France, a founding member of the European Union located in Western Europe, is one of the modern economies in the world and the second largest economy in Europe.
Economy of France is diversified across many sectors: nuclear power, metallurgy, electronics, telecommunications, machinery, chemicals, aircraft, automobiles; textiles, food processing; and tourism.
Financial services and banking are important part of the economy. The major French banks: BNP Paribas, Credit Agricole and Societe Generale are among the largest banks in the world.
France joined the Euro Area on 1 January 1999.
|Nominal GDP (2015)||Nominal GDP per Capita (2015)||Real GDP Growth (2015)|
|2 183.6 bln EUR (+0.02%)||32 800 EUR (+0.02%)||1.2 % (2014: 0.4 %)|
According to Eurostat, nominal GDP of France in 2015 was 2 183.6 bln EUR.
France underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.3% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 1.2% which was below the Euro Area average (1.6%) and below the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in France was 32 800 EUR.
France has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 6.2% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
|CPI, MoM (Dec 2016)||CPI, YoY (Dec 2016)||CPI, Year Average (2016)|
|0.3 % (Nov 2016: 0.0 %)||0.8 % (Nov 2016: 0.7 %)||0.3 % (2015: 0.1 %)|
According to Eurostat, inflation rate in France in 2016 expressed as annual percentages of average consumer prices was 0.3% which was above the Euro Area average (0.2%) and equal to the European Union average (0.3%). Inflation rates in 2017 - 2021 are IMF's estimates.
|Unemployment Rate (2015)|
|10.4 % (2014: 10.2 %)|
|Government Bond Yield (Dec 2016)|
|0.75 % (Nov 2016: 0.67 %)|
|AA (very high credit quality), outlook stable||Aa2 (high grade), outlook stable||AA (high grade)|
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in France are shown in Table 1.
|Natural person, resident||21.0 %||24.0 %|
|Natural person, non-resident||30.0 %||0.0 %|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
France signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between France and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
France signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between France and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
France signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in France|
|IGA in effect since 14 November 2013, Model 1|
France has FATCA agreement with the U.S. in effect since 14 November 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in France are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: French financial accounts hold in U.S. financial institutions will be reported to French authorities.
|Financial Market Development|
|4.6 (max 7.0), 31st out of 138 countries|
|5.7 (max 7.0), 32nd out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in France is scored 4.6 out of maximum 7.0 and ranked 31st out of 138 analysed economies. Soundness of banks is scored 5.7 bringing France into the 32nd place, trustworthiness and confidence of financial market is scored 4.7 (40th place).
|Maximum Protected Amount|
|100 000 EUR|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in France are summarised in Table 2.
|Scheme Participants||all credit institutions operating in France, branches of non-EEA banks, branches of French banks abroad|
|Scheme Exemptions||branches of EEA-banks (covered by their home countries)|
|Eligible Depositors||natural persons, legal entities|
|Covered Accounts||all deposit accounts (current accounts, demand accounts, passbook accounts, term accounts, home savings accounts, home savings schemes, etc.)|
|Covered Currencies||all currencies|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 2. Deposit guarantee scheme in France.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Euro)||Foreign Currency|
|Aaa (prime)||Aaa (prime)|
Local currency (Euro) deposit ceiling for France is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
|Average Deposit Rate (Nov 2016, EUR)|
|1.08 % (Oct 2016: 0.97 %)|
|Number of Banks|
|Consolidated Assets (2015)|
|6 940.13 bln EUR (-3.44%)|
|Recent Changes (2016)|
|new banks: 3, closed banks: 15|
Currently there are 565 credit institutions operating in France.
Recent structural changes (2013 - 2016) of the banking sector of France are summarised in Table 3.
|Number of Opened Banks||8||8||6||3|
|Number of Closed Banks||11||21||22||15|
Table 3. Recent structural changes in the banking sector of France.
The list of the most recently opened banks in France is provided in Table 4.
|BANK OF COMMUNICATIONS (LUXEMBOURG) S.A. (new)||November 2016|
|Berlin Hyp AG (new)||April 2016|
|Santander Consumer Banque (new)||January 2016|
|Crédit Immobilier de France Développement (new)||August 2015|
|CHINA CONSTRUCTION BANK (EUROPE) S.A (new)||July 2015|
|Australia and New Zealand banking group limited (new)||April 2015|
|Lombard Odier (Europe) S.A. (new)||March 2015|
|AGENCE FRANCE LOCALE (new)||January 2015|
|Mirabaud et Cie (Europe) SA (new)||January 2015|
|GE Capital bank limited (closed)||November 2014|
Table 4. The most recently opened banks in France.
All the credit institutions operating in France can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||90|
|Municipal credit banks||18|
|Specialized credit institutions||87|
There are 90 branches of foreign banks from 24 different countries in France. Table 6 shows 10 countries having the biggest number of branches in France.
|Country of Origin||Number of Branches|
|Iran, Islamic Republic of||4|
|Minimal Interest Rate||CIC||0.82 %||12 months (EUR)|
|Maximum Interest Rate||CIC||3.50 %||1 months (EUR)|
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|Minimal Interest Rate||CA Consumer Finance||0.70 %||6 months (EUR)|
|Maximum Interest Rate||CA Consumer Finance||1.50 %||84 months (EUR)|
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|Minimal Annual Costs||Fortuneo||0.00 EUR|
|Maximum Annual Costs||Société Générale||330.00 EUR|
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