PARIS • Emmanuel Macron (picture)’s pre-Davos summit for tech executives will hold some goodies for start-ups.
In the third edition of his “Choose France” summit yesterday, timed to catch global CEOs in Paris on their way to the Swiss Alps’ World Economic Forum, the French president will detail measures in his 2020 budget that have improved stock options for start-ups in France.
Macron will also plug a revamped visa regime that will give fast-track papers to tech workers for French or foreign companies and a new benchmark index, the French Tech 120, to promote the nation’s most promising ventures.
Snap’s Evan Spiegel, who was given French nationality in 2018, European Union digital commissioner Thierry Breton, Netflix Inc’s Reed Hastings, Google LLC’s YouTube CEO Susan Wojcicki, Lime’s Joe Kraus and other leaders from Mexico, Nigeria, Sweden, Turkey and the UK will attend the forum in Versailles.
Entrepreneurs and executives at some of Europe’s most successful technology start-ups have been urging local governments to change laws to make employee stock options more attractive, in order to better compete with Silicon Valley. Macron, his Prime Minister Edouard Philippe, Digital Minister Cedric O and 17 ministers will present the government’s latest measures.
In November 2018, about 30 CEOs of companies including iZettle AB, Funding Circle Ltd, Supercell Oy, TransferWise Ltd, Blablacar and US-based Stripe Inc, signed an open letter saying a patchwork of different rules in various European countries makes it complicated and costly for employers to dole out stock options.
The French 2020 budget law, voted late last year and enacted on Jan 1, has two major measures already to make stock options of start-ups more attractive. First the conditions of the so-called BSPCE, an employee shareholding tool equivalent to a stock options, have been sweetened: They will get a discount compared to the price investors paid at the last fund raising.
Also, employees of foreign start-ups with a base in France will be able to get stock options calculated on the parent company’s performance, not just the French branch, O unveiled in a statement late last year, as he said France seeks to attract more tech workers and companies.
“What France has done is fantastic, but we really need a pan-European solution,” Martin Mignot, Partner at Index Ventures, which has stakes in BlablaCar, told Bloomberg.
“Currently, start-ups face the same problems every time they expand into a new country. Talk to any entrepreneur and they tell you it’s madness, it is slowing them down and it is putting them at a disadvantage to large companies.”
Macron has attempted to lure more investors to France ever since his years as an economy minister in 2014, via taxes, visas, benchmark indexes, bilingual schools and the French way to welcome new comers.
In September he created the “Next 40,” a listing of France’s top 40 start-ups with the strongest growth potential. While only a few of them are currently “unicorns”, with values topping US$1 billion (RM4.1 billion), the government said it expect more of them to scale.
One of the key measures taken by Macron was a 30% flat tax on capital revenues from securities, savings, capital gains, and other sources. That measure got him into trouble with some of his citizens protesting against inequalities in the Yellow Vests movement that started in December 2018.
The statistic institute Insee said the increase in inequality in 2018 was linked to a sharp rise in investment incomes, which benefitted from the introduction of a flat tax the same year.
Still, Macron has also toughened his stance on issues like taxes and privacy. He brought it up with Apple Inc CEO Tim Cook in his first months as president and repeatedly to Facebook Inc founder Mark Zuckerberg. Macron is currently in a tug of war with US President Donald Trump over his tax on digital giants.
Amazon.com Inc, like other tech companies, will make their first payment of France’s new tax on digital giants in a few weeks. The government enacted a 3% levy on large tech groups that is retro-actively effective from Jan 1, 2019. — Bloomberg