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Exporting to France: prospects and requirements

Exporting to France: prospects and requirements

In summary
  • France is the third destination market for Italian exports, accounting for 10.2% of the total, and in 2021 it reached approximately 53 billion euros.
  • The sectors with the greatest prospects are energy, water and waste, construction and machinery: Italy is France’s second-largest supplier of machinery after Germany.
  • For intra-EU exchanges, the Declaration of Assets (DEB) is required; it is not required for exchanges under 460,000 euros or the first exchange with an EU country.
  • French tariffs are low, averaging 4.2%, but textiles and agro-food products have higher tariffs and restrictive quotas.
  • The corporate tax has a standard rate of 25% from 2022, while the VAT has four rates: 20%, 10%, 5.5% and 2.1%.
Index

Many Italian companies are interested in export to France, facilitated by a high level of economic interdependence between the two countries, a unique feature in the European context. This close relationship is facilitated by geographical and cultural proximity, as well as predominantly intra-industrial trade, involving sectors such as automotive, pharmaceuticals, agribusiness and electronics. Although economic relations between Italy and France are already well established, there are still ample opportunities for growth. France is in fact the third target market for Italian exports, accounting for 10.2% of the total.

According to ISTAT data, 2021 was a record year for Italian exports to France, with the value reaching about 53 billion, exceeding 50.5 billion in 2019 and 45 billion in 2020. The main export sectors include mechanical engineering, automotive, steel, furniture, pharmaceuticals and fashion.

In addition to trade, economic relations between Italy and France are further strengthened by strong industrial integration, supported by growing mutual investment. Since 2015, Italian investment in the country has been steadily increasing, reaching about 32 billion euros, making France the top European destination for investment projects by Italian companies.

In this article we analyze the key aspects that characterize Italian exports to this nation, and the relevant regulations to be aware of.

Selling in France

Italian exports to France: what you need to know

Made in Italy enjoys wide recognition globally, especially within the European Union, where more than half of Italian exports (about 56%) are headed. Taking advantage of foreign markets therefore represents a great opportunity for Italian companies, fostering paths of internationalization outside European borders. Exporting to France, in particular, offers numerous advantages: among these are the geographical proximity, cultural affinity, shared values and strong political relations between the two nations. In addition, the country has experienced significant GDP growth in recent years, ranking among Europe's fastest-growing economies, making it a particularly attractive destination for Italian companies.

Exporting to France, the most popular products

The French market, although extremely competitive, offers numerous opportunities, including for the digital export. French consumers tend to prefer local brands, appreciate product quality, and value excellent customer service. Sectors such as fashion are particularly relevant, with buyers paying attention not only to quality, but also to factors such as sustainability, ethical production, and customization.

Italian design, with its perfect combination of tradition and innovation, exerts an irresistible attraction on French consumers.

In addition, the export of Italian food and wine products to France is growing steadily, thanks to the uniqueness and variety of products ‘Made in Italy‘.

The sectors with the greatest prospects for future growth are as follows:

  • Electricity, gas, steam, and air conditioning (also from renewable sources: France has seen steady growth in renewable energy production (+72% since 2005), with a target of reaching over 30% of energy consumption from renewables by 2030, supported by energy transition laws and a significant 2020 economic recovery plan that allocates 30% of resources to energy transition.
  • Water supply; sewerage, waste treatment and sanitation activities: France is the world's fourth largest market for eco-industries, with more than 7,000 companies in the sector, dominated by water and waste treatment, where multinationals such as Veolia and Suez Environnement play a key role; the privatization of municipal companies is also fostering an exchange of advanced technologies, with a strong contribution from Italian companies, in line with the French orientation toward the circular economy and sustainable resource management.
  • Construction: the French construction sector, with annual sales of more than 100 billion euros, is driven by public procurement, the green transition, and preparations for the Paris 2024 Olympics, with a focus on energy efficiency and infrastructure modernization.
  • Machinery and equipment: The mechanics and machinery sector is a major component of Italian exports to France, representing Italian excellence in know-how and technologies such as agricultural machinery and tools, and is particularly strategic for acquisitions of distribution networks and after-sales services, with Italy being the second largest supplier of machinery to France, after the Germany.

Selling in France, regulatory requirements and the tax system

With regard to customs clearance and import documents, intra-EU trade requires the Declaration of Goods (DEB). However, it is not necessary if the value of the EU goods does not exceed 460,000 € or if it is the first trade with the EU country.

For customs classification of goods, France uses NAF (Nomenclature of French Activities) and CPF (Classification of French Products). Since 2008, the updated NAF rev. 2 and CPF rev. 2 have been in force.

Customs duties in France are generally low, especially for industrial products, averaging 4.2%. However, sectors such as textiles and agribusiness are subject to higher duties and restrictive quotas.

Opening a company in France

The most common corporate forms 

If you want to export to France and open a branch in the territory, it is useful to know that the most common corporate forms include:

  • Limited Liability Company (SARL)
  • Single-member enterprise with limited liability (EURL)
  • Simplified joint stock companies (SAS and SASU)
  • Anonymous Society (SA)
  • General Partnership (SNC)

The “Loi de Modernisation de l'Economie” introduced measures to stimulate growth and employment, such as the Statute de l'Auto-entrepreneur, which facilitates the creation of small professional businesses with a simplified regime. In 2019, the government passed the PACTE law, aimed at simplifying regulations for SMEs, boosting their growth and export.

Corporate income tax (IS) applies to profits generated in France, with rates varying from 15% to 28% depending on profits and corporate structure. From 2022, the standard rate has been reduced to 25%.

The main taxes under the French tax system

The main taxes include:

  • Personal income tax (IR)
  • VAT (TVA)
  • Solidarity Tax on Fortune (ISF)

Personal income tax is progressive, with rates ranging from 0% to 45% depending on income. The TVA in France has four rates: the standard rate of 20%, a reduced rate of 10%, a second reduced rate of 5.5%, and a special rate of 2.1% for some specific products, such as reimbursable medicines.

Octagona is a consulting firm with extensive experience in internationalization and can assist you if your business goal is to export to France. We offer support at every stage of the process and help you penetrate this promising market. Contact us for more information.

Frequently Asked Questions

What is the value of Italian exports to France and what are the main exporting sectors?

In 2021, Italian exports to France reached approximately 53 billion euros, a record according to ISTAT, compared to 50.5 billion in 2019 and 45 billion in 2020. France is the third destination market, accounting for 10.2% of the total. The main sectors are mechanical engineering, automotive, steel, furniture, pharmaceuticals and fashion.

Which sectors have the greatest growth prospects for those who want to export to France?

The most promising sectors are electricity and renewable energy, water services and waste treatment, construction and machinery. Renewable energy has grown by 72% since 2005, with the target of over 30% of consumption by 2030. France is the fourth largest market for eco-industries worldwide and the construction sector generates over one hundred billion euros annually.

What documents are required to export goods to France within the European Union?

For intra-EU trade, a Declaration of Goods (DEB) is required. It is not required if the value of the Community goods does not exceed 460,000 euros or if it is the first trade with an EU country. For customs classification, France uses the NAF and the CPF, in its revised version 2 from 2008.

Which customs duties apply to products exported to France?

In France, customs duties are generally low, especially for industrial products, with an average of 4.2%. The textile and agri-food sectors are the exceptions, subject to higher duties and restrictive quotas. Companies in these sectors must therefore carefully assess the costs of entering the market.

What types of company structure can I choose to open a branch in France?

The most common corporate forms in France are the SARL (limited liability company), the EURL (single-person limited liability company), the SAS and SASU (simplified shareholding company), the SA (limited company) and the SNC (limited partnership). The 2019 PACTE law simplifies the rules for SMEs and encourages their growth and exports.

What are the corporate tax and VAT rates in France?

The French corporate tax (IS) ranges from 15% to 28% depending on profits and company structure, with a standard rate reduced to 25% from 2022. VAT has four rates: standard at 20%, reduced to 10% and 5.5%, and special at 2.1% for products such as reimbursable medicines.

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