Europlace meeting participants
8 July 2016

Appeal: "There's never been a better time to come to France!"

On 6 July 2016 Manuel Valls attended the International Financial Forum organised by Paris EUROPLACE, which is in charge of promoting and developing the Paris financial marketplace. Through his keynote speech, the Prime Minister recalled the latter's many advantages and the lengths to which the Government is going to boost wealth creation and innovation in France.
Content published under the Government Valls III from 2016 11th February to 2016 06th December
 
"We have come to talk to you about France. About this beautiful country, about this great economic power," Manuel Valls told the Paris EUROPLACE Forum attendees. He reminded them of what the Government has been doing these past few years to help companies to grow so that they can hire, invest and capture new market shares.

"Our attendance today is also marked by a very particular context: the British people's decision to leave the European Union," he recalled. "This decision (…) has sent shock waves across the European community at large as well as, in a very specific way, among many companies located in the UK". New challenges have now emerged for these companies, and they are wondering what the consequences will be on their business. "Today, we are offering solutions to companies looking for answers to their questions so that they can anticipate and plan for the future."
 
France needs to become more attractive in this new environment. "Its appeal is already plain for all to see – its assets, infrastructure and the reforms we are undertaking – and is set to grow even stronger in the future," Manuel Valls explained. That said, this is not a case of France becoming a tax haven: rather, that it attracts new business, new companies and new talent.

This appeal would enable France to pursue growth. "To create new jobs and to boost purchasing power. And therefore to fuel our economy and shore up our social model." "Companies create wealth which is then redistributed; we therefore need thriving, competitive businesses," he said.
 

Paris: an attractive financial marketplace

"As stakeholders in the European and international financial system, you all know that the Paris marketplace is sound and innovative," Manuel Valls pointed out.
 
First and foremost, it lies at the heart of Europe and the Eurozone. "Our goal is to strengthen this integration even further. France is fully in favour of building a more ambitious Capital Markets Union," he recalled, so as to guarantee a more stable financial system that is better protected when economic markets take a hit. Europe also needs to be able to keep a tight rein on its financial regulations, stock markets and clearing houses.
 
"What also makes the Paris marketplace robust is its focus on the real economy," Manuel Valls continued. "It is a financial marketplace committed to financing businesses in France. We are home to major industrial corporations that are among the world's foremost issuers of securities". The companies' short-term securities market amounts to €310 billion, and has recently been made more easily accessible with foreign issuers in mind.
 
Savings are also substantial in terms of volume and our asset management stakeholders are world-class multinationals. "French funds were the first to qualify under the new framework concerning European Long-Term Investment Funds, which provide infrastructure and companies with long-term financing," the Prime Minister explained.

"The Paris marketplace is also innovative." "We want to build the financial marketplace of the future; turn Paris into the capital of Smart finance". For that we need to create the right conditions for attracting entrepreneurs willing to take risks.

What's more, the Paris marketplace is thriving. The EuroPP, (European private placement), was created in Paris. In 2015, this provided European companies with more than €12 billion in funding. The Paris marketplace is also at the forefront of crowdfunding activity in continental Europe.

"We were the first in Europe to offer rules that inspired confidence for funds run by insurance companies and asset managers to lend directly to businesses," Manual Valls reminded attendees. The requisite legal and security conditions for making online decentralised financial transactions were also established, for the first time in Europe, in France. Last but not least, Paris is also where the AMF (the financial markets regulator) and the ACPR (which is responsible for supervising the banking and insurance sectors in France) have made strong commitments in favour of financial startups.

"On a final note, Paris is well on the way to becoming the leading marketplace with respect to green finance and sustainable finance," the Prime Minister announced, since the first Climate Finance Day was held in Paris last year. Regarding action to tackle climate change, the financial sector is now fully rallying to the cause.
 

A capital region boasting a whole host of advantages

The City of Paris and Île-de-France Region form the number one digital hub in Europe, with over 40 startup incubators. Not only that – as of next year the world's largest startup campus will be hosted right here, in Halle Freyssinet. "Silicon Valley will no longer have the upper hand on us ... on that front at any rate!"
 
"And we are ready to welcome a great many more companies yet," Manuel Valls announced, drawing attention to the fact that the region now offers more available office space than anywhere else in Europe. This supply is organised around seamlessly inter-connected hubs thanks to the central business district in Paris, the redevelopment of Europe's largest business district, La Défense, and the development of the Saint-Denis, Saint-Ouen or Boulogne hubs. 900,000 square metres of extra office space are due to be delivered from this year – the equivalent of 60,000 work stations.
 
Also note that work on the Grand Paris Express has just got underway. This will ultimately result in a further 200 kilometres of metro lines and 50 new stations in Paris, which will provide more efficient connections between each other, the airports and high-speed train stations. €35 billion in State funding has been committed alongside the Region. Fresh progress was also made, on 6 July during the Council of Ministers' meeting, as regards the planned direct rail link with the airports, the Charles de Gaulle Express, which should be up and running by 2023. Finally, the State and local authorities are working together to build 10 international hubs to underpin the housing and office space supply.
 

France is busy reforming for the better: a look at the new measures in place

"Last but not least, France's appeal can be found in a more favourable economic environment. For that, we have undertaken an unprecedented series of reforms," the Prime Minister pointed out. The Responsibility and Solidarity Pact schemes have cut labour costs by €40 billion.
 
In 2013, the Government kick-started a "simplification shock" to reduce the burden of red tape on workers and innovators. "We have come a long way. But there is still much to be done to get rid of unnecessary regulations and to unlock business potential everywhere this is possible," he recalled.
 
Investment is also being supported through the Public Investment Bank (the BPI), the extension of the special tax mechanism bearing on additional depreciation, the guaranteed continuation of the Research Tax Credit (CIR) and the expansion of the Investments for the Future programme.

"Last week the President announced that these successful schemes – additional depreciation, Competitiveness and Employment Tax Credit (CICE), and the SME Hiring bonus – would be bolstered or extended". "And we are modernising our labour market from top to bottom. The labour law is a major reform. When it is adopted it will give our businesses more visibility and flexibility, enabling them to be more responsive. We're confident that the local level is where trustworthy business relations can be nurtured, for entrepreneurs and employees alike".
"This policy is clearly working," Manuel Valls highlighted as he recalled that France's economic growth did better than forecast in 2015. The French National Institute of Statistics and Economic Studies (Insee) predicts 1.6% growth in France in 2016. With companies' profit margins back to their pre-2008 crisis levels, they are now able to up their investments and recruitments. Incidentally, 200,000 jobs have been created in the private sector over the last twelve months.
 

France is growing more attractive

"The French economy is appealing. The President shares my intention to make it even more so; so that foreign talent, and any French talent who would like to return to France, is given a better welcome," Manuel Valls said. A one-stop administrative point should therefore be set up for all foreign companies seeking a foothold in France from September.
 
This service will be coordinated by Business France, working together with the City of Paris, Ile-de-France Region and Grand Paris Metropolitan Authority, and will offer a comprehensive welcome package for businesses and their employees alike. It will help with enquiries about real estate, residency permits and children's schooling. The Government also intends to open as many "international classes as necessary in schools so that all children have the chance to learn in their native language".
 
The one-stop shop will allow businesses and individuals alike to clarify which tax mechanisms apply to them, by being able to communicate in their own language. Because, "let's face it: simple is not a word that would be used to describe our tax system," the Prime Minister admitted. The Tax For Business service should improve things in this respect, by promptly providing customised answers. "This is absolutely necessary if we are to offer more visibility and security to anyone looking to settle or resettle in France".
 
"France is making unprecedented efforts to encourage business competitiveness. And we are prepared to go further still," Manuel Valls explained, citing the achievements France already has to show in this respect concerning the corporate tax cut, with the scrapping of the special corporate tax contribution as well as the reduction in the normal corporate tax rate which will gradually be brought down to 28%.
 
"We also want our regime for “impatriates” (third-party nationals posted to France for business purposes) to become the most favourable in Europe," he explained. This regime will now be applicable for the first eight years, up from five currently, and the “impatriation” bonus will be exempt from income tax. "This is a sign of confidence on France's part to anyone eager to come and work, innovate or create jobs in France. Come and help to extend our country’s influence".
 
We all need to club together in enhancing France's prosperity and profile. The office creation tax has already been modernised and capped. We also need to start looking into the possibility of additional temporary local tax exemptions as regards companies and offices.
 
"We are working hard to make the French tax system easier to understand and bring it closer in line with our European neighbours," the Prime Minister reassured. "For what we are ultimately aiming to achieve is a common tax system for companies within the eurozone". 
 
"France has so much to offer: its infrastructure, its qualified workforce, its brain power, its engineers, its health service model, its social protection and its quality of life," Manuel Valls reminded attendees. “It is a country of innovation, with the most startups in Europe".
 
"Because France is a great country, and because it fully intends to remain so, anyone keen to create, innovate and produce wealth will always be welcome here. In a word, there's never been a better time to come to France!" he concluded.


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