National results for France reflect the combined results
for two major cities: Marseille and Paris. Total business
costs in Marseille are 2.3 percentage points lower
than in Paris. Since 2014, suburban office lease rates
in Marseille have risen sharply, as compared to a small
decrease in office costs in Paris. Combined with higher
labor cost growth in Marseille, these factors result in a
narrowing of the 4.0 point cost advantage that Marseille
held over Paris in 2014.
Among the four study sectors, France’s national ranking
ranges from eighth for corporate services to fourth
for R&D services. France’s generous R&D tax credit
system, which includes a refund option for unused
credits, results in France having the lowest effective
corporate income tax rate among all study countries in
the R&D services sector.
The rise in value of the US dollar relative to the euro
in 2015 is the primary driver of France’s improved
cost index in 2016 and the significant improvement in
rankings for the two French cities. The euro also lost
value relative to the UK pound, allowing France to move
ahead of the UK in the current rankings. However, other
cost trends as noted in the table also contribute to
France’s overall results in the current study.