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France

Hollande seeking to seduce exiled French entrepreneurs

© Photo: Carlos Diaz/Facebook

Text by Sam BALL

Latest update : 2014-02-13

An embrace, both literal and figurative, of France’s exiled entrepreneurs marked the final day of François Hollande’s trip to the US on Wednesday as the French President went on a charm offensive in the heart of the America’s tech industry.

Hollande had travelled to California’s Silicon Valley to meet with expat French business leaders at the new “US French Tech Hub”, an incubator for French tech start-ups in the US.

There he came face to face with Carlos Diaz, a French entrepreneur who in 2012 founded a group calling themselves “The Pigeons”, set up as a revolt against Hollande’s planned doubling of capital gains tax to 60 percent.

In front of the photographers, Diaz asked Hollande for a hug. The President was all too happy to oblige.

In the words of Fleur Pellerin, France’s minister for the digital economy, the moment was a “demonstration of love" towards French entrepreneurs.

Hollande used his visit to California to announce measures aimed at encouraging new businesses to set up in France, including the idea of "talent passports", designed to allow creators, innovators and entrepreneurs to more easily gain a French visa.

Between 5,000 and 10,000 people could benefit from the scheme every year, said Hollande.

He also promised the adoption of a law next month that will promote the use of “crowd-funding” to help finance new businesses in France.

Brain drain

Hollande’s trip to Silicon Valley, the first by a French president since François Mitterrand in 1984, was meant to persuade business leaders, including many exiled French citizens, that France is not the enemy of the entrepreneurial spirit it is often painted to be.

When Diaz set up the Facebook page for The Pigeons, shortly after Hollande’s election victory in 2012, its membership quickly shot to more than 65,000 – a sign of the concern the Socialist’s proposed tax regime was causing among French businesses.

“I’ve never seen people so depressed. They’ve had enough, they are leaving,” one member said at the time.

The government subsequently dropped its capital gains tax plans.

But policies such as a new 75 percent top rate of tax, although this affected just 2,000 individuals, have led to accusations of an anti-business agenda causing a “brain-drain” from France to other countries, including the US.

Indeed, Silicon Valley is now home to an estimated 60,000 French expats, one of the largest diasporas in the world, while more than 300 French companies have offices in California.

With the French economy struggling, halting the exodus and convincing entrepreneurs to return home has become a top priority.

“France must recognize the dynamism of its entrepreneurs" and promote "the spirit of initiative", Hollande said on Wednesday.

US tech giants

But it is not just French expats Hollande was seeking to win over on his visit to California. He also met with leaders of some of the US’s largest tech firms, including Google executive chairman Eric Schmidt; Sheryl Sandberg, chief operating officer of Facebook; and Twitter chairman and co-founder Jack Dorsey.

Details of the  meeting were not made public, but Hollande is likely to have faced some difficult questions over his government’s attitude towards the tech industry, following several disputes with internet firms in recent years.

In 2013, France blocked an attempt by Yahoo to buy a majority stake in French video hosting site DailyMotion, and stopped Amazon from offering free deliveries in an effort to protect French book stores.

Last week, Google was forced to post a statement on its French website noting that it had been fined €150,000 by France's digital privacy watchdog for violating rules on ensuring data privacy.

That followed a report in French magazine Le Point saying that Paris will make a €1bn (£830m) tax claim against Google following a probe into the company’s tax strategies.

Yahoo has already announced it is transferring its French and EU-based operations to Ireland, seen as a move to limit its exposure to France’s high corporate tax rate, and there are fears more firms could follow.

It may take more than a hug to convince US tech giants that France is a country worth investing in.

Date created : 2014-02-13

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