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the UK, to receive job-creating investment from Israel, placing it ahead of Germany.
Several key Israeli companies, notably Teva Pharmaceutical Industries, Alrov
Properties & Lodgings, Bath France (Mr. S. Sagol), and Château d’Eau (TAMDA) view
France as a key market.
The legal system
The legal system is made up of both French and European regulations. The terms
and conditions of an investment or of an acquisition in France are according to
international standards.
Among the notable specificities, one can note that, with respect to resale of goods,
it exists a prohibition on fixing a minimum price, or against imposing a minimum profit
margin. For example, we have been involved in a transaction where the Israeli company
wanted to impose a minimummargin price on its French distributor. The parties had to
amend the business model of the transaction in order to adapt to French law.
Acquisitions
In acquisitions, the parties must verify whether the transaction must be approved by
the EU or the French competition authorities, in cases where the market shares of
the parties involved exceeds certain thresholds.
The other main differences between the Israeli and French legal systems relate to
Tax and Employment.
Tax
French corporate tax rate is of 33,33%, with a 15% rate for SMEs up to €38,120 of
earnings and for profits resulting from IP transactions. Companies that undertake
R&D expenditures may obtain a 30% tax credit deductible from the corporate
income tax, which may be refunded.
Employment
Legal working time in France is 35 hours per week but the average of the actual
working time is 39.4 hours per week. Working time can be organized differently for
the highest level of executives, who are excluded from working time regulations, and
for certain employees with executive positions.
The mandatory guaranteed minimum wage is €9.61/hour, i.e., €1,457.52/month for
a 35-hour week.
Companies with at least 50 employees must elect aWorks Council, which is in charge
of welfare and cultural facilities. It is informed and consulted on the employer’s
initiative regarding the organization and the management of the company (with no
veto right).
The French government has developed a variety of instruments to provide financial
incentives for businesses to create jobs and train employees.
Challenges but a great place to do business
There is no specific obstacle for Israeli companies to either invest in France, to set
up a presence there or to acquire a French company.
However, one should consider that the decision-making process in France is fairly
lengthy, compared to the Israeli norm.