Hollande bids to woo foreign investors back to France

PARIS (AFP) ― President Francois Hollande sought to woo sceptical investors back to France on Monday, telling global business chiefs his government had no fear of foreign capital.

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 Elysee 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.

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

“We are not afraid of capital that comes to invest in France, we do not want to protect ourselves,” Hollande said after the meeting.

He said a key goal was to “increase investments from emerging countries,” who account for only about 10 percent of capital inflows to France.

Hollande said he would hold a meeting every six months to discuss reforms and announced a series of first efforts ― including reduced waiting times for investors seeking visas and measures to attract start-ups and young foreign graduates.

Emerging from the talks, the head of leading Indian industrial group and carmaker Mahindra, Anand Mahindra, said he was now “hopeful” about the French business climate.

“We have not invested in France, we have invested in Germany, in Spain and Italy, because we have been concerned whether this is a business friendly regime,” he told reporters.

“But after today I think you will see the Mahindra group seriously examining investments in France.”

Hollande, a Socialist who once publicly declared his dislike for the rich, has stepped up efforts in recent months to shed his anti-business reputation.

In a major policy speech in January, he vowed to cut taxes and spending, saying France had no hope of “retaining its influence” without a strong economy.

He also last week touted the “dynamism” of French entrepreneurs during a visit to a new French Tech Hub in San Francisco.

Hollande has seen his approval ratings plunge to the lowest level of any modern French leader as the economy stagnates and unemployment has hit a 15-year high.

France’s economy limped by on 0.3 percent growth last year ― hardly a strong plug for the Socialists as they head into important local elections next month and a European Parliament vote in May.

Business chiefs have repeatedly cited Hollande’s tax plans as a deterrent to investment, in particular a temporary 75 percent tax on high earners and a corporate tax rate that is expected to hit a Europe-wide high of 38 percent this year.

In an open letter in business newspaper Les Echos in December, some 50 heads of subsidiaries of foreign companies in France, including Coca-Cola, GE and HP, said it was “more and more difficult to convince” their head offices to invest in France.

A spokesman for the centrist opposition UDI party, Philippe Vigier, said Hollande’s promises were far from enough.

“Much more will be needed than a show and some nice words to create the conditions for lasting confidence,” he said.

Some 20,000 foreign companies operate in France, employing about two million people.

Under the measures announced on Monday, France will grant five-year visas, obtainable within 48 hours, to investors who travel frequently to France.

It will also provide four-year residency permits ― dubbed “talent passports” by Hollande ― to recent university graduates and highly qualified workers looking to move to France.

Start-ups seeking to set up in France will be eligible for up to 25,000 euros in aid, he said, and rules on the application of the value-added tax to imports and exports will be simplified.

Two government agencies promoting investment in France and French investment abroad will be merged to better coordinate global efforts to lure in capital.