News & Events
What You Need to Know – International Business Experience
- November 18, 2020
- Posted by: Aradhana Pandey
- Category: Education
Per my last few blog posts, I have mentioned that I am not a French native, though I have been studying the French language for over eight years. In addressing the French job industry and its practices, I found it difficult to speak on something I knew little about. In wanting to give prospective business students, entrepreneurs, and professionals an accurate representation of French business practices abroad, I decided to contact one of my old bosses. Recently, I’ve had the privilege to interview Gilles Bonkoski, Executive Director of the French-American Chamber of Commerce (FACC) and Founder of Ouistart. I met Gilles while I was an intern for the FACC (which unfortunately, was cut short for undisclosed reasons). During my time, I worked under him creating campaigns and working with the FACC to help French businesses transitioning from France to the USA . All the while, I was learning a little bit more of French little by little, in an office with many native French speakers.
Gilles is an exceptional business professional, having started and owned several businesses. Having earned a bachelor degree in physics and a graduate degree in International Business, Gilles has worked as an Account Coordinator for Young and Rubicam. He then moved on to work for SFR Business, a telecommunications company based in Paris, France. Nine years later, he spent the year completing a travel documentary, and later went on to serve as the FACC Director. In addition to serving as Director and becoming a founder of OuiStart, he was also the owner of Carpe Di Air, which worked on aerial advertising campaigns. All the while, he is fluent in French, English, and Italian.
When I sat down and asked Gilles about the political obstacles in France, he immediately stated the two main obstacles included taxes and paperwork. In France, taxes are hefty and take a toll on a lot of businesses. Many corporations struggle to pay them from year to year. For the American entrepreneur wishing to expand abroad, this might be a struggle. According to the Tax Foundation in 2019, France was #15 for the highest corporate tax rate in the world, at a whopping 34.5%. In 2019, the US had a tax rate of 21%, which is 13% lower than its predecessor according to the Tax Policy Center. So, if you are a foreigner looking to expand your business abroad to France, set aside extra cash to be able to pay off all the necessary taxes you will encounter.
As far as paperwork goes, it can take months. Gilles said in comparison to the United States, France’s process is a lot slower and time-consuming. In the US, most of the paperwork can be done in a matter of days. So if a business professional or entrepreneur wishes to conduct business overseas in France, it will take a lot longer to establish an enterprise in France than it would in America. Patience is a necessity if a business professional is serious about expanding abroad in France.
Gilles said when it came to French business moving to the US, immigration laws and language barriers were the hardest obstacle. However, in France, language barriers are not as much of a problem as it would be in the USA. In fact, according to the local.fr, 57.25% of French speakers have “reasonable proficiency” in English, with Paris topping over 60% of its population being able to speak in English. In terms of immigration, going back to the paperwork, you must register under one of 5 categories your business may fall under. Then, according to Expactica, an online community centered on helping people transition abroad, you must decide what type of business structure you are running: a sole trader, or a larger company. These different categories are necessary for tax purposes, so make sure whichever one you choose is the one that fits your specific business.
When it came to labor issues, Gilles told me the main difference between France and the US when it came to labor was the type of contract with the employee. In the US, he said that most employers have an at-will contract. In short, this means that the employer in the US can fire the employee at any time, without reason. For instance, if the employee puts in a two-week notice, they don’t have to honor the two-week notice: they can let them go sooner if they wish. However, in France, there are laws that prevent employees from being fired for no reason. Gilles stated bosses cannot just fire a worker because they want to, so there is an added level of protection for the workers. If an employer wants to fire someone, they must have a specific reason: for instance, cheating, theft, breach of contract, etc.
Advertising practices, Gilles says advertising in France is similar to the US. Many French companies pay for their ads to show on TV, spending. Many French companies use search engines such as Google to display pop-up ads. Social media such as Facebook, YouTube, Instagram, and Twitter are all channels in which French companies utilize to reach prospective consumers. According to statistica.com, it stated “the digital advertising expenditure was forecasted by IREP and GroupM to reach around 3.7 billion euros in 2018.” In the USA, ad spending amounting to 242.54 billion U.S. dollars in 2020, which was significantly lower. So although the methods in which advertising was conducted are similar according to Gilles, France only spends a fraction of what the US spends on paid media.
Since Gilles has not worked for a telecommunications company since 2011, he said most of the laws that were in place at SFR Business have probably changed. However, he said that in comparison to the US, France businesses tend to be a hub for technical innovations that the US companies do not have, which is something the US has difficulty in providing. In France, the government is big on reducing gas emissions and providing technology to help curb climate change. Whereas in the US (with the exception of California), many people are still heavily reliant on gas-powered engines.
Given these facts, tech companies moving to France would need to be aware that France is extremely eco-friendly in comparison to Americans. What this doesn’t mean is that if you are a tech company, don’t move to France. In fact, there are many tech start-ups in France according to Gilles, so it may be a great fit for you and your business if you choose to move abroad. However, if you do plan on moving abroad, being aware of the environment will be helpful in preventing costs, but also being able to compete with other corporations in France.
Overall, there are some big differences in the way that Americans and the French conduct business. However, the biggest takeaway Gilles gave me was that in each country, there are pros and cons when it comes to the laws. Whereas the at-will contract benefits the business in the US, in France, the laws which prevent employment termination make it harder for businesses to fire their employees. Advertising will be a change, since businesses spend less on it in France. However, the channels in which advertising takes place will not be much of a barrier. In the end, it’s up the entrepreneur or the business itself to decide whether to take on the endeavor of expanding their operations to France.
Nakia is an International Business major with an emphasis in French and Western Europe.
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