This post is also available in: Japanese
I have written previously about the difficulties of doing business in France, particularly the amount of bureaucracy that has to be dealt with. The new French government under Emmanuel Macron has been trying to overcome this image problem by promising to deregulate and lower taxes, particularly for banks. There have even been advertising campaigns promoting the charms of Paris in an attempt to lure banks from London post Brexit.
So far this does not seem to be working for Japanese banks and financial services companies, who are largely choosing either Frankfurt or Amsterdam for their post Brexit EU base and in any case look likely to keep their broader European or EMEA coordination functions in London.
Financial services companies need to be based near where their customers are, so it is not surprising Japanese banks would choose Germany or the Netherlands over France, and not move too much out of the UK for the time being, as there are far more large Japanese companies, regional headquarters, and also Japanese expatriate staff in the UK, Germany and the Netherlands than in France.
I found, through my researches, that the Japanese companies with substantial presence in France reflect France’s traditional strengths of food and drink, imaging technology and fashion and beauty, along with automotive companies, which have a dominant presence across the EMEA region.
The EU Japan trade agreement and partnership will boost trade in the food and automotive sectors so it may well be that more Japanese companies will be looking at France again and French companies will also be trying more actively to do business in Japan.
Nonetheless, I am very reluctant to have a registered company in France, even though it is becoming clear it will be difficult for us to provide training to our clients in France if I do not have a legal entity there.
My researches into Japanese companies in France also revealed that Sony has shrunk its French workforce considerably over the past few years and that reminded me of the incident where the Sony France CEO and HR director were held hostage overnight by the workers of a Sony factory that was being closed down.
France has a long tradition of striking, protest and direct confrontation between workers and employers and citizens and their government. This attitude also impacts the way they do business – the City of London Envoy to the EU described in a recent memo how shocked he was to discover in his meeting with Banque de France that the French wanted a hard, disruptive Brexit, even if it came at a cost to the EU overall, and saw the City of London as adversaries, not partners.
I am not at all surprised by this, nor was it particularly surprising to read that the French military, teachers and local authorities are starting to protest about Macron’s proposed cuts and deregulation. We can expect plenty of strikes, demonstrations and blockades in the months to come.
This article originally appeared in Japanese in the Teikoku Databank News on 9th August 2017 and also appears in Pernille Rudlin’s new book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” – available as a paperback and Kindle ebook on Amazon.
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