HSBC Treasury Management Profiles 2018 -

Current section, Introduction


France is the eurozone’s second largest economy. Its highly diversified economy benefits from a highly-skilled workforce, excellent infrastructure and world-class industrial sectors. GDP growth has been slow but steady since 2014 (0.9 per cent growth), standing at 1.1 per cent and 1.2 per cent in 2015 and 2016, respectively. The French national statistics agency, INSEE, has forecast growth of 1.9 per cent in 2017, a percentage point higher than that forecast by the central bank, the French economy’s best performance since 2011 (2.1 per cent growth), and a sign that the country’s recovery from economic stagnation is on track. The Banque de France expects growth of 1.7 per cent in 2018. Relatively high unemployment, standing at 9.7 per cent in the third quarter of 2017, remains a pressing issue. President Macron has introduced a number of reforms designed to make the labour market more flexible and to help bring the unemployment rate down to 7 per cent by 2022. France is also struggling with an ageing population and the associated social security costs. According to the Organisation for Economic Co-operation and Development (OECD), pension spending in France amounts to 14.3 per cent of GDP, one of the highest rates among OECD countries. The French government has announced plans to move to a universal pension system by aligning the current multiple schemes from 2018, which should reduce public spending and strengthen labour mobility.

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Legal and regulatory

  • A company is considered resident in France if it performs real economic activity or has its place of effective management in France
  • Foreign exchange and domestic currency (EUR) accounts can be held by residents both domestically and abroad. Resident domestic currency accounts are convertible into foreign currency
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts can be held abroad and are convertible into foreign currency
  • As of 1 January 2019, all transactions, including intra-SEPA zone transactions, above EUR 50,000 must be reported to the Banque de France on a monthly basis

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  • Resident and non-resident companies are taxed on their French-sourced income only
  • The standard rate of corporate taxation is 33.3 per cent – for 2018, a reduced 28 per cent rate applies to all companies but only on the first EUR500,000 of taxable income. The rate will be progressively reduced to 25 per cent by 2022
  • Withholding tax applies to dividends, royalties and payments to non-resident companies for services rendered in France
  • France is a signatory to the Multilateral Competent Authority Agreement, under which information will be exchanged between tax administrations, giving a single, global picture on some key indicators of economic activity within multinational enterprises. The first exchanges under the MCAA will take place no later than June 2018

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Payment instruments and systems

  • Cheques remains popular in France, particularly for retail payments, but their use is in steady decline due to a preference for electronic credit transfers for both high-value corporate and low-value retail payment transactions: in 2017, credit transfers accounted for 88.6 per cent of the value of all cashless payments. Payment card use is rising, accounting for over 50 per cent of all cashless payment transactions in 2017. Electronic money schemes, such as paylib and Lyf Pay are available. There are two types of bill of exchange in France: the lettre de change and the billet à ordre
  • France operates three national payment systems: TARGET2-Banque de France (T2-BF), an RTGS system, CORE, for low-value retail payments including cheques and SEPA.EU, a CSM for the Single Euro Payment Area. French banks have migrated to the SEPA.EU platform for SEPA direct debits. SEPA credit transfers will migrate to the system in September 2019
  • The Revised Directive on Payment Services (PSD2) was incorporated in to French national law on 13 January 2018

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Cash management

  • Domestic and cross-border notional pooling and cash concentration are permitted between resident and non-resident accounts
  • Central Treasury Units (Centrales de trésorerie) benefit from a special fiscal status that allows participants to avoid withholding taxes on interest paid to a non-resident sister or parent company and to dispense with the interest deductibility ceiling
  • Automated collection methods are used by the majority of medium-sized and large businesses in France. Most banks offer lockbox services

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Electronic banking

  • The SEPA-compliant Electronic Banking Internet Communication Standard (EBICS) is used in France. Large companies can also use SWIFT for Corporates
  • Internet and mobile banking services are provided by all of the country’s banks for both corporate and retail purposes. Approximately 72 per cent of internet users in France access online banking services

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To read the full report on France and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.



  • International Monetary Fund
  • National Institute of Statistics and Economic Studies
  • Banque de France
  • Organisation for Economic Co-operation and Development

The materials contained on this page were assembled in October 2018 (unless otherwise dated).



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