Startup Hubs Around the World: Paris
The City of Love. The City of Lights. Paname. The birthplace of fashion. Paris has many identities, and is looking to add another one to its list of names: Top Ten Global Start-up Hub. Long known for its trendsetting fashions, its culinary delights and its artistic endeavors, Paris has much to offer its residents and visitors. Recently, however, officials in Paris began to express an active interest in leading the start-up tech market, and they are taking steps to ensure that they get their wish.
In this article, we’ll explore Paris’ 1) location, 2) tax incentives, 3) legal incentives, 4) investors, 5) local resources, 6) specialization of the city, and 7) startups to watch in the future.
The capital city of France, Paris is the most populated city in the country. Located in central northern France, Paris is one of the world’s premier tourist destinations and boasts a population of over 2.2 million people. The location of the city adds to the idea that Paris can be a powerhouse within the startup community and brings a set of benefits and advantages that other cities may not have.
Formally established in 1860, Paris has a rich history that can be seen in its architecture and thriving cultural activities. Living in the city of lights, residents can benefit from a community that is bustling with creativity and excitement. A solid infrastructure provides the necessary technology for the startups, and the city offers much in the way of living arrangements, transportation, as well as green spaces such as parks and gardens.
Advantages to choose the city
Residents and visitors to the city can take advantage of the wide range of transportation modes that are available. Two international airports serve the city, making it possible to find a flight in (or out) of Paris at virtually any time. It serves as the hub of France’s highway network, and has three major roads that surround the city – proving essential for automobile transportation. Additionally, the subway system (the Paris Metro) transports over 5 million people daily, making transportation within the city fast and easy.
There is much to appreciate about the city – the world-class cuisine, the trend-setting fashions and the vast opportunities to explore the arts of some of the world’s masters all combine to create an environment conducive to creativity and design. The same qualities and features that draw millions to the city annually as tourists are enticement for entrepreneurs who want to be in the middle of the action. Paris is city that hustles – the entrepreneur will fit right in.
One of the interesting facets to Paris’ push to become a global leader among startups is the discrepancy between their reputation and the words of the government. In 2013, France moved to raise capital gains on investors who cashed out of companies. Entrepreneurs protested, claiming that the move only served to reinforce the unfriendly business practices and high taxation rates that startups in France have to pay.
When given the choice of Paris, with its high taxes or another European city with lower taxes and greater governmental assistance, entrepreneurs predict that they’ll be heading for other European cities. French officials, however, claim that such remarks are really a result of ‘French bashing’ and that the country does offer tax cuts. A large lobby group cites high corporate taxes and labor market complexities among other reasons for the city’s inability to make it to the top of the list of startup hubs.
The truth is France does offer tax incentives for entrepreneurs. The incentives they offer, however, don’t begin to compare to the incentives that are offered by other countries. In an effort to revitalize the city’s appeal to entrepreneurs, French officials have taken the tax code and began tweaking the strict code to offer additional incentives. Unfortunately, this may be adding to the problem. One of the biggest criticisms about Paris as a startup is the continually changing tax codes which are difficult to understand. Recent legislation has indicated the possibility of new tax incentives for this up and coming startup hub city, a change that would be welcomed by all French entrepreneurs.
To attract the high caliber entrepreneurs that Paris needs to become the top start-up hub, tax incentives must be instituted that are consistent, fair, and attractive to start-ups.
How to be an Auto-Entrepreneur (Sole Proprietorship) in Paris
With the reputation that Paris has of being anti-business, it is interesting that they are a highly successful startup hub already. Paris has entered an important state of development and is working hard to convince people that the new method of doing business in Paris is here to stay. The legalities of starting a business in Paris are surprisingly easy to navigate.
Currently, any entrepreneur among the provinces (within the European Council countries) is eligible to start a business in any EU country. The process has been streamlined so it is typically only three days from filing to startup – and the paperwork can all be completed in one location, making it easy to accomplish.
For the entrepreneur who wishes to startup in Paris, the process is undergoing a restructuring, thanks to an aggressive plan outlined by the French minister. When his plan is fully implemented, Paris will be well on their way to accomplish its goal of becoming the largest tech startup in Europe – rivaling Silicon Valley, London’s Tech City and Berlin’s Silicon Allee.
His eight step plan includes establishing a tech sector within the city that is international in scope and is convenient to the cities amenities, offering real estate incentives for startups that move into the tech sector and upgrading the internet capabilities within the sector. Incubators and physical hub stations within the sector would be designed to provide startups with the necessary resources, along with a political brand to promote the tech hub and a government department specifically to support and develop the tech hub.
Additionally, an entrepreneur visa was introduced that will allow for residence permits to be processed quickly for individuals who offer expertise and experience in the tech industry. This will help to clear the way for foreign tech employees who need (or want) to move to Paris for their tech related job – they will be able to move quickly through the visa process and obtain the necessary paperwork.
Paris has a foundation of working with investors, but over the last few months, one investor in particular has taken an interest in Paris’ startup market and he’s prepared to put his money into the city to prove it.
Xavier Niel, a French billionaire, has plans to convert a railway station into one of the world’s largest incubators with room for over 1,000 entrepreneurs. The project, called 1000start-ups, is a joint project between Niel and the French government. With a building over 32,000 feet it will be equipped with computer lab stations, an auditorium, a boardroom and a workshop to build digital prototypes.
Along with the startup hub that Niel is helping to develop, Niel is also getting ready for the newest tech development center on the market that he co-founded with other investors. École 42, the project, is a 3 – 5 year training program for individuals between the ages of 18 to 30 year olds. A free school that teaches computer services, Niel helps place graduates in tech jobs around France.
Kima15 is Niel’s accelerator program that moves a startup through due diligence with the goal of expediting the application process. The two week-time period is a good introduction to the network of investors and entrepreneurs in the city already, and the startup is fast tracked for the opportunity to receive $150,000 in funds.
Additional investors are also present in Paris, although there seems to be a gap in the funding cycle. For the initial startup and venture capital stages, there is an abundance of investors available. The later stages, however, are lacking in investors.
A political move recently that indicated a change in capital gain taxes threatens to overturn the hard work being done by other initiatives trying to bring work to the capital. New investments in the city’s entrepreneurs have dropped, and efforts must be taken to replenish their supply and their faith in the city.
Paris has a wealth of successful startup neighbors: London, Berlin, Dublin, and they have successful startup hubs as well. If the major cities worked together to develop a strategy for how they interact with each other, there would be no stopping the effort. The resources for a successful startup hub are already located within the city of Paris, the city just needs to find out how to accelerate their use.
A rich artistic culture, Paris is famous for the number of art students who flock to the city to enjoy the museums and hone their craft. With the growing fields of tech industries, artistry is becoming more and more important. Paris holds an advantage with the large number of artists locally available.
Entrepreneurs are looking for quality, inexpensive living arrangements that can double as office space as needed, or can otherwise be used as a multipurpose living space. The large tech zones are filled with apartments, multi-purpose facilities and studios that are perfect for the budding entrepreneur.
Inspiration abounds within this fascinating city – and the entrepreneur who takes advantage of the culture may find that they not only enjoy their city but they are able to creatively solve problems.
Paris is funneling money into funds to support venture capital firms. Startup entrepreneurs can receive up to 70 percent of their salary for two years when they start a company.
Beyond the beauty of the city, there is beauty in a place that is not content to rest on the past – Paris has committed itself to move forward into the next century and refuses to let anything get in its way.
Paris has a vast sea of choices for entrepreneurs who wish to startup in the city to choose from. There is a strong fashion industry, high finance industry and other industries that all help to create the sense of being put in the middle of a hive of activity. Government officials, however, have their eye on the tech startup industry, and are taking steps to bring more technology minded individuals to the city.
By increasing the startup hub technology zone, the city will draw more people who are looking for a place to build new technology. Strengthening the internet capabilities would allow for additional entrepreneurs to do great things without worrying about if the connection can handle the graphics and other intricate programming the startups need.
With the government’s inclination to become the next Silicon Valley, Paris is sending a clear message – the Tech scene is happening in Paris. College campuses, hubs and other resources are all promoting the technology sector, which helps to attract additional entrepreneurs to the city.
One of the key issues that Paris will have in their quest for specialization is the tendency among French companies to be resistant to change. French companies hesitate to change the way things have always been done, and are slow to adopt new technology or other new ideas. This must change in the future if they want to specialize in a market that can change by the day. Another issue that Paris will have is the refusal to use English on any of their advertisements, etc. Trying to become a global powerhouse is almost impossible if none of the materials that Paris releases are in English. Simply translating the material that is made for a global market into English will go a long way in attracting entrepreneurs as well as investors.
STARTUPS TO WATCH
Pretty Simple Games – Criminal Case is the brainchild of the dynamic duo that runs Pretty Simple Games. With their debut game hitting the market in December, by June of the following year they had amassed over 9.4 million active workers around the world.
BlaBlaCar – The city of Paris is teeming with people on the roads, subways and highways. By developing a ride share program, the founder has over 17 million customers who all use the computer based program to find a ride, find a passenger or simply to check on traffic.
Withings – A mobile app, Withings offers you a series of health and wellness apps that can help you take better care of yourself – through internet. What you eat, how you exercise, it’s all handled through the interactive app.
Jolicloud – A new computing system, this one is entirely designed to help you keep your head (and your shoes) off the ground and into the cloud. Jolicloud has created a computing platform that maintains all its records and information secure in the cloud, making it accessible from anywhere.
Leetchi – Tired of trying to figure out the bill when a group of friends goes out to dinner? Leetchi is a group payment plan method that can make it simple to collect the money and pay in one lump sum. Social payment platform makes collecting money, and paying for everyone in the group a piece of cake.
Devialet – With singleminded focus, Devialet is producing high-end amplifiers. The analog/digital system improves the quality of the sound, and it seems to be working.
Melty – A social media platform, Melty is a free online community platform for teens. Twelve specialized channels are devoted to topics ranging from fashion to food.
Mindie – A video app that promises to be the next MTV for the mobile generation, Mindie is the second attempt to create a video app, and so far, Mindie is filming success – their funding is over 1.2 million and counting.
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