France woos Singapore companies

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http://www.todayonline.com/business/france-woos-singapore-companies?singlepage=true

While France may be best known for its fashion, art and cuisine, government officials are proactively attempting to raise the country’s profile in other fields to attract new foreign business investments to accelerate its fragile economic recovery.

And Singapore companies that are innovative and ambitious are especially welcome, said Mr Serge Boscher, managing director of Invest in France Agency (AFII), which is in charge of promoting international investment in the country.

Singapore companies operating in France — including the likes of Nubefy, Cassis International and QAF — are part of a bigger international community that is still growing. Last year alone, about 700 overseas companies set up shop in the country, AFII data showed, generating around 30,000 jobs.

The drive to attract more foreign investment comes as the country’s economic recovery in the wake of the global financial crisis is still very tentative: The unemployment rate remains at about 10 per cent and data this week showed the French economy failed to grow in the first quarter.

As well as the prevailing economic uncertainty, other issues that Singapore companies may find off-putting include high business costs arising from France’s tax and labour welfare regime.

The country’s corporate income tax rate is currently 33.3 per cent, much higher than that in neighbouring Germany and the United Kingdom. Meanwhile, employers’ contributions to social security — akin to Singapore’s Central Provident Fund — can be as high as 50 per cent of a worker’s wage.

Aware of the disadvantages, the French government — led by President Francois Hollande’s Socialist Party since 2012 — is slowly but surely putting in place measures to create a more business-friendly environment.

These include a €30 billion (S$52.5 billion) labour cost reduction programme announced earlier this year to exempt companies from certain social security contributions.

International Enterprise (IE) Singapore also sees potential in France, with niche opportunities in two key sectors in particular: Aerospace and lifestyle.

Ms Yeoh Mei Ling, centre director for Europe at IE Singapore, noted that France, which is the home of Airbus, has the largest aerospace sector in Europe with a robust sub-assembly chain.

Ms Yeoh added that for Singapore’s lifestyle companies, especially in fashion, France is a key market to build their brand and international mindshare.