PARIS, Jan 27: A record number of businesses were created in France in 2006 as entrepreneurs took growing advantage of legal changes in recent years that have made it easier to start up firms, data showed on Friday.

National statistics office INSEE said 322,270 businesses were created, either as start-ups, the result of takeovers or the resumption of business activities. That was the highest on record and up 1.7 per cent from the previous year.

Start-ups accounted for 233,045 of that total, up 3.7 per cent from 2005.

INSEE said it did not yet have comparable data available for how many businesses went bankrupt in 2006.

Still, the latest figures mean that more than 1 million firms were created in the five years to the end of 2006 – meeting one of the goals fixed by President Jacques Chirac.

The data is also likely to be used as ammunition by the ruling centre-right UMP's presidential candidate, Nicolas Sarkozy, to show his party favours cutting red tape and giving new impetus to entrepreneurship.

"The conditions for setting up businesses were made more flexible, notably by the ... 2003 law on economic initiative which allows business creation to be more accessible and seems to give birth to a new generation of entrepreneurs," INSEE said.

This law notably reduced the administrative burdens involved in setting up a company.

A breakdown of the data showed that increases in business creation in construction, housing, business-to-business services, and the education and health sectors more than offset a decline in business creation in the industrial sector.—Reuters