How to export to… France
France, one of our closest neighbours in the EU, is a prosperous export market for many UK businesses, as well as acting as a stepping zone into other European countries. With the world’s fifth largest economy and 65 million inhabitants, a long history of trade with the UK, and connections to other regions such as Africa and the Middle East, it’s a popular choice for more and more UK businesses. Here's a guide to get you started exporting to France.
Benefits
There are several benefits for British businesses exporting to France, such as:
- Easy transport links from the UK – you can get a ferry, a flight, Eurostar and more. If you're a EU citizen you can pop over with no bother, helping you suss out suppliers and other admin
- Similarities to the UK in terms of demographics and tastes
- Close to the UK, and just a one hour time difference
- Large open market
- Located between northern and southern Europe, it’s a useful gateway to other countries
- Location of the headquarters of many major European corporations, and strong commercial links to other EU countries
- Plus, it’s the most popular tourist destination in the world!
Challenges
As it’s a fairly similar market to the UK, there isn’t much of a culture shock – businesses that do well in the UK often do well in France too. However, there tends to be quite a bit of beaurocracy (more on this below!)
Challenges include operating in a different language (if unsure, enlist the help of an interpreter), and French businesses can be wary of buying outside France. Take care to be extra reassuring about quality, price and reliability, be persistent, and maintain contact through regular meetings.
To avoid misunderstandings, ensure that you check any contracts with a lawyer, especially if you’re doing something like setting up a subsidiary company (see below).
What businesses do well exporting to France?
High-performing sectors for businesses exporting to France include alcoholic spirits, automotive components (such as tyres), and jewellery.
There are also opportunities for UK businesses in areas such as food and drink, fashion, giftware, and DIY products. When it comes to food and drink and other products, practically anything that sells in a British supermarket can sell in France.
Routes to market
When exporting to France you can either:
- Directly export, subject to general British exporter’s terms
- Use local representation to sell directly (ie have a distributor in France)
- Sell through a local branch in France (ie set up a branch of your business, or a subsidiary company.)
If you sell through local representation, you can do it through a French commercial agent, a local representative office, or a distributor who buys to resell, known as a Voyageur Représentant Placier (VRP). And if you set up a French subsidary company, you’ll need to register with the local Chamber of Commerce in France.
Taxes
VAT
As France is part of the EU, if both the British and French businesses are VAT registered the export will be zero rated. Check out our guide to exporting in the EU for more information.
Company tax
Corporation tax for French-registered companies is generally 33.33% of profits.
Income tax
If you’re carrying out a professional activity in France, check with a lawyer to see if you need to be paying income tax – it’s levied on royalties, company dividends, pensions and salaries.
Avoid faux-pas
As with any country, there are some things that are worth bearing in mind when doing business. In France, you should:
- Avoid using first names
- Address people as Monsieur or Madame – show respect for hierarchy
- If you’re speaking French, only the formal ‘vous’ form should be used – the informal ‘tu’ can be read as lacking respect.
Here’s the experience of VSU-funded entrepreneur Rafael Dos Santos, founder of Room In The Moon and This Foreigner Can.
“France can be very bureaucratic. I lived in Paris in 2004 and my partner at the time was a French businessman setting up a big business. I saw how difficult is in terms of paperwork to get things going there, and if you are doing business with the French you must be prepared to prove everything you say and have everything in order. They like everything being stamped and signed for.
“I normally take on interns from French universities during the summer time, and I can see that paperwork and bureaucracy is not only in business. The contract must be signed for, stamped, and copy of documents sent with originals.
“It can be a bit daunting at the beginning and I have seen a few people give up doing business with the French because of the bureaucracy. I know every business is different but if you are going to do import and export with these countries, you must have a company stamp at hand at all times!
“Another thing to note is that people in France can use words that, translated, do not mean anything to you or means something completely different - so before you get offended or puzzled, send an email back and ask what they mean, especially if you are British!”
Image credit: Flickr Creative Commons
