1

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InvestIn France

2014

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France: the Gateway to a larGe and GrowInG market

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3

+15%+25%+14%

+39%

+4%+9%

European Union: #1 Market in the world

500m+ consumers and €12 600+bn GDP

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CE54 France at the heart

of a 500m+ consumer market

+5.7 %

+6.5 %-2.2 %

+2.5 %

+0.6 %

at the centre of the emea area: 32% of world GdP

AMERICAS EURoPE, MIDDlE EAST, AFRICA (EMEA)

ASIA

€ 18,500+bn € 17,300+bn € 14,700+bn

€ 2.03bn

€ 1.93bn€ 2.67bn

€ 1.57bn

€ 1.03bn

1. Eurostat, 2012 | 2. United Nations, Population Division, Medium Fertility | 3. CEPII, The Great Shift

Current GDP in billion of euros1

Population’s Growth2010-20252

Population’s Growth2025-20503

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CE76 Paris region, #1 economic

area in emea France is open for business

la Défense

#1 business district

in EMEA1

Paris region

#6in the world

for FDI2

Paris

#3 in the world

for HQ

la Défense

1,500 Head Quarters

15 of the top 50

world companies

over the past 10 years

6,500foreign investments

300,000 jobs created1

Average of

13 foreign investment decisions each week2

35% of GDP Inward FDI Stock3

#1 in Europe for foreign investment in the industrial sector projects4

#1 for US job-creating foreign investment in Europe5

2 million jobs in foreign companies6

#1world tourist destination

83m in 2013

1. Invest in France Agency | 2. Invest in France Agency, Job-creating foreign investment in France | 3. UNCTAD, 2013 | 4. E&Y, Baromètre de l’attractivité de la France 2013 | 5. E&Y, Baromètre de l’attractivité de la France 2013 | 6. INSEE1. INSEE | 2. KPMG, Global Cities Investment Monitor 2013, FDI 2008/2012

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CE98 world-renowned infrastructure

Haropa #5 largest port complex in Northern Europe, linking the ports of Paris, Rouen and le Havre: a major gateway to the European hinterland

le Bourget airport

Europe’s leading business airport2

Roissy-CDG Airport#1 freight airport in Europe

#2 for passengers less than 2hr away from all major European capitals1

2012

#3 high speed train network worldwide

2,000+ km high speed lines

Grand Paris ExpressA € 32 billion investment

200 km of new automatic metro lines Improved services to key economic hubs and airports

Two French ports

among the top 10 European portsMarseille: #3 world oil port

International supply chain connectivity #1 in Europe3

1. ADP, 2014 | 2. ADP, 2011| 3. The 2013 ESCAP International Supply Chain Connectivity (ISCC) Index

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CE1110 high quality, low carbon

& competitive electricity

least carbon intensive electricity3

GERMANY

8.60 C€/kWh

UK

11.39 C€/kWh

FINlAND FRANCE

6.79 C€/kWh 7.71 C€/kWh

SPAIN

11.65 C€/kWh

ITAlY

11.22 C€/kWh

#1 in the world for electricity

quality and availability1

#2 most competitive

electricity in Europe2

#9 most energy

competitive country worldwide1

Electricity prices for industrial consumers, 2013 (Eurostat)1. KPMG and Institut Choiseul, Global Energy Competitiveness Index, 2012 | 2. Eurostat, Electricity prices for industrial consumers | 3. EDF, Rapport annuel, mai 2012

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hIGhly skIlled and InnovatIve PeoPle

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CE1514

19

FranceGermanyItalySpain UK USA FranceGermany Spain UKUSA Italy Euroarea 15

21.7

FranceSwitzerlandGermanySouthKorea

Japan USA

12

FranceSwedenNorwayNetherlands UnitedKingdom

86

a leader in innovation supportive environment for research

#3 in the world for Science Nobel Prizes and Fields Medals3

#1 in Europe for graduates in science4

#3 for global innovatorsin the world1

More than € 5.2bnof corporate tax savings

More than 17,000 businessrecipients each year

including 2,000+ foreigncompanies

Paris Saclay #8 of MIT Technology

Review of World

Innovation Clusters

#1 in the EMEA area for fast growing startups2

1. 2012 Global Survey of R&D Tax Incentives, Deloitte

1. Thomson Reuters 2013 - number of global innovators among top 100 | 2. Deloitte Technology Fast 500 EMEA ranking 2013 - number of companies | 3. number of prizes and medals since 1990 (nobelprize.org and International Mathematical Union) | 4. Number of graduates in science per 1,000 of population aged 20-29 (2011, Eurostat)

CIRResearch tax credit:R&D spending up to

€ 100mn eligible

for a 30%research tax credit

France offers one of the most generous research tax incentives of the oECD countries1

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CE1716

CloSING

THE FU

ND

ING GAPA SUPP

oRT

IVE

ECo

SYST

EM

Investing in our Future France is a startup republic

French Tech accelerators: € 215m investment

for startup mentoring

€ 20bn super-high speed internet infrastructure

investment by 2022

100% national coverage by 2022

Industrial rejuvenation compact

34 sector-based programmes DRIVERlESS VEHIClES ElECTRIC PlANES AND NExT-GENERA-

TIoN AIRCRAFT EMBEDDED SoFTwARE AND SYSTEMS HIGH-SPEED TRAIN oF THE FUTURE ENVIRoNMENTAllY FRIENDlY SHIPS RECYClING AND GREEN MATERIAlS GREEN CHEMICAlS AND BIoFUElS MEDICAl BIoTECHNoloGIES DIGITAl HEAlTH-CARE BIG DATA CloUD CoMPUTING NANo-ElECTRoNICS

Innovation 2030 - worldwide call for tender ENERGY SToRAGE RECYClING oF METAlS DEVEloP-

MENT oF MARINE RESoURCES PlANT PRoTEINS AND PlANT CHEMISTRY PERSoNAlISED MEDICINE THE SIlVER ECoNo-MY - INNoVATIoN IN THE SERVICE oF loNGEVITY BIG DATA

Investing in the Future Programme

6 strategic sectors to foster growthand employment EDUCATIoN – SUSTAINABlE DEVEloPMENT – RESEARCH – INDUSTRY & SMES – DIGITAl ECoNoMY – HEAlTH

€ 3.5bn

€ 300m

In many ways, France is now a little like the new york startup scene was a few years ago. Young and passionate people are trying to create a working and coherent ecosystem. It’s an exciting time to be part of the French ecosystem. TechCrunch3

1. French entrepreneur and businessman founder and majority shareholder of Iliad Chief Strategy officer, Illiad, Iliad in Internet and digital media: € 1.8bn (Q2, 2013, +27% vs. 2012) | 2. Destinations for private equity investment in Europe, €bn; 2007/2012 EVCA/PEREP, 2013 | 3. Techcrunch, welcome to the French Tech Ecosystem, January 2014

UnitedKingdom

FranceGermanyItaly

71.2

45.741.1

15.9

540,000 new entreprises in 2013

+27% in industry

France is the#2 destination

for private equity in Europe2

€ 3 bn/year

over the next 10 years

Private

equi

ty

Bpifrance

Clu

sters,

incubators

& ac

ce

lerators

Sup

portive regulatory

The word ‘entrepreneur’ is French; it is in our dna. we do have a strong desire to start up things, to set up business.xavier Niel1

Low tax rate on capital gains, tax relief for corporate investment venture & a very flexible framework for crowdfunding

with € 42bn funding capacity, the French state-backed

economic development bank brings together

public and private sector funds to unlock finance

for smaller businesses and support innovation

71 clusters a nurturing ecosystem bringing together startups, labs, universities and big companies

environment

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CE1918 diligent and highly

skilled workforce the labour market reform

Highest productivity among large EU countries1

#2 in Europe for young graduates in science and technology2

3 French business schools

in top 10 Master degrees in management3

#4 world destination for foreign students4

Paris voted best city worldwide for students5

Highest amount of hours worked for managers & employees

among the top 3 European economies6

Significant step towards “flexisecurity” achieved with the 2013 labour Market Reformenacting a trade union and employers agreement

Several agreements reached in the automotive industry to boost the competitiveness of the two major French car-makers and different sub-contracters: salary freeze, longer working hours in exchange for a commitment to maintaining the manufacturing sites

Increased flexibility allows employers to reduce nominal wage and/or working time in exchange for a commitment to preserve jobs in cyclical downturns

Reduction in legal uncertainty in case of redundancy plans: choice for business between an agreement with trade unions or a review by labour authorities under a 21 day-fast track procedure, with shortened deadlines for appeal

Since the law was voted, the preferred option is negotiation with trade unions in 75% of cases

Towards more adaptability & predictability

1. oECD, labour productivity growth in the total economy, 2012 | 2. Eurostat, Tertiary graduates in science and technology per 1 000 inhabitants aged 20-29 years, 2010 | 3. The Financial Times, Masters in Management worldwide ranking 2013 | 4. Campus France 2013 | 5. Quacquarelli Symonds, Best Students Cities ranking 2013 | 6. Average number of hours usually worked per week by managers: 44.2 in France compared to 43.4 in United Kingdom and 43.3 in Germany. Source Eurostat 2013, (Q2-2013) / Average number of hours usually worked per week by employees : 36.2 in France compared to 36.2 in United Kingdom and 34.4 in Germany. Source Eurostat 2013, (Q2-2013)

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commItted to the Fundamental reForms our economy needs

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CE2322 French economy: back on track a strong commitment

to fiscal prudence

UK

France

Netherlands

Germany

Italy

Spain

104

102

100

98

96

94

92

90Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13

French bonds are among the most attractive in Europe (10 y)

French GDP back to its pre-crisis level

To restore the public finances is imperative for France, but it is also a European commitment. François Hollande, September 2012

In 2014, the issue for France is not merely to return to growth, as it has already begun to recover. The issue is rather for growth to be as strong as possible. François Hollande, January 2014

In 2013 the effort was two thirds based on tax increases and one third based on public spending cuts . we have said that in 2014 the proportion would be inverted. we are going beyond that. Pierre Moscovici, French Minister of Finance, September 2013

From 2015 onwards, deficit reduction will rest only on cuts in public spending

The debt-to-GDP ratio will decline from 2015 onwards

The rate of increase of general government expenditure consistently fell1

1. General government expenditure, rate of increase, yoy volume.

2.2%

At least

€ 50bnsavings between

2015 and 2017

1.7% 1%

2003/2006 2013 2014 20152007/2011 2012/2014

MORE TAX

LEssspEnding

2005

Public deficit Debt/GDP excluding eurozone support

2007 2009 2011 2013 2015 2017

-2,9 -2,3 -2,7 -3,3

-7,5 -7,1

-5,3 -4,8-4,1 -3,6

-2,8-1,7 -1,2

60

65

70

75

80

85

90

9591,8

UK

France

Netherlands

Germany

Spain

Italy

1

2

3

4

5

6

7

8

201420132012201120102009

LEss spEnding

LEssspEnding

MORE TAX

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CE2524 structural reforms the responsibility Pact

Nov. 2012

May 2013

July 2013 Oct. 2013

Spring 2014

Jan. 2014

Dec. 2013

Towards growth and jobs through justice and efficiency

A new comprehensive framework to ease the burden on business allowing them to unleash their potential

Banking SectorReform

Competitiveness Compact

labour Market Reform

Pension System Reform

Tax review

Vocational training Reform

Responsibility pact

€ 30bn tax-cuts

for businesses

Tax streamlining

we will only achieve stronger growth if everyone acts, including companies, as there will be no job creation in the long run without them.“

”we will continue to reduce labour costs by 2017 […]: € 30 billion tax cuts

“”François Hollande, January 2014

This is the reason why I proposed the

responsibility Pact.

The way it works is pretty straightforward: reducing corporate taxes and hindrances to business activities. In return, the Pact will lead to more people hired and more social dialogue.

François Hollande, January 2014

Reducing the regulatory

burden

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I have made this commitment […]: tax stability must be the rule, simplicity must be the French administration’s everyday behaviour and attractiveness must be the highest priorityFrançois Hollande, December 2013

cutting red tapeReducing the regulatory burden

Everything should be made easier for businesses. It is a condition for us to be more attractive, more modern, flexible François Hollande, January 2014

“Tell us once”Before 2017, the 100 most requested information from companies will be handed over to the administration only once

“Silence means consent” principle

Chaired by Thierry Mandon, Member of Parliament, and former Unibail-Rodamco CEo Guillaume Poitrinal

Pinpointing reforms to ease the administrative burden on businesses

Made of business representatives and experts including representatives of French affiliates of foreign businesses

Key areas for reform

one port of call for foreign investors’ relations with the state administration

Hiring & training

people

Starting a business

Public tenders

Running your

activity

Tax obligations

Relationship with trade

unions

Import & export

Growing your

business

Building & reforming production

sites

Relations with the admi-

nistration

1. « Relation de confiance »

tax streamliningTowards a simpler, more stable tax system

our ambition: a more predictable, stable and simple tax system in order to create a thriving business environment

we are committed to paying greater attention to the real impact on the business community and to avoiding frequent changes to the tax system that could deter investment.

A commitment

The government is committed to maintaining unchanged the 5 key probusiness tax credit schemes, including the research tax credit

In January 2014 the government started an ambitious reform to streamline taxes with a simpler tax system for businesses that allows them to plan with more certainty

A “Trust and cooperation scheme”1 between tax authorities and companies is already being tested by a dozen of firms (including two international companies). In exchange for increased transparency with the tax administration, these companies benefit from more services and less controls.

The reform is on !

Simplification High level Council

€ Open for business

France

World classinfrastructure

Fundamental reforms on track

Leader in innovation

tax stability must be the rule, simplicity must be the French administration’s everyday behaviour and attractiveness must be the highest priority

François Hollande, December 2013