How to Do Business in France

How to Do Business in France

France is the world’s 5th largest economy and the 3rd largest in Europe, behind only Germany and the United Kingdom. Its placement within the European Union is a vital one, making it a favourite export and import destination for surrounding nations. France is also known for having the highest Human Development Index (HDI) in the world, making it one of the world’s most sought-after destinations.

 

The French economy has gradually shifted from a state-dominated structure to a privately-owned one, a process made much more evident with the 2017 election of President Emmanuel Macron. This process has gradually drawn funding from the public into the private sector, opening the floodgates for international importers and exporters.

 

France’s central location within the European Union is a benefit to international businesses as well. The country’s coastal geography makes it ideal for transatlantic imports and exports. As well, France’s climate makes it one of the world’s most valuable agricultural areas. By category, wine and liquor is France’s 4th most exported good. Can it get any better?

 

The US is currently France’s largest foreign investor. One major upside of international trade with France for US businesses is the proposed Transatlantic Trade and Investment Partnership (T-TIP). The T-TIP partnership, conducted between the United States and the European Union, further bolsters one of the most important bilateral trade relationships in the world.

 

The T-TIP looks to broaden trade possibilities between the US and EU-affiliated nations by increasing access to European markets. This will help American businesses large and small compete in the global economy through a market that is known for its red tape. The plan promises to create 13 million American and EU jobs, while offering greater trade compatibility and transparency between France and US small businesses.

 

The T-TIP partnership, conducted between the United States and the European Union, further bolsters one of the most important bilateral trade relationships in the world.

 
 

Introduction to France

 

Major Cities

 

Popularity

Paris and Lyon, the most populated and tourist-attracted cities in France, are popular destinations for international business endeavors and suppliers. Though French cities are not particularly known for their openness to entrepreneurs, there are less-visited cities that are considered key to potential international and domestic investors.

 

Startup Centers

France Startup Centers

Lyon is historically considered the country’s most business-friendly city, but Toulouse has recently taken this crown in terms of technology start-ups. In fact, the city is being considered France’s answer to the Silicon Roundabout and Silicon Valley in London and California respectively. These cities are a great start when scoping out France for potential business operations, and knowledge of them will be critical when negotiating meetings and deals.

 

Currency

After deciding that France is a worthwhile international business opportunity, there is basic logistical information to know before pursuing your venture. First, France does not have a national currency, but has adopted the Euro. Since the EU’s inception in 1999, the Euro has remained a stable currency, and has prevented issues with runaway inflation. As well, this stability makes France, among other EU nations, enticing to international investors.

 

Language

 

Disparity

Unsurprisingly, France’s official language is French. As one of the world’s most popular tourist destinations, English speakers are not uncommon there. However, France is considered one of the worst countries in Europe for fluent English speakers. In fact, it has been famously noted that English is often frowned upon if spoken to natives of the country.

 

This has been largely debunked, however. Frequent French travelers and businesspeople have said that the younger generation in France is increasingly open to conversing in English, especially if genuine interest in the French language is shown. As English and French are linguistically comparable, using Google Translate or Siri for informal conversations or navigation is recommended.

 

Holidays and Traditions

The working week in France differs widely from the US. In 2000, legislation was introduced to lower the standard working week from 39 to 35 hours for companies with 20 or more employees, and the remaining businesses were included in 2002. This is in line with France’s commitment to establishing work-life balance, which contributes to its Human Development Index. This is important to keep in mind when conducting business in and if expanding to France. In addition, there are certain holidays that may affect business operations, which we have listed below:

 

In 2000, legislation was introduced to lower the standard working week from 39 to 35 hours for companies with 20 or more employees, and the remaining businesses were included in 2002.

 

 

HolidayDateObservance
New Year's DayJanuary 1Nationwide
Good FridayFriday before Easter SundayOnly in Alsace and Moselle regions
Easter MondayMonday after Easter SundayNationwide
Labor DayMay 1Nationwide
Victory in Europe DayMay 8Nationwide
Ascension Day39 Days after Easter SundayNationwide
Bastille Day, French National DayJuly 14Nationwide
Assumption DayAugust 15Nationwide
All Saints DayNovember 1Nationwide
Armistice Day, End of World War I DayNovember 11Nationwide
Christmas DayDecember 25Nationwide
Boxing DayDecember 26Only in Moselle, the Bas-Rhin, and the Haut-Rhin regions

 

Communication from the US

To call someone residing in the country, the phone code is +33, which will be added before the area code to successfully make calls. For example, the code for the US and Canada is +1.

 

Traveling to France

If conducting business remotely isn’t possible, or if you just want a chance to see the City of Lights, traveling to France yourself is always a great option. There is some documentation required depending on length of stay, but the EU generally simplifies potential travel issues.

 

Visas and Permits

As with other nations, a valid passport is required to enter the country and should be kept on hand during your stay. However, if you choose to extend your visit for any reason, you may need to apply for a “long stay visa.” Generally, visitors spending up to and exceeding 90 days require a long stay visa, which will last up to 12 months depending on the reason for your stay. A link to the application for the visa can be found in the “Resources” section. If you want to know more, we’ve written a guide catered to your visa questions and needs in France.

 

The long-stay visa also acts as a Schengen visa, which allows visitors to travel between 26 EU nations without hindrance. Because of the geographical convenience, this visa is useful for networking, seeing the sites, and other travel purposes for international businesses.

 

Using a Cell phone in France

Before traveling to France, make sure to contact your cell phone service provider to ensure your phone will work. Currently, about half of all US cell phones will work in France and other places in Europe. But there are other options, just in case.

 

You could get a SIM card that, as well as actually working, will come preloaded with a specific plan for temporary use. The most popular way to do this is to buy one at an Orange Boutique. The “Holiday” card works for 14 days after first use, and comes with 120 calling minutes, 1000 texts, and 10GB of mobile data. These will run you about €40 (about $47USD), and require ID and your passport to successfully register for one. There are cheaper options, including Labara Mobile. You could also temporarily rent an entirely new cellphone, but many travel sites advise against this, due to exorbitant fees and difficult tracking of data usage.

 

If you’re burning through your data, all major French cities offer free-to-use WiFi hotspots and locations. France’s tourism website boasts 400 WiFi hotspots found in 260 locations around Paris, with systems such as this available in Bordeaux, Nice, and Marseille as well.

 

Trade Shows

France is known for the sheer amount of trade shows and events hosted there each year. In particular, Paris is often considered Europe’s top trade show destination. This makes France a fruitful place for small businesses looking to network, scope the market, promote their products, or find a supplier in an international market. Here are three tips for success when traveling to Francefor a trade show.

 

  • Identify the decision makers. If participating in a trade show, be aware of who visits your booth. Higher-ups don’t do the dirty work of scoping out potential investment. Avoid French business’ painfully slow hierarchy by using LinkedIn and other platforms to find the higher ups. Keep your eyes open for the people you really need to sell to.
  • Be prepared. The logical approach of French business people is meant to weed out the unprepared. Having the numbers and case studies as proof is vital for making a great first impression in France.
  • Don’t lose your cool. Formality is king, and keeping your composure when conducting business is a must. This also goes for trade show appearances. Don’t let the chaotic atmosphere affect you. Stay mannered, well-behaved, and collected.

 

 

With these tips, your small business is sure to have success in the French tradeshow environment. For your convenience, here’s a list of a few of the major trade shows hosted there:

 

WhatWhere
WhenWhat about
Glassman Europe; International Glass Manufacturing ExhibitionLyonEvery Two YearsManufacturing
Innov-Agri Grand Sud-Ouest; Innovative Agricultural FairOndesEvery Two YearsAgriculture
Equipmag; Shop Fitting Equipment and Technology ExhibitionParisEvery Two YearsManufacturing
Gourmet Food and Wine Selection; Gastronomy and Wine FairParisEvery Two YearsFood and Beverage
Salon de L’Automobile de Lyon: Lyon International Motors ShowLyonEvery Two YearsAutomotive, Manufacturing
JEC World Composites ShowParisOnce YearlyManufacturing, Processing

 

Business Culture

Small business culture in the US differs slightly from that of France. A general rule is to keep everything formal, often even more so than we’re used to. However, there are specifics that are important to know when doing business in France.

 

Meetings don’t take place on a whim. Everything is scheduled, and drop-ins are a no-no. It’s recommended that appointments for meetings are made two weeks in advance. Being punctual is vital. It establishes your reliability and trustworthiness as a business partner who is invested in the deal. Even if meetings seem informal, and take place in an informal setting, these formalities still apply.

 

Deals and strategies are usually planned on a long-term basis. Business in France takes time, and patience is important. Though being on time is key, be prepared to stay a while. Let your potential partners control the pace of the meeting. Being antsy or trying to speed up the process instills distrust and can come off as disingenuous.

 

Ace the business lunch. If a meeting doesn’t take place at the office, it’s usually at a restaurant. These lunches can take a while, lasting up to two hours. Be sure to compliment the food. French culture hinges on its cuisine and is taken very seriously. Being a bit over the top with your praise is recommended. Even doing some research on the cuisine of the particular region, if you aren’t in Paris, can make a big difference in a business deal.

 

Be prepared for interruptions. It’s common for someone to “cut in” on a conversation, change the topic, or introduce a new idea. It’s not considered rude, and promotes the free flow of thought that is highly valued in French business. This may seem odd with the focus on formalities and manners, but, at the end of the day, ideas and making business as fruitful as possible reigns. Lean on the formal side, but don’t let that stop you from contributing.

 

The French have a familiar, but still specific, business model. Knowing the particulars and having good posture should ensure successful business dealings.

 
 

Business Communication

As in many countries, the French prefer to do business in person. Email or phone calls won’t do, as French business people highly value formality, punctuality, and tradition when dealing with domestic or international partners. Communication, then, is everything. Being aware of the conversation style and method in France is vital in business negotiations, especially for foreign investors. We say this because the French are known, in business and other dealings, to be more critical of international partners than their national fellows. First impressions are vital, and the way you communicate can make or break a deal.

 

Coupled with the preference for French partners is the assumed dislike of English speakers. Though this may be overestimated, playing it safe is your best bet. Knowing a few French words and phrases will take business deals a long way. Even addressing meeting attendants as “Monsieur” and “Madame,” greeting with “bonjour,” and even replacing please with “s’il vous plait” will show a genuine interest in your business partner’s culture, language, and country. Here’s a list of a few easy words and phrases to learn before heading overseas.

 

Along with learning French phrases, becoming familiar with French gestures, and even using some yourself, further proves your cultural knowledge. Though not as physical as the Spanish or Italians, the French have their own nonverbal communication cues. These gestures are used for emphasis and may even reveal some undertones in the conversation that weren’t said aloud. Keep an eye out for these movements and be prepared to read between the lines.

 

The French are formal in their speech. Introduce yourself using your first and last name, and avoid using the first names of others unless invited to do so. Avoid slang, vulgarity, and other casual forms of speech when conducting business. This will come off as lazy and possibly disrespectful. The way things are said may be even more important than what is said for the French. Keeping this in mind will give you a leg up over competitors.

 

Business Etiquette: Do’s and Don’ts

French businesspeople value appearance, but that doesn’t just mean clothes. How you carry yourself can easily make or break a deal, and is important to the negotiating process in France. With that in mind, here are a few tips on how to comport yourself when conducting business across the Atlantic:

 

Dress Up

We weren’t kidding about the appearance stuff. For business meetings, be sure to impress with your dress: formal wear for men and women is vital. Even informal doesn’t actually mean informal. When invited to dress down, be sure to wear a jacket and tie. Don’t go cheap, and don’t go tacky.

 

Stick to Tradition

Your manners should reflect the formality that your dress will inspire. Though having good manners seems like an obvious tip, it can take you miles when doing business in France. In addition, there are some specifics that you may not know. For example, keeping your hands out of sight during a business lunch is considered rude. For more information on how to nail the French business lunch, check out our guide.

 

It’s Nothing Personal

Separating business and your private life is important in France’s business world. Though there may be some small talk to begin a meeting, business and personal lives should never mix. Even questions about family are, sometimes, too intrusive. It’s best to keep it professional, and to only discuss the matter at hand.

 

Don’t Be Late

Punctuality is vital in French business. Meetings are scheduled for certain times, and it’s expected that they will take place at those times. There’s no room for surprises. Though meetings might take a while, business in France starts at exact times. Be early if you have to. You may come off as disinterested in the business deal, and generally unreliable if you’re late. Be on time.

 

 

Business Negotiations

French business negotiations, like most other nations, have specific ins and outs that are important to master. Whether you’re importing or exporting, supplying or getting supplies, deals must be dealt, and negotiating is an inescapable task. What works with some, however, may not work with others. This is a general outline for negotiating business in France that can give you a competitive advantage.

 

Formalities

Once again, be formal. Stick to the plan. Business dealings in France do not veer from protocol, and the process is just as important as the outcome. Small talk before business is fine, but once the serious stuff begins, it will remain that way. Stay focused, poised, and tactful in your negotiations. If you flinch, your potential partners will take advantage. Or, possibly even worse, you may be considered an unworthy business partner.

 

Use Your Head

Logic is king. Along with sticking to the plan is allowing the logical progression of an idea or plan to play out. In France, negotiations should “show, not tell” potential partners how a deal will work, and how it will succeed. Facts, extensive analysis, and proof will dominate the negotiating process. Failing to follow suit will allow the other party the opportunity to pounce. Don’t be illogical, and follow-up your ideas with proof of concept. This may take the form of charts, past successful dealings, market analysis, anything that proves that you’ve done your homework, and that their investment will not go to waste.

 
 

In France, negotiations should “show, not tell” potential partners how a deal will work, and how it will succeed.

 
 

Speak (at least some) French

Learn the language. Though it seems like a big ask, this may be the best negotiating tactic we can offer potential importers and exporters. The only thing that France values more than their food is their language, and at least seeming interested or educated in it can go a long way in the negotiating process. If there’s no time to learn enough conversational French to get by, tackling a few words, phrases, and gestures will ease communication, and endear yourself to your potential business partner.

 

Slow Down

Be patient. Business dealings can take hours, positions can be restated several times, and are thoroughly explained. In addition, even after a deal is made, French business protocol is standard and rigid. Deals need to travel up the company ladder to be successfully ratified, and this process can seem bureaucratic in its formality. It takes time, and trying to rush through the process isn’t wise. Play the game. Sit back, and let the formalities take their course.

 

With these negotiation tactics and tips in mind, you will have a leg up in international dealings in France. Remember: logic, language, tradition, patience. Four keys to success in France.

 

Regulations and Permits

When conducting international business, there is certain documentation required depending on the reason and business type. Thanks to their membership in the European Union, France’s import and export documentation and other requirements are valid in all EU member states. Once acquired, these forms can be used to conduct business across Europe.

 

EU Requirements

 

  • The Single Administrative Document (SAD): The official written declaration to customs in France and across the EU. The form is completed by whomever is clearing the imported or exported goods, and includes quantity, labeling, and other product information. However, customs authorities may also allow the use of any commercial form that includes the identification information required in the SAD.
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  • Economic Operator Registration and Identification Number (EORI): Since July 1st 2009, all companies established outside of the EU are required to have an EORI if they wish to launch a customs declaration (for example, the SAD), or an import/export summary declaration. The number must be formally requested from the member state which the company trades with, in this case France.

 

France Requirements

In terms of business permits and the establishment of a business, France has its own national requirements aside from EU documentation. To run a business in France, even for foreign-based small businesses looking to expand internationally, investors are required to have a “Carte de commerçant étranger,” or business permit card. Business operators, foreign and domestic, require certain documentation to complete the permit process, which can take up to three months to complete. Here’s a checklist for what is required.

 

If you are exporting and selling products online to private consumers, as some small businesses do, you must be registered for a Value Added Tax (VAT) with the French Tax Office when the annual turnover of business-to-consumer revenue reaches €35,000, or just over $41,000USD. There are other special circumstances that may require businesses to register with a local VAT. For more information, on how to register for French VAT (and if you need to), check out our blog covering the in’s and out’s of this little-known part of doing business in France.

 

Beware

Though considered one of the best countries to live in the world, conducting business in France still leaves you open to certain dangers. Violence and corruption are low across the board, but certain scams may affect international and domestic businesses. In fact, these occurrences seem to be on the rise. Here are a few things for small businesses to watch out for when doing business in France.

 

Violence and corruption are low across the board, but certain scams may affect international and domestic businesses.

 
 

Banking Blunders

There has been a recent, five-year rise in banking scams across France as per data from the Ministere de L’Interieur. The statistics say that the number of households affected by a banking scam, including fraudulent withdrawals, almost doubled from 2010 to 2013, from 500,500 to 840,000. Though this seems more of a domestic issue, when transferring money abroad into the French banking system, the possibility of being touched by the scam is still present, which may cause friction in international business relationships. It may be wise to consider different payment options, like Veem, to transfer your funds across the Atlantic. Veem allows you to avoid banking fees, slow transfers, and breaches in security by sending money directly from you to your supplier or importer, in 60 countries around the world. Yes, that includes France.

 

Fraud

Business fraud is also expanding in France. The PwC released findings that 68% of French companies were affected by fraud between 2015 and 2016, a 13% increase from 2014. Again, this issue seems domestic, but international investors need to be aware of the possibility that companies they deal with may be vulnerable to fraud. By extension, small businesses are also affected. These scams are generally based online, with hackers invading account information, and other apparently secure files. Files that contain information about businesses that domestic partners maybe dealing with, including international businesses. Though this may seem like an unavoidable, inevitable fate with the recent hacks of the NSA and other government agencies, there are ways to avoid and possibly stop hackers from attacking your small business. For more information check out our guide on cyber crime in France and how to prevent it.

 

France is, as you would expect, a fairly safe place to invest, deal, and travel to. If you avoid the tourist scams and don’t take your geographical distance from the country for granted, business dealings in France should be a breeze.

 

Payments

One of the most important parts of any international business endeavor is funding. Financing operations abroad, paying suppliers, and currency exchange is vital to consider when importing and exporting. Though the euro has been historically stable, currencies do fluctuate. For example, in the past year, the euro has fallen from $.94 to $.84USD. Large transfers are easily affected by these fluctuations, and keeping track of them can be a hassle.

 

Funds sent to Europe, unlike goods, may be subject to additional charges, as they must be sent privately between parties. Depending on the method, sending payments to France can range from $15 to $45USD, especially if you’re using the wire transfer system provided by big US banks such as Citigroup or Bank of America. However, there are other options: international payments companies offer a range of options for sending your money abroad. One of those options is Veem.

 

Thanks to our unique system, small businesses can easily send, track, and keep a record of payments in 60 countries. Our system is fast and secure, providing small businesses with the tools they need to successfully invest in international markets without hidden fees. Veem operates in all participating EU nations, reflecting the openness and globalization that the union represents. Avoid frustration and stress, international business has enough of that already. Let us take care of your payments.

 

Resources

 

European Commission’s Guide to Completing the Single Administrative Document

Economic Operator Registration and Identification Number Information and Guidance

Checklist for Completing the “Carte de Commerçant Étranger,” or Business Permit Card

French Long Stay Visa Form Application

Information on the French Value Added Tax (VAT)

 

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