Macron Vowed to Make France a ‘Startup Nation.’ Is It Getting There?

The false dilemma of Silicon Valley being the only possible model to "create the future" sounds like a classic pompous Valley view, maybe the US can afford part of a state to be like that, I don't know if I want that for France. And this is coming from someone who made a startup in France, and is currently working in the industry.

So, proof of the pudding and all - how much are you paying a senior engineer? To make it easier to compare, take an hypothetical software engineer with a cs degree and 10 years of experience in mainstream technologies?

- Companies are exploitative of their workforce and should be strongly regulated to protect workers;

- Excess company profits are a sign of unfairness and abuse, and maximum profits should be controlled to protect against such unfairness;

- The role of an organisation is to provide employment;

- Unemployment can be reduced by making it more difficult to fire employees or make their positions redundant;

- France's international uncompetitiveness, especially vis a vis Germany, could be solved by making other countries similarly uncompetitive by imposing similar burdens.

My partner is French and a Human Resources consultant to medium and large organisations. The horror stories she recounts would make most entrepreneurs run a mile.

My business is online and I can locate it anywhere. I've chosen Ireland for a variety of reasons. Eurozone, English speaking with good multilingual talent availability, good international transport and relatively light touch regulation. Tax rate wasn't a significant factor because the effective rate of tax (after factoring in state subventions) is relatively similar between the two countries.

France is a great place to live but a terrible place to run a business or to hold capital assets. The high taxes pay for a very good public health system and a good transport system. Unfortunately, they also pay for a huge amount of public sector waste.

France for startups works well if you're well connected, in which case you're made. Connections are, however, largely forged early in life, in Lycees and Grand Ecoles, so connections and networks are much more difficult for an outsider to penetrate.

As an example of French business mentality, my friend's business (online/social) has few actual users and no paying users and is 100% supported by a mix of grants and supports from a myriad of government organisations, and by large corporations who are obligated by government to set aside an annual budget for supporting such endeavours. My friend's business is considered a success in France. I consider it a personal success for him, insofar as he has navigated the system quite well. But it's not my definition of business success.

As for the budget share, a significant part of that is going to be govt-owned corporations that are used as cash-cows, for example the energy production / distribution monopolies, national lottery, Tallinn Port etc. Last month's news - this year they contributed 157MEUR dividends: https://www.aripaev.ee/uudised/2018/04/19/riik-votab-ettevot...

In the end, "regular" companies end up paying less than you imagine. I think it could be a sign that the policy is working - companies are investing into the future and "paying it forward". Or they are doing creative feats like taking out profits as loans to parent companies, which is also known to happen, specifically the big Scandinavian banks here.

Specifically for startups, it is going to make a big difference if you do not need to pay yearly corporate tax at an arbitrary date (in relation to your business) and can a) postpone this until profitability or b) never pay a dime if your idea never pans out. You can even steer your company towards an exit without ever having to think about it.

Many people I know personally only distribute as much profit as they need for themselves. It is not double taxed with personal income tax, so it is spending money already after paying the corporate tax. This has lead to a debate as to whether this actually constitutes "entrepreneur salary" with entrepreneurs therefore paying less taxes than employees (the salary taxes are much higher: http://palk.crew.ee).

That is why for a startup you can "essentially" forego thinking about it. When you do, you know you have made it :)