Vive la France!

Internationalization is on the cards for many French companies, observes Markus Hempel from the Paris office of Germany Trade & Invest (GTAI). As France’s closest neighbor, Germany is often the first port of call for French businesses aboard.

June 2020

 

Mr. Hempel, what has been your experience in Paris in the past few months?

The Corona period wasn’t an easy time for me and certainly most other people in France, as freedom of movement was very restricted. Families, in particular, struggled to cope with simultaneous home office and home schooling.

What are France’s economic prospects in the wake of this difficult time?

It’s not yet clear how France will deal with the corona crisis economically, even though the French government is trying to cushion the blow to companies financially. There is a trend towards a permanent increase in the importance of the digital economy (for example, edtech, online trading, etc.) and the health sector (digital health, strengthening local production, investing in research). French companies are strong in these areas and see Germany as their most important European market and a stable partner that has withstood the Corona crisis relatively well.

You started working at GTAI Paris as an investor recruiter last year, before the pandemic outbreak. What were your impressions in those first months?

Markus Hempel: I was really surprised at how much France had changed in recent years. You could feel a completely new dynamic here. This was partly due to the government, which was on a drive to reform. The economy gained new confidence as a result, and businesses were expanding beyond French borders. There was a great interest in Germany, for example. The first few months were also very exciting personally. I saw Paris from a completely different vantage point with my four children.

The GTAI Paris office is located near the famous Eiffel Tower in the 15th arrondissement near the Javel metro station. Every day the office receives enquiries from export-oriented French companies wanting to know how they can gain a foothold in the German market. GTAI Paris, 18 rue Balard, 75015 Paris, France © Pixabay

France is Germany’s largest neighbor and the two countries enjoy a close relationship. Do you still need to explain to your French clients why they should consider investing in Germany?

Hempel: It’s true that most French people know a lot about Germany, and many French entrepreneurs and business managers are naturally interested in the country. Germany is often the first choice when French businesses go international. Nevertheless, or precisely because of that, lots of things need for discussion. There are still huge cultural differences between the two countries, and, of course, there’s the language barrier.

What do your clients want to know about Germany?

Hempel: They often ask how to target investments to gain a foothold in the German market. There is also strong interest in how small- and medium-sized enterprises – owner-managed German companies – work. They are often very attractive business partners for French companies.

Why are the French attracted to Germany as a business location?

Hempel: Export-oriented companies are in particular interested in investing in Germany. Not just because of its large sales market, but because a German location makes expansion into Eastern Europe much easier. Companies value the fact that Germany offers a secure investment environment, and we’re regarded as punctual and reliable. Moreover, I keep hearing that business partners in Germany are very open to cooperation. It is usually no problem for a French company to arrange a meeting with a German company.

Markus Hempel started working at the GTAI office in Paris in the summer of 2019 and has been facilitating French investment in Germany since. He previously studied studied in both Germany and France and worked in France for several years. He is also married to a French woman.

French companies operate in Germany across a range of sectors. Which ones attract the most interest from investors?

Hempel: The sectors where there are congruencies between France and Germany and the potential for reciprocity. Also the digital and business services sectors, where there are many French players. Environmental technology, medical technology, mechanical engineering and ICT were particularly active before the outbreak.

The IT sector in France was experiencing robust growth. Can you tell us why?

Hempel: There was a lively start-up culture here before the pandemic. Being an entrepreneur in France was considered sexy. But many of those up-and-coming entrepreneurs didn’t want to limit themselves to the French market and were focused on becoming active internationally as quickly as possible – first and foremost in Germany.

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