on safety and security.

6. Intellectual Property

IP rights are territorial i.e. they only give protection in the countries where they are granted or registered. There is no single European patent; a European patent is a “bundle” of individual national patents. If you are thinking about trading internationally, then you should consider registering your IP rights in your export markets.

For information on registering your intellectual property in France, you should contact the L’Institut Nationale de Propriété Industrielle.

Read the information provided on our Intellectual Property page.

7. Organised crime

L’Office central de lutte contre le crime organisé (Central Office for the Fight Against Organised Crime) in the French Interior Ministry coordinates efforts to track down and eliminate organised crime in France.

Organised crime between the UK and France primarily involves drug and human trafficking concentrated around the cross channel ports, but cyber crime is also a threat for both countries. Organised crime has been quick to take advantage of the opportunities offered by the internet, particularly the growth in e-commerce and online banking.

8. UK Export Finance

The government can provide finance or credit insurance specifically to support UK exports through UK Export Finance – the UK’s export credit agency. For up-to-date country specific information on the support available see UK Export Finance’s country cover policy and indicators.

9. Contact

Contact the Department for Business and Trade (DBT) team in France for further information.

Please see the Exporting to France Guide for further information.