I want to share my experience. France is doomed. Taxes and red tape are harder and harder every month. Just today, they have announced they want to raise a new tax on video games (wtf) and distribute the money to french video game large editor. (wtf) You can't do violent games or game that don't picture well the french culture. (wtf!) If you are an indie game developer in France, you are done.
Example of red tapes (someone asked):
- You can't fire anyone.
- To hire someone, you have to face a handful of fake applications. (People who don't want to get the job but are afraid of losing their allocations)
- You have to publish your statement of income every year. Even if you are full private LLC!
- You can't do online banking.
- You have to declare every websites you own to the gov.
- Some crazy BS about keeping access logs of your websites for an insane amount of time.
Example of taxes:
- To pay an employee 1,000 Euros, you are paying 2,000.
- They have a commission to monitor the evolution of work time and you have to pay them directly. Not even a scam.
- You have to huge pay a tax on your server SSDs for P2P piracy even if you have a business that nothing to do with that.
- VAT taxes are a painful process.
- You have to pay 30% of your total assets if you want to live abroad, even if it's only for a few years.
Sure, this project seems great but it's again gov. money (Caisse des Dépots) wasted and it will only profit to some BS/political companies, so scr0w them.
> today, they have announced they want to raise a new tax on video games
You are confusing government announcing a decision with two senators from opposition making a proposition (which will not even be subject to vote anytime soon). EDIT: just to clear things up, contrary to some countries, in France opposition parties have very little power to push anything.
Which leads to me suspect you might also be confusing other things, especially regarding:
- online banking - most banks expose most of their services online
- declaring websites you own - maybe you are talking about having to declare informations systems that collect and process identifying information (access logs excluded)
- access logs - six months is not "an insane amount of time"
Among the remaining, some is true, some I don't know.
Sure, That's just my experience, I may have some facts wrong.
> You are confusing government announcing a decision with two senators from opposition making a proposition (which will not even be subject to vote anytime soon).
In fact, this structure I've exposed already exists. The new tax will just double the budget they got. Regarding the new tax, I won't be surprised if it come in application in a form or another.
> online banking - most banks expose most of their services online
By online banking, I mean full online banking. You can't do that if you are a business.
> declaring websites you own - maybe you are talking about having to declare informations systems that collect and process identifying information (access logs excluded)
Even if it's a simple blog without comments, you have declared it to the C.N.I.L.
> access logs - six months is not "an insane amount of time"
From the LCEN law, it's 1 year including user data, password hashes, raw passwords (you can demonstrate that you don't have them) and session data. Sure, everything is doable but that's an hassle.
Sadly, as a French entrepreneur, I would love to contradict you.
But basically, you're right. It is much more difficult to create a startup in France rather than in the US for instance.
Thanks for linking to this, I hadn't seen it before. Excerpt:
Ironically, of all rich countries the US has lost the most civil liberties
recently. But I'm not too worried yet. I'm hoping once the present
administration is out, the natural openness of American culture will reassert
itself.
I would love to see pg revisit this topic, as this was written in 2006.
Why do you even try? It doesn't make any sense to me. Moving to the UK or Scandinavia would be trivially easy, and you'd instantly find yourself in a super business friendly environment compared to France. Is it the food?
Generally, yes. The quality of life in France is very high. If you are employed by a big company or the state, you can have a perfect life.
But from the day you create a company, you discover problems one by one. My first startup was French and I still love living in Paris. But I'm pretty sure, unless things change, that I'll move out as most of my friends did.
Regarding the taxes, deal with it.
full disclosure: I'm french and I like the healthcare system.
You can fire someone easily. You just have to provide a good reason for it. "Oh well, after all I shouldn't have hired him" or "This guys is not the best I could find, he doensn't give 120%" won't allow you to fire someone, no luck you're in France, labor code is sacred here.
VAT is not painful at all, even an accountant fresh out from school could handle this easily. Protip, hire an accountant. If you're a business, VAT is transparent for you. It only impacts french customers.
You don't have to declare every website to the government, you declare it to the CNIL which is an independent administrative body whose goal is to protect data privacy. I like them too.
Why setting up a business in France if you only see the drawbacks of being here?
Though I agree with you on the bullshit part. This incubator is a total waste of money.
"This guys is not the best I could find, he doensn't give 120%" is a perfectly good reason to fire someone. What other reason could there be? that he or she stole the coffee machine ?
What maz-dev does not tell is that even if an employee steals the coffee machine, you will have a very hard time firing him. I will cost you a lot upfront and the employee will most probably win in court so you will have to pay him even more.
This is by far France's biggest problem. I had the "privilege" to tell that to our president Hollande, and he just confirmed he does not even understand what's wrong with that.
If someone steals a coffee machine, first get a proof. Then you need to set up two meetings before firing the employee. Once this step is done, you send him or her a letter and he/she's officialy fired.
The employee can then request a reexamination in front of a court (prud'hommes). If you have any proof it will cost you 0€, you don't need a lawyer when going on prud'hommes and this will take you max 1 hour of your time. You can then ask some money to the employee to cover the damage caused and the time lost.
If you don't have any proof, then yep, you're fucked, and for a reason "presumption of innocence".
Cool for you to meet M. Hollande, but I'm afraid his role is not to vote laws or change the labor code, other instances less centralized are already dealing with this.
That could be a reason. You could also agree on clear goals with the employee and fire him if goals are not met. No problem. Just take the time to agree on clear, written, and official goals with him. You can fire him if you're in a difficult situation financialy speaking. But you have to prove this.
Not being an overachiever is by no mean a reason to be fired, not in France.
Things are changing slowly though, new types of contracts are being voted. They should bring "Flexibility". Give France a few years and you will be able to fire someone just because he's wearing a yellow shirt.
Given the mindset of french workers and unions, this new type of contract should actualy lower the overall productivity.
> Regarding the taxes, deal with it. full disclosure: I'm french and I like the healthcare system.
Sure.. How long will it last?
> VAT is not painful at all, even an accountant fresh out from school could handle this easily. Protip, hire an accountant. If you're a business, VAT is transparent for you. It only impacts french customers.
It's a myth. Companies pay VAT, you pay 19,60% of the value added by your company.
> You don't have to declare every website to the government, you declare it to the CNIL which is an independent administrative body whose goal is to protect data privacy. I like them too.
They haven't stop PRISM. Nothing is independent, the CNIL gets its money from state taxes, it's government.
> Why setting up a business in France if you only see the drawbacks of being here?
I am from france.
> Though I agree with you on the bullshit part. This incubator is a total waste of money
I've spent some time working with Parisian based companies. To add to the above...
- It is VERY expensive to fire people. Something like 2 years of salary?
- The taxes rates can be borderline extortion. People are happy paying them because they see value, but it hurts competitiveness.
- There's more of a feel of us (workers) versus them (management) as opposed to esprit de corps. You see this in employee attitude as well as the government's view of business.
This is all a shame, because outside of work, it's a fascinating country, with great food and culture. The academic system produces a lot of well trained engineers that are very good at Math. (This is why most financial software firms either have a French office, French roots, or lots of French engineers)
What's this mean? I hope the project succeeds, but I don't think it will. It sounds like Malaysia's multimedia corridor of many years back. Unfortunately you can't centrally plan innovation.
Any serious entrepreneur in France can double the company income or raided funds with the help of national and local R&D grants, funds and tax credits (Crédit Impot Recherche). Add to that two years of salary for the founders paid by the agency the help unemployed people. It's super easy to get ramen profitable in France, and you don't really need to get angel funding. This is huge and often undervalued.
If you start just out of college your don't get unemployment.
Tax Credits comes with a lot conditions that a lot of startup can't afford. For example, you have to hired university PHDs to do mainly abstract research, startups don't have this kind of money.
You don't need to hire PHD at all. Engineers are fine, and not even mandatory. You can do a lot of tasks on tax credits, even graphic design or testing.
From the CIR (The structure in charge of this tax credit), you can only do: applied science, pure research and experimental development. Sounds more PHD tasks than regular designer or regular engineer tasks.
Nope, it's totally ok. Tested for 4 years with a control from a government agent lately with 2 engineers and a 3D artist without any engineering degree. CIR is way broader than what people think, and it has been made even broader this year (you can now include tasks from pilot programs). This is really super undervalued, CIR and other grants is totally a game changer in assessing if France is a good country to start a tech business.
Totally agree, I've been leading our R&D program for 4 years. No PhD at all, a product owner, 4 engineers (some with an engineering degree, some without) and a UX designer. Design and testing are eligible as far as it is related to R&D operations. Some of the support costs, such as accounting, technology watch or hardware requirements, are eligible.
We also obtain the JEI status that allows huge tax discounts.
Absolutely. It's not a trick, it's an official system to help entrepreneurship. You need to have worked at least 2 years to have unemployment right though. So as hartator said, you don't get it straight after college.
Oddly enough, even though France has this terrible reputation for red tape, the French themselves are quite well represented (possibly even over-represented) in the UK venture capital scene, at least in the area of biotech.
People reading the parent comment should be aware that labor laws are vastly different in Europe - even within the EU - so if you're from outside Europe, don't be scared to start a company in Europe just because of how things might be in France.
While I applaud any efforts toward entrepreneurship, I can't help but think that these "megaproject" efforts kind of miss the point.
By their very nature, startups tend to originate from grungy, grassroots hackerspaces, undergrad dorms, shared apartments, graduate common rooms, and so forth. Places where weird and innovative ideas get cross pollinated.
I mean, yeah, "let a thousand flowers bloom", and all. But if France continues to be a place where 75% taxes are seen as a sane idea and bureaucracy holds sway over innovation ... well, good luck.
There are many things to fix in France to encourage start-ups, indeed. And containing bureaucracy will be harder than tax issues IMO.
However, what's very important in this endeavor this that it's 90% financed by Xavier Niel, a single private entrepreneur who's specialized in blowing up bureaucratic / oligopolistic businesses. He's pioneered minitel services (including sexual content, which got him some flak), then commoditized high-speed ADSL (we've had tens of Mbps for €30 for nearly a decade), more recently cellular phone (no contract, no subsidized phone, unlimited calls, 3GBytes of data for €20), has started messing with education (http://www.42.fr), and now incubation.
I'd have been _very_ skeptical of this without Niel's control over it. With him, I tend to be hopeful.
same here. i was skeptical of Niel as well, but with 42 he really showed that he was honest with his intention to change the country's mentality.
i also saw an interview of fleur pellerin the other day and she seems like a "hands in the dirt" person. that's a real change from previous ministers in her position.
that's really the first time i'm optimistic about a state sponsored big project.
What is that 42.fr website like? I mean there are tones of useful resource online for wannabe developer. So I don't really get what this one has to be so special. Is it because it is all in French?
Don't get me wrong, I think it would be great for France and Europe to have a Silicon Valley-equivalent. So I don't mean to disparage. I've just heard some horror stories about the red tape that startups face in some parts of Europe. Glad to hear there are positive signs.
Well, I suppose one way to look at it is that, bearing in mind that taxes and bureaucracy are intensely difficult to change in the right direction in France, they should try and make things easier for start-ups in other ways. Subsidised office space, and easier collaboration are both good ideas, and are all the more necessary given France's problems in other areas. It should be noted that France turns out some really good engineers (my opinion, as an Australian in France), and it's just dumb not to benefit more from that.
The government has made some good changes in the red tape department too. For example, you can now kick off a one-person start-up by using the status of "entrepreneur" to start with, allowing you to start making money whilst holding down a steady job - once you've stabilized income at ramen profitability, you can then go and fight the red tape to become a proper business. Obviously this is not a model that works for all start-ups, but at least some are going to be able to get off the ground using this ramp.
The university in my local area is trying to do the same thing: they spend all of their time writing funding proposals for a new 3500m2, three-storey, $20m shiny glass incubator building in an area where the startup ecosystem is maybe 2 years old, and has zero angel/VC or mentor networks.
The people behind the project are all academics and have never launched a startup in their lives. They can't even fill a trial "incubator" (that is nothing more than a coworking space) they started two years ago that has a legal maximum of 25 people due to stairwell access. At any given time, there are maybe 6-8 people in there.
Meanwhile the entire startup community is like "WTF mate"!
That reminds me of when we tried to get some kind of help from a UK University in the mid 1990s - all they could do was offer a lease on a rather large building.
Of course, we said "no thanks" and went off and squatted in a couple of dingy rooms at a friendly company until we (after a couple of years) got VC money and got our own office space.
If you look at the Valley as an example, it's a bit of both. The grungy garages are the most romanticized element, but there was quite a bit of large-scale institutional support. Stanford Industrial Park and the cluster around NASA's Moffett Field served as two anchors that were something like incubators, though focused on somewhat larger, more capital-intensive, engineering-oriented companies than what today's startup incubators tend to focus on.
Let me be the classical Frenchy (i.e. never happy) here and point out that as long as the tax code, red tape and overall overwhelming paperwork entrepreneurs in France have to deal with won't be reduced or greatly simplified, having big incubators will be a nice touch but the road to growth will still be paved with unnecessary hurdles.
The task at hand is HUGE, one that not so many developed countries have to deal with, that is allowing SME/SMI and entrepreneurs to grow without hassle while still preserving the quality of public service we've grown accustomed to (which has a cost that everyone contributes to or is supposed to contribute to).
I hope we find a good middle ground there, cause the startup culture in France is still a decade behind compared to that of the US or Canada speaking for examples I've experienced first-hand.
EDIT: Still an awesome prospect though, kudos to all the people involved.
In this startup incubator there will be a counter with administrative people to help us with all this paperwork. So less pain with all this formalities, we will just have to pay more as we are in France.
By the way, one more time, thanks Xavier Niel, he's the only one in France who invests so much money on things like this and taking so many initiatives to make things change.
He gave us the cheapest contract for mobile phone in the world, he offered us the 42 school (free school for computer sciences with an innovative learning method), he offers us the most efficient dedicated servers for a decent price (http://www.online.net/fr/serveur-dedie/comparatif-serveur-de...), and so much more.
Let me clarify something first: I am not an entrepreneur myself. I don't deal with said paperwork, the people I currently work for or have worked for in the past do. I've had the same feedback from a lot of them, in small and bigger companies.
Basically the complaints are always the same: it's not necessarily the amount of paperwork, it's the fact that when interfacing with the various agencies (regarding legal, financial, bank-related, employment or health issues) you usually have to provide the same documents OVER and OVER (and interfacing with people who are not always accountable to someone given the number of layers in the French administration, creating a system where some people have a job for life, don't understand that the "state" is all of us and don't give their all).
It sometimes feels that it never ends and doesn't make sense. Since the system in France is very centralized and since all the different agencies ALL depend from the state, this should be centralized to a given location and then dispatched to the agencies upon request.
The bigger problem anyway (if you call that a problem) is that your social contract in France is that of a mutual network of citizens taking care of each other through taxation. This is great when it comes to a lot of topics (health, education, social services), but it naturally has a cost when you're competing against the likes of the USA who have made a clear choice that the private sector tends to come first. I've yet to think of a good way to have my lunch and eat it but this more often than not puts our SME/SMI in a difficult spot.
Oh yes, I remember during first year in France. Every time I visited back home, I'd go to my local bureaucrats to get a few more birth certificates. It seemed that every single desk in France needs one, obviously no more than 3 months old (as if my birth data changed so often). And that was even without trying to start any business...
Here is one. You start a small startup and you have to pay all your social charges for the fiscal year in advance. Say you project you'll make $200000€ the first year and need to pay 80000€ (just an example) before you can retain your first client. That is a huge chunk of change a lot of people don't have.
And if your company doesn't reach it's target and collapses too bad, at least you have health care paid up.
All of it...The issue in France is politicians that create harsh constraints for entrepreneurs then architect "usines à gaz" for there friends to pretend they are helping entrepreneurs.
This might be a good time to point out the differences between startup incubators that work and those that work politically.
Political organizations do things to create political impact. In their terms, a successful startup incubator would have a big building, be designed by a great architect, have funding for hundreds of teams at a time, get funding in memorable ways, and have lots of press-worthy events. In short, whatever it takes to look good on television. Political organizations do things for political reasons.
From what little we know, actually effective incubators emphasize failure, exist in a culture of mutual support, are part of a larger technically-inclined ecosystem, nurture small teams, and exist as a really low-key, ongoing creative chaos of conversations and contacts. In short, little and somewhat trivial non-press worthy things that accumulate when added together. This is why things like difficulty to start a business, or hire/fire employees, get mentioned so often. It's not that any one thing is a deal-killer, it's that a few dozen pains in the ass will destroy all the myriad low level contributors you need for a good startup ecosystem to work. It all adds up.
My goal here isn't to criticize the effort, simply to point out the difference between things that are newsworthy and things that might actually make a difference. I wish these Paris guys the best of luck in the world. Here's hoping they can work through whatever obstacles they find.
I prefer down-top approaches like YCombinator than top-down, central planning effort.
Ycombinator grew organically, as an experiment. This sounds to me like yet another bureaucratic effort to replicate Silicon Valley.
Politicians always think big, they don't want to fix holes in the roads, they want to make new super highways so everybody could see how great they are.
As European and entrepreneur I avoid France for any of my business work. Every French person enjoys life, wants to work the less they could and they feel entitled for everything. More than half the people there work for the government and are more worried about their rights than what they could do.
They could care less about competing with the world, they are living by increasing their debt, and believe that this is going to last forever, that probably Germany will support their lifestyle.
Don't get me wrong, I love France, speak French fluently, have lots of friends there.
What a nonsense. Your facts don't even pass the smell test: around 25 % of people in age of working work as a public servant.
As for the working less than possible and the comment regarding Germany: French workers work more than German on average, thought that's likely skewed because 'forced' part time is more prevalent in Germany (http://stats.oecd.org/Index.aspx?DatasetCode=ANHRS). The whole idea of # hours as a meaningful metric is not a good one anyway: some of the countries from OECD that work the most ? Mexico, Turkey, Greece, etc...
> Every French person enjoys life, wants to work the less they could and they feel entitled for everything. More than half the people there work for the government and are more worried about their rights than what they could do.
I dont think so ,french people are not lazy at all , and it's common for employees in a private business to do extra hours FOR FREE !!! yes for free. And we dont take 3 hour breaks for lunch, we eat at the office. Whatever you heard about french public service is not true in any private business in France, people work very hard.
So there is 30.000m² of space, but it seems that most of it can't be used for actual work. It'd have been more beneficial if they used the money to build a building and have subsided apartments for start-ups. I think at a starting stage, I'm more in need for work space than an auditorium or another restaurant.
But this doesn't solve the problem for France. I'm (geographically) quite close to France but will incorporate my next start-up in Hong Kong. No Visa, much easier paper work, and easier to get a bank account; and also cheaper.
I agree, the building is beautiful, but it seems that there are no private office, so you are required to pick up all your stuff everyday, you can't have a good chair, or work on something other that a laptop. What do you do of your inevitable paper work, taxes, etc... We have a whole cabinet of these here for a 10 people shop. It's all fashion.
Interesting, but I'm always a bit skeptical about projects that seem so architecture-ey. I like architecture, but it usually can't create communities or industries. It's like when cities decide to build artist quarters. It works when there are already artists n the area.
The website & press release are all about the building. Who are these startups 1000 startups & why are they going to choose to be there over other places?
As an incubator, it will be judged on its results. One thing to note is that there's a lack of available and affordable space in Paris. I live in the middle-class suburbs, closer to the rural areas than to the center of Paris, and will probably set my company (if it happens) here than in the tiny overpriced offices of the city.
At least the government is using this huge building for small businesses and not another museum or mall.
1. Low cost of living.
2. Low house pricing/rent. (As rent-seeking forces people into being wage-slaves.)
3. Low regulation and bureaucracy.
4. Low taxes.
5. Educated, creative, and risk-taking workforce.
6. Ease of finance.
I see so many countries trying to compete in the startup ecosystem by just trying to cargo-cult their way into it with a bit of investment and a brand. Far too many are not fit for purpose because there is too much power held by rent-seekers. It cannot be fixed by simply applying duct-tape to the problem.
Does anybody know a country which fits this specification?
What about the perfect location for startup employees? New York has an astronomically high cost of living, but it's not like people are somehow tricked into paying it. It also has world-class transportation, social scene, arts, etc. etc.
If you want a "low cost of living", you're going to pay the price for it in another way. Your "educated, creative" workforce might not be all that inclined to stay.
That sounds correct, though there definitely has to be a location which is somewhere in between the two polar opposites. I find it hard to believe that Silicon Valley was always as expensive as it is now...
In the early days, leading up to the founding of Intel, one of Silicon Valley's main features was that it was dirt cheap. In fact it was dirt; it was farmland. This made it a reasonable base to set up chip manufacturing, which needed lots of workers at minimum cost.
Why do taxes matter for a start-up? They're usually not making much money anyway.
If you want a low cost of living, and low rent, you could always live in Mexico. Good luck with #5 and #6 though.
When you have #5 and #6, usually you have an in-demand area, which leads to #1, #2, #3 and #4 being much higher than they would otherwise be. Supply and demand rears its ugly head again.
Most places that have a low cost of living and low taxes are also high on crime, bureaucracy, and corruption, and have poor infrastructure (roads, Internet access, etc.). It sounds cool to open your business in a country with low costs - right until the local mafia pays you a visit and demands 50% of your income. And you'll need a thousand permits for doing anything business-related, and everyone involved in granting you those permits will need some money under the table.
In my personal experience, the UK ticks all these boxes, at least outside Greater London. Good state schooling and the NHS go a long way towards lowering the cost of living.
Really interesting, but a building != an incubator. Access to capital/investors is key and its unclear from the article if this is something they've got a plan to address.
I had this dream a few years ago, that it would fun to move somewhere other than the US, and start a business. I thought it was fun to experience a new culture, and maybe provide something useful. One of places I looked was France, because its the only other language i speak. The immigration laws seemed overwhelmingly difficult for someone like myself (I have a great engineering job in the US, but no degree).
In the end, I got married and bought a house. A different dream I suppose.
Ha! I bet Free employees (Free is Xavier Niel's main business) are a bit ticked off - Free is renowned for being cheap with regards to it's employees...
You know just enough about Latin countries and their laws to be mislead. There are some puzzling rules and laws indeed, but there's this cultural notion that it's OK to flout inconvenient laws, rather than fighting them frontally to repel them. Among others, the laws intended to protect the French language from English (or more accurately Globish) are widely perceived as not-really-meant-to-be-enforced.
I know it's stupid, but that's the way it is, and it sort-of works. And before going all French-bashing about this, go and check the anti-sodomy laws that still exist in some bible-belt US states...
I want to share my experience. France is doomed. Taxes and red tape are harder and harder every month. Just today, they have announced they want to raise a new tax on video games (wtf) and distribute the money to french video game large editor. (wtf) You can't do violent games or game that don't picture well the french culture. (wtf!) If you are an indie game developer in France, you are done.
Example of red tapes (someone asked):
- You can't fire anyone. - To hire someone, you have to face a handful of fake applications. (People who don't want to get the job but are afraid of losing their allocations) - You have to publish your statement of income every year. Even if you are full private LLC! - You can't do online banking. - You have to declare every websites you own to the gov. - Some crazy BS about keeping access logs of your websites for an insane amount of time.
Example of taxes:
- To pay an employee 1,000 Euros, you are paying 2,000. - They have a commission to monitor the evolution of work time and you have to pay them directly. Not even a scam. - You have to huge pay a tax on your server SSDs for P2P piracy even if you have a business that nothing to do with that. - VAT taxes are a painful process. - You have to pay 30% of your total assets if you want to live abroad, even if it's only for a few years.
Sure, this project seems great but it's again gov. money (Caisse des Dépots) wasted and it will only profit to some BS/political companies, so scr0w them.