Indian investment: The French connection

Invest in France Agency (IFA) is a nodal agency that provides assistance at every stage of the investment process that takes place in France. The agency works closely with 22 French regions to act as an investor's main contact, providing legal and tax advice, help during the set up process and after care service. The quality of service provided by IFA to new businesses is key to the success of foreign investment projects in France. David Appia, president, IFA, speaks about the attractive areas and incentives to attract Indian investment in France.

What are the incentives for Indians to invest in France?

Some of the usual factors that attract international investors to France include the country's central location at the heart of the European market, its unparalleled networks of infrastructure, its highly qualified and productive workforce and its dynamic policy to foster innovation. There is much more to consider: landmark reforms have been implemented during the last two years to modernize the economy, to introduce more flexibility in the labor market and to promote entrepreneurship and international business mobility. In terms of incentives, the new R&D tax credit may help Indian companies based in France reduce their R&D expenditures by 30%, offering a 50% reduction during their first year of business. In term of business mobility, Indian companies with a base in France can benefit from two new residency permits: skills and expertise and the expatriate employee. These new tools improve the procedure and conditions offered to top Indian managers and staff members who wish to work and reside in France with their families.

Please specify the areas which are suitable for Indian investment in your country?

According to the 2009 UNCTAD report on FDI, France ranked first in Europe and second worldwide as the destination for inward FDI last year. Most French regions and sectors receive foreign investment. Europe is a relatively new destination for Indian investors. Their investments in France started in 2003-2004, and today, Indian companies employ more than 6,000 people in our country. They are investing mainly in ITC, engineering and life science. But they have increasingly shown interest in the car industry, mechanical engineering, logistics, aerospace, steel & metal, renewable energies and the food industry.

How will the economic meltdown affect investment in France?

Owing to recession, FDI flows reduced by 20% worldwide in 2008, but France has resisted quite well, attracting 20% of the total FDI coming to Europe. The number of new projects from foreign companies creating jobs in France remained stable. What do investors look for and what can France offer them? A strong economic and industrial foundation, a stable political and legal environment, a dynamic and forward-looking government, a stimulus package focusing on 1,000 investment projects, sectorial policies to cope with the adverse impact of the crisis, a solid financial and banking system, ongoing structural reforms to prepare for the post-crisis rebound, in addition to the usual factors that make France the second most attractive country for FDI.