March 2010 “ Innovation in France: Business & Research Opportunities with Lyon Urban Truck & Bus Cluster ” © IFA

Keys to understanding the new France2 An economy with a global outlook In 2009, France was the 3 rd leading FDI recipient in the world, topping the list of European countries, with US $ 65 billion of inflows (UNCTAD, January 2010) Source: World Investment Report 2010, UNCTAD  France was the 3 rd most popular destination in Europe in 2009 for the number of job-creating international investment projects  In 2009, foreign companies made 639 decisions to invest in France  39.2% of the equity of companies listed in the CAC 40 was under foreign ownership at the end of 2008 (€300 billion) Top 7 FDI recipients in the world, 2009 (US $bn)

Keys to understanding the new France3 A dynamic market at the heart of Europe France is the 5 th largest economy in the world, and the 2 nd largest in Europe million inhabitants 3 million companies 40 French companies among the world’s leading 500 (Germany: 39; United Kingdom: 26) After Tokyo, but ahead of Beijing and New York, Paris hosts more head offices of Fortune Global 500 companies than any other city in the world. 79 million tourists Sources: INSEE 2009 – Fortune Global 500 (2009) – ORBIS August 2009 Top 8 economies in the European Union GDP in 2009 (current prices, US $bn) Source: International Monetary Fund, “World Economic Outlook” database, April 2009 (Estimates)

Keys to understanding the new France4 France has superb transport infrastructure:  European airport hub Paris Charles-de-Gaulle ranked 2 nd by passenger numbers and 1 st for cargo in Europe  2 ports in the European Top 10 by tonnage: Marseille (4 th ) and Le Havre (6 th ) in 2008  The longest high-speed rail network in Europe with 2,000km of lines and the highest number of international connections  The 3 rd longest highway network in EU-27 countries (11,000km) and the 2 nd best road network in the world after Singapore Sources: ACI, July 2009 – Port of Rotterdam UIC 2009 – ERF 2009 / WEF 2009/2010 Source: Paris Region Economic Development Agency, January Rapid connections throughout Europe, North Africa and the Middle East

Keys to understanding the new France5 One of the most productive workforces in the world Number of hours usually worked per week in 2008 Source: Eurostat, EFT Series, 2009 France has the 3 rd most productive workforce in the world after Norway and the United States according to the International Labour Organization (2007, 2008, 2009), or Luxembourg and Norway according to the IMD (2009). * Excluding the public sector - Sources: IMD ILO Average number of working days lost every year to strike action* per 1000 inhabitants ( ) French managers work longer hours than their European counterparts France Italy Belgium Spain Germany EU-27 United Kingdom Netherlands Sweden Denmark Norway Managers Active population Japan Sweden Netherlands Germany France United States United Kingdom Italy Spain Belgium

Keys to understanding the new France6 Source: Atisreal, Europe Quarterly 2009 T1 Gross payroll costs in 2008 (inc. all social security contributions, € per year) Prime office rents in 2009 (m²/an) Paris (centre): €720 London (centre): €988 Frankfurt: €438 Lyon: €230 Director R&D Engineer Skilled Worker GERMANY €187,380€62,710 €41,665 FRANCE €173,280€47,370 €30,650 UK €139,950€31,250€17,970 Germany: 0.13 France: 0.07 UK: 0.12 Consumption between 2,000 and 20,000 MWh Some of the most cost-effective locations in Europe Source: Eurostat, July 2009 Source: fDi Benchmark/FT 2009 France offers particularly attractive payroll, real estate and electricity costs compared to its leading Western European rivals. Electricity rates for manufacturers in 2008 (€/kWh inc. VAT) Some of the most cost-effective locations in Europe

Keys to understanding the new France7 Some of the most cost-effective locations in Europe According to KPMG, business setup and operating costs* are lower in France than in Germany, Italy, the UK and the Netherlands. Cost index (Base: – United States) *Cost components: Labor Facility costs Transport Utility costs (electricity, natural gas, telecommunications) Corporate tax Source: Competitive Alternatives, KPMG’s Guide to International Business Location, Mexico - 1st Canada - 2nd United States - 3rd Australia - 4th France - 5th United Kingdom - 6th Netherlands - 7th Italy - 8th Japan - 9th Germany - 10th

Keys to understanding the new France8 IMF: “France is on the move” Improving the flexibility of the labor market  Work contracts adapted to companies’ needs: introduction of a “defined objective” contract lasting 18 to 36 months; extended probationary periods for workers and management employees.  Introduction of a “mutual agreement” procedure to terminate contracts between an employee and an employer. Over 150,000 termination requests approved since July  Since 2008, employers and employees have had more freedom to negotiate their working hours at company level, whether it be concerning overtime hours or management work schedules.

Keys to understanding the new France9 A tax system which encourages investment  Abolition of local business tax on productive investments as of January 1, 2010  The most attractive Research Tax Credit in Europe  Favorable tax regime for expatriates: exemption from income tax on up to 50% of total remuneration  Boost for international cinema productions produced in France: 20% of production costs refunded in the form of a research tax credit or rebate  Green taxation to support the growth of green business: - a “sustainable development” tax credit; an interest-free loan for household energy improvement works; - introduction in 2010 of a carbon tax to guide household and corporate consumption patterns towards clean energies, creating new markets for environmentally friendly products and promoting innovation. A competitive French corporate tax system A favorable effective corporate tax rate*: - on R&D operations: France is ranked 2 nd, ahead of the United Kingdom (3 rd ) and Germany (7 th ); - on manufacturing operations: France is ranked 4 th, ahead of the UK (5 th ) and Germany (8 th ). * rate which takes into account the tax bases in different countries Source : KPMG, Competitive Alternatives, 2008

Keys to understanding the new France10 3 multi-year residence permits, valid 3 to 10 years  “Skills and Expertise” residence permit, for foreign nationals undertaking an economic, cultural or scientific project in France.  The “Expatriate Employee” temporary residence permit, for foreign nationals working in France within a context of intra-group mobility.  A 10-year residence permit for foreign managers who have made an “exceptional economic contribution” to France, which is also extended to their family. These residence permits automatically give close family members the right to seek employment in France. France welcome foreign investors Improved tax information: A specific contact point has been set up to address requests from foreign taxpayers.

Keys to understanding the new France11 Innovation, innovation, innovation… 70 innovation clusters, stimulating shared public/ private research projects Sources: IFA 5330 companies participating in the clusters 528 foreign companies