What is the role of the French foreign investment agency in Russia?

Tasks of AFII agency

Mr. Clausen, please tell us about the objectives of the French Agency for Foreign Investment (AFII), which you represent in the Russian Federation. AFII was established by the French government in 2001 and operates as a state structure. The main objectives of our agency include:

• Attractionandsupport for foreign investorsto create new jobs in France;
• Improving economic competitivenessof the country on the international stage;
• Development of measuresthat contribute to improving the business environment.

Providing assistance to foreign companies

Our agency provides extended assistance to foreign enterprises to speed up administrative processes and facilitate interaction with public institutions. From the moment of first contact, both in France and abroad, investors can count on professional support at all levels of investment projects. Our specialists are highly qualified and have an in-depth knowledge of local legislation, helping them to obtain financial and other preferences at both national and regional government levels.

Structure of the AFII organization

What is the structure of the AFII organization? The agency operates on a network model:

• The central office is located in Paris, which performs general coordination and support functions;
• Regional offices operate in 22 countries around the world.

A new office was opened in Moscow in the summer of the previous year.

AFII Partner Club

Since 2005, we have organized the “AFII Partners Club”, which brings together French companies specialized in accompanying foreign investors. This club includes:

• Consulting firms;
• Banks;
• Insurance companies;
• Engineering companies;
• Project Offices;
• Promoters;
• Recruitment and outsourcing organizations.

All club members have undergone a rigorous screening process to ensure that they provide high quality service and meet investor expectations.

Commencement of operations in Russia

Why is AFII starting its work in Russia only now? Unfortunately, Russia is not a major capital exporter and the number of Russian companies in France is very limited. All investments from Russia in France amount to only approximately €1 billion, and since 2003, only ten projects have been implemented, creating 735 jobs. It is noteworthy that in 2009 France ranked only eighth among the countries where Russian investments in the European Union were directed.

Establishment of AFII representation

The establishment of an AFII representative office in Moscow should not only change this situation, but also increase interest in Franco-Russian investments on the part of Russian businessmen. Previously, the possibility of representing our agency's interests in Russia was limited to one employee in a trade mission, which significantly narrowed the chances for an in-depth dialog with potential investors. We expect that the efforts made by our Moscow office will help to revise the attitude towards the French market and make it more accessible and attractive for entrepreneurs from Russia.

Objectives of communicating with investors

Our program is aimed not only at attracting new investments, but also at creating a solid base for future joint work and strengthening business ties between the two countries. We hope that the efficient operation of our new office will help us to establish successful partnerships and implement significant projects that will benefit both Russia and France. We strive to be a reliable partner for investors, providing them with all the necessary information and assistance to ensure that their investment initiatives are successful and yield results.

Impact of the opening of the new office on the Year of Russia and France

Does the opening of our new office affect the Year of Russia and France? This year, celebrated simultaneously in both nations, is of great importance for strengthening ties between these countries. It plays an important role in realizing the objectives of deepening Franco-Russian cooperation, which is fully in line with AFII's strategies.

We actively participated in the economic forum in St. Petersburg in June 2010, where France was strongly represented, and were also present at the September forum in Sochi, which emphasizes the importance of our participation in key economic events.

Future cooperation with Russia

As for our future interaction with Russia, over the last year and a half we have seen a clear increase in interest in Russian businesses entering Western European markets. Russian companies are setting up branches, entering into partnership agreements and acquiring local assets. Thanks to the strong ties and stable political situation between our countries, France is becoming an attractive platform for Russian firms wishing to enter European markets and then develop their activities in Africa and the Middle East. Therefore, opening an office in Russia was an important strategic step for us.

Cooperation with investors

What kind of investors are we establishing cooperation with?

France's attractiveness for investment

In fact, France is a very promising country for investment. Our country's economy is the second largest in Europe, which gives entrepreneurs access to the European Union's huge market of about 500 million customers.

Moreover, according to 2009 data, with $65 billion in foreign direct investment, France ranks third in the world ranking and first in Europe.

The developed infrastructure of the country significantly simplifies and accelerates business processes not only with European countries, but also with the regions of North Africa and the Middle East.

Costs of starting a business

According to a KPMG study published in 2010, the cost of starting a business in France is significantly lower than in Italy, Germany, the United States and Japan. When compared with other European countries, France offers attractive conditions characterized by:

• reasonable labor prices,
• real estate,
• electricity.

It is also worth mentioning that, according to the International Labor Organization, France ranks third in labor productivity, behind only Norway and the United States.

Tax incentives for startups

Special attention should be paid to tax incentives for startups:

• it is possible to deduct 50% of development costs from the tax base in the first year,
• the second 40%,
• in subsequent periods - 30% with the maximum amount not exceeding 100 million euros.

Investors can also take advantage of a special tax program that reduces the income tax rate to 50% of profits.

Professional migration for investors

What opportunities exist for professional migration of investors? France offers a variety of programs that allow investors to obtain a residence permit for a period of three to ten years. For example:

• The “Competence and Talent” card is intended for those who implement projects in the spheres of economy, culture or science,
• Employee on Travel card for employees traveling to France according to their corporate affiliation.

It is also fair to allocate a resident card for significant contribution to the economic development of the country.

Economic zones with special tax conditions

Are there economic zones with special tax conditions in France? Yes, investors can take advantage of temporary tax preferences in different regions or special economic zones, which is aimed at stimulating their economic progress. Local authorities have the right to grant full or partial exemption from local taxes for those businessmen who are ready to carry out the expansion of their production facilities or to acquire businesses that are in a difficult market position. Such tax exemptions are usually valid for five years.

Investments in economic projects

Is your agency interested in investing in economic projects with a capital of 3 to 4 million euros, for example, in the tourism sector? Absolutely, if such initiatives will contribute to the creation of new jobs. We are open to suggestions and ready for various forms of cooperation that can bring significant benefits to both entrepreneurs and the economy of the region.

Conclusion

In concluding our conversation about the mission and work of the French Agency for Foreign Investment (AFII) in Russia, I would like to emphasize the importance of the role we seek to play in strengthening economic ties between our countries. The opening of our Moscow office is an important milestone in this process and confirms our intention to actively promote the interests of Russian investors wishing to enter the French market.

Despite existing stereotypes and misunderstandings, we recognize that many businesses need additional support and understanding to feel confident about entering new markets. Our job is to break down myths and provide quality services that will make the process easier and simpler. The French government's willingness to implement economic reforms and improve conditions for foreign investors is not just words, it is action that we see in practice.

Prospects for cooperation

The prospects for cooperation between Russia and France are promising. We see a growing interest of Russian companies in European markets and are ready to offer them the resources, expertise and support they need to successfully implement their investment projects. Partnerships with cities, regions and private enterprises in this direction are a key aspect of our work.

Cultural understanding

I also hope that through our activities we will be able to promote not only economic but also cultural understanding between our countries. I am confident that our joint efforts will lead to a significant improvement of France's image as an investment partner.

AFII's main tasks

Thus, AFII is ready to become a reliable bridge between Russian investors and the French economy, providing all the necessary conditions for successful cooperation and mutually beneficial projects. The most important thing for us is trust and open dialog with our partners, and I am sure that together we will be able to achieve great heights.