France sees record number of firms go bust
Dan MacGuill · 17 Oct 2013, 15:35
Published: 17 Oct 2013 15:35 GMT+02:00
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The number of businesses going bankrupt in France has reached its highest level in 20 years, despite the recent confirmation that the Eurozone’s second-largest economy had officially exited recession.
The figures, published this month by business consultancy Altares, revealed that 12,790 companies filed for bankruptcy in the third quarter of 2013.
That’s a 7.5 percent rise from the same period last year, and the highest summertime rate of bankruptcy since 1993, when 13,500 were registered.
The previous highest third-quarter figures came four years ago, when 12,657 companies folded between July and September of 2009.
French business bankruptcies over the last 10 years. Screengrab/Altares
Even more worrying, however, was the discovery that 90 percent of the bankruptcy procedures related to businesses with less than 10 employees.
There was also a 31-percent rise in the number of medium-sized companies (more than 50 employees) going under between July and September.
Bankruptcy is obviously something that expats in France are not immune to. For all the success foreigners have had setting up business in France there are enough horror stories out there of expat-run start-ups that failed to take off.
Andrew Denison, who runs Nice-based consultancy firm Mon Ami Andy, told The Local the possibility of bankruptcy is something that expats should be particularly aware of.
“Many expats set up a business in France because it’s been their dream, or it seemed like a good idea at the time,” he said.
“But things work very differently in France than in the UK or Ireland or the US, and it can often take expat business-owners by surprise.
“For example, expats are often used to do their own accounting, and looking after their own paperwork, and they balk at the idea of paying someone else to take care of this for them,” he added.
“But when they find they haven’t scheduled payments properly, and they’re late on filing paperwork to several different agencies and bodies at the same time, it can be overwhelming for them, and they throw in the towel.
“Certainly, the possibility of moving back home and starting again is a factor which often encourages expat business-owners to file for bankruptcy in France,” said Denison.
Click below for The Local's brief guide on going bankrupt in France and how to avoid it.
Geographically, the worst-hit region in mainland France was Nord-Pas-de-Calais, which suffered a 29.9-percent rise since the same period in 2012.
By contrast, the Limousin region of central France actually had 9.5-percent fewer bankruptcies than last year, and the Ile-de-France region including Paris fared worse than average, with a 10-percent rise in businesses calling it a day.
How the rise in bankruptcy affected every region of France. Screengrab/Altares