The Karl Waheed law firm specializes in international mobility law and is a partner of the Invest in France Agency. It advises and assists multinational organizations on compliance with French immigration and labor regulations. In 2006, the French government asked the firm to assess the impact of these regulations on the mobility of multinational assignees. The firm’s recommendations were then broadly adopted in the groundbreaking Expatriate Employee status. Founding partner Karl Waheed offers an update on conditions for companies and their international employees in France.
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Reforms
Work and residence permits made easy
Posted by Invest in France Agency in Reforms; February 22, 2011
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“We are the only country in the European Union that shares a border with you: French Guiana!”
These were the words chosen by the IFA’s Managing Director, Serge Boscher, to open his speech to Brazilian investors gathered at the Hôtel Bristol in central Paris on December 14, 2010. Jointly organized with the Brazil Chamber of Commerce in France and under the distinguished patronage of Brazil’s Ambassador to France José Mauricio Bustani, this meeting of the “Brazilian Investors Club” in France was attended by some 50 experts and decision-makers from the two countries. The event was an opportunity to unveil France’s latest advances in labor law, taxation and mobility for foreign executives.
With a sizeable domestic market and a large pool of engineers and scientists educated at top colleges and universities, France is already a prime potential location for foreign technology groups and R&D operations. But it also holds another ‘trump card’ to swing decisions in its favor. A number of groups, including Huawei, Microsoft, and Intel, have cited France’s research tax credit (crédit d’impôt recherche – CIR) as one of the reasons for locating their R&D operations in the country. This tax credit, which covers 30% of R&D project expenditure (net after tax) puts France head and shoulders above the rest of Europe for R&D tax treatment.
Moreover, the 2008 and 2009 research tax credit programs incorporated an upfront research tax credit rebate for loss-making companies, with indefinite eligibility for SMEs. This rebate has since been helping to ease company cash flow management…
What are the sectors in which France and French companies are world leaders?
Anne-Marie Idrac: France is very well known for having centers of excellence, and there are many sectors in which French companies have established a competitive advantage through their advanced technology, business systems and marketing skills. These would include, in my opinion, aerospace, pharmaceuticals, agribusiness and value-added food production, and of course what France remains well known for throughout the world, its luxury goods sector.
But it is also important to remember that France has a highly diversified economy, combining strengths in both industry and services. Moreover, we are totally committed to develop new sectors in response to the fast-changing demands of today’s world. Among the priority sectors are those relating to the ‘green economy’, and developing the technologies and business systems needed to address the challenges of climate change. We are also continuing to build on our skills-base in IT and improve our centers of excellence in both biotechnology and nanotechnology based around sector-specific innovation clusters which act like magnets for best practice and greater competitiveness…
‘Turnkey Termination’
Posted by Invest in France Agency in Reforms; April 12, 2010
France has a simple and effective contract termination procedure called ‘termination by agreement’ (‘rupture conventionnelle’) that meets the needs of employers and employees alike. This new procedure for terminating contracts by mutual consent has proved to be very successful. In 18 months, nearly 250,000 agreements have been signed – over 600 per day! Employers and employees are clearly convinced by this new type of “amicable divorce”, which offers both flexibility and security.
Termination “flexicurity”
‘Termination by agreement’ has the advantages of flexibility, security and simplicity. The employee can receive unemployment benefits and the employer does not need to provide a reason for the termination. Both parties agree on an end date for the contract and no specific advance notice is required. A termination payment is made equal to what would be provided as a redundancy payment…
Companies to gain from the abolition of the local business tax
Posted by Invest in France Agency in Reforms; March 8, 2010
Tax relief of more than 20% on average
The abolition of the local business tax in the French government’s 2010 budget represents one of the most important tax reforms of recent years in France. Overall, businesses stand to gain significantly from this reform, as the current tax burden on companies established in France will be reduced by €6.3 billion (before the effect on corporate tax is taken into consideration). In 2010, the introductory year, these tax cuts will be even larger (€12.3 billion).
In practical terms, the cost to companies of making productive investments will be reduced by more than 20% on average for an investment made over 10 years. For industry, tax relief will amount to 32%, while for SMEs the benefits of this reform are even more tangible: companies with a turnover of less than €3 million will see their tax bill reduced by 50-60% (source: French Ministry for the Economy, Industry and Employment).
