France is the world’s fifth largest economy, and with 65 million inhabitants it has Europe’s second largest consumer market – so if you’re thinking of exporting to France, it’s a pretty big market to aim for.
It’s also a stepping stone for other eurozone markets and a geographical hub for business within European Union (EU), it’s a geographical hub for anyone wanting to do business within Africa and the Middle East.
Services generate 80% of Gross Domestic Product (GDP) and the economy is built upon a number of world class industries, including Europe’s largest aerospace and nuclear industries and the second-largest agri-food and chemical industries.
France also has Europe’s third-largest Information and Communication Technology (ICT) and pharmaceutical sectors.
Here’s everything you need to know about exporting to France…
What are the pros and cons of exporting to France?
France can be a pretty insular place, and French businesses can be wary of buying from outside France. If you can convince your French counterparts that your product or service is reliable, quality and reasonably priced, then you could have a deal, particularly if you’re in any of the top 10 industries currently exporting to France, which include:
- Machines, engines and pumps
- Electronic equipment
- Aircraft, spacecraft
- Medical, technical equipment
- Organic chemicals
Aside from being just across the channel from the UK, the benefits of exporting to France include a large, open and diversified market and similar demographics and status to the UK.
The strengths of the French market include:
- a strategic location between northern and southern Europe
- excellent internal transport network with motorways and high speed trains
- strong political, commercial and transport links with Germany and other EU and Mediterranean countries
- most popular tourist destination in the world – there were about 80 million visitors in 2012 which generated around € 77 billion
The main challenges of the French market include a resistance to outside cultures and nationalities and the frequency and severity of industrial action.
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How does tax work in France?
A double taxation agreement exists between the UK and France, so tax isn’t paid twice – once in each country – on exported goods and services.
VAT is known as Taxe sur la Valeur Ajoutée (TVA) in France, and is charged at 20%.
Income tax rates in France are:
Excise duty needs to be paid on any alcohol, alcoholic drinks, energy products, electricity or tobacco products you send to France.
How will I be affected by customs in France?
The internal EU single market allows for the free movement of goods and services without any import duties being applied, and testing is mandatory for some imported goods, especially technical and electrical equipment.