Wednesday, May 27, 2015

France remains attractive but … – The

There are two years, the barometer of attractiveness EY sounded the alarm. France was then in danger of dropping against its British and German competitors. This stall has he held? “ The competition is always exacerbated, Frances is always on the razor wire in France but she resists ,” says Marc Lhermitte, Partner at EY.

Specifically, France 608 implementation projects registered in 2014, a figure up 18% compared to 2013, outdistanced only by the United Kingdom, which has attracted 887 projects and Germany, which accounts for 763 projects. On longer period, between 2009 and 2014, the number of projects increased by 15%. Very positive point, France is the top destination for foreign investment in Europe, even if, as EY over, 80% of projects are few creative site extensions jobs. In fact, jobs created through these projects fell 11% to $ 12,577 between 2013 and 2014. Since 2009, they were down 6%.

The creations of jobs fall

In the field of employment, France is an exception, since the jobs created have accelerated in most European countries. This is the case in the UK (+ 12% to 31,198 jobs), Russia (+ 34% to 18,248 jobs), Poland + 12% to 15,485 jobs), Germany (+ 9% to 11,327 jobs) or Romania (+ 6% to 10,892 jobs). Since 2009, they jumped 48% in Europe, 56% in the UK and 130% in Germany …

The reason? According EY, 44% of managers surveyed, against 35% in 2014, still regret the excessively high labor costs and the lack of apparent flexibility of the labor market. What injustice, one might think! Since 2013, all companies based in France benefit from the tax credit for Competitiveness and Employment (CICE), whose rate increased from 4% to 6% of payroll in 2014. It will increase 3 extra points next year.

Since January 1, companies also benefit from a reduction in employers’ social security contributions which total will amount to 40 billion euros by 2017. These measures particularly to France to display a labor costs in the manufacturing sector below that of Germany. As to the flexibility of the labor market, it is still wishful thinking to foreign investors, despite the signing of the Agreement on competitiveness and security of employment of 11 January 2013 which provides businesses with tools renovated flexibility. This is especially the case for competitiveness employment agreements, collective redundancies and social plans. This flexibility is reflected by the fact that fixed-term contracts have represented 83.6% of recruitments in 2014, contracts with an average duration was 10 days.

It seems that these efforts are still insufficient in the eyes of foreign investors, which explains poverty in employment projects.

Taxation is pointed

The burden of taxation is also challenged, causing relatively passive move the global headquarters or European, mainly to the UK, which currently has 57, against 20 for Germany and 11 for France. “ After having long competed with London, Paris has clearly stalled for five years in this area ” observes Marc Lhermitte. It is the tax rate on corporations too high? With tax optimization tools offered by the legislative, France did not really ashamed of the comparison, even if it can not compete on equal terms with tax havens. These include Ireland or Luxembourg. “ This is the taxation of people is questioned, the amount of income tax and the taxation of stock options ,” says Marc Lhermitte.

75% tax on incomes over a million euros – abolished on 1 January 2015 – and the return of the government on the taxation of capital gains on sales of securities were they damaged the attractiveness e France? The barometer does not say.


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