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France's Hollande woos foreign business with tax stability pledge

© AFP

Text by FRANCE 24

Latest update : 2014-02-17

President François Hollande appealed to foreign business leaders to invest in France on Monday, offering them simpler and more stable tax policies as his unpopular government tries to spur growth and create jobs.

Anxious to bring the French economy back to sustained growth and turn around his record-low poll numbers, Hollande met some 30 top executives at the Elysée Palace for talks on France's business climate.

The heads of leading companies, including Volvo, Bosch, Siemens, Samsung, General Electric, Intel and Nestle, were joined at the talks by chiefs of sovereign wealth funds from Gulf nations and China.

Hollande pledged to guarantee that taxes on an investment would not rise later – as has happened in the past – and VAT and duty rules for firms would be streamlined this year.

‘Ensuring stability’

The Socialist president, who last month announced France would phase out 30 billion euros in charges on companies by 2017 to reverse its slide in trade competitiveness, also said French business taxes would be harmonised with those of its neighbours, especially Germany, by 2020.

"The objective is to ensure the stability of tax standards and mechanisms," Hollande told the assembled business leaders.

"A business, whether French or foreign, that wants to invest will have a commitment from the administration that the tax rules will remain the same, and that will be a guarantee."

But scepticism runs high. A survey by pollster Opinionway showed that nine out of 10 chief executives of firms exhibiting strong growth did not believe the government could boost economic output or help their companies become more competitive.

Eighty-nine percent did not consider Hollande able to reduce public spending, showed the survey, which questioned the heads of 253 companies whose revenue grew more than 15 percent in the past three years, between Jan. 14 and 31.

Lagging behind Germany

The meeting comes after France suffered a 77-percent drop in foreign direct investment (FDI) last year, according to the United Nations Conference on Trade and Development, while neighbouring Germany saw its FDI quadruple.

It was also an attempt to reassure foreign business leaders unnerved by France's high overall tax rate and history of tense industrial relations.

Other measures announced on Monday at the end of the meeting included the merger France’s two international investment bodies – “Invest in France” and “UbiFrance" – in to one new agency.

Hollande also announced a “Talent Passport” for innovators and business creators, aimed at highly qualified graduates, investors and skilled workers whom Hollande said were “needed in France”.

Business representatives who regularly come to France would also be granted automatic five-year visas, Hollande said, while a new body will be created to help foreign start-ups in France, with cash grants of 25,000 euros.

(FRANCE 24 with Reuters, AFP)
 

Date created : 2014-02-17

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