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France to woo foreigners with ‘entrepreneur visas’

France's president moved to woo entrepreneurs and small business owners on Monday by announcing a raft of proposals to win back their confidence. Among the new measures will be an "entrepreneurs visa" for foreign investors.

France to woo foreigners with 'entrepreneur visas'
Hollande spots something in the sky outside the Elysée Palace. Photo: Bertrand Langlois/AFP

French President Francois Hollande on Monday announced a series of measures aimed at winning back the confidence of small business owners needed to kickstart the country's struggling economy.

Speaking to a group of 300 entrepreneurs in Paris, Hollande also laid out proposals to attract foreign investment into a country threatened with recession and suffering from dogged unemployment, and to help French firms expand abroad.

The most-awaited reform concerned the capital gains tax on sales of company stakes or entire firms, which the government had wanted to hike as part of plans to reduce the public deficit, before backtracking last year amid a revolt by entrepreneurs.

Hollande said Monday that business owners would still have to pay the tax but would be able to get up to 85 percent exemptions if they had owned or held a stake for at least eight years, or smaller rebates for shorter periods.

He also announced a new "entrepreneur visa" to be created for foreigners seeking to set up an innovative start-up in France if they invest a "sufficient amount" of money.

The French leader also said that he would like to set up services in some parts of the world – beginning with the United States and Asia – to help small and medium-sized enterprises (SMEs) export their good and services abroad.

Tax advantages could be granted to large companies that invested in smaller start-ups that sought to expand abroad.

Fleur Pellerin, junior minister for SMEs, told BFMTV that the package of measures reflected "the way in which we perceive the role that entrepreneurs must play in our society for the success of our country."

Among other measures, Hollande said the French Public Investment Bank – set up last year to help innovative SMEs – would create a new financing tool
for setting up firms in underprivileged areas.

The measures were broadly welcomed by business owners.

Jean-Francois Roubaud, head of the CGPME, an employers's organisation that represents SMEs, said the measures were "completely acceptable and there will be unanimous satisfaction."

The package of measures are to be integrated into a draft 2014 budget unveiled in September by the government, with the aim of coming into force in January 2014.

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VISAS

What is the EU’s ‘single permit’ for third-country nationals and can I get one?

In 2020, 2.7 million non-EU citizens were issued a so-called "single permit" to both reside and work in the EU. But what is the single permit, how does it work and what could change in the future?

What is the EU's 'single permit' for third-country nationals and can I get one?

Among the recent proposals made by the European Commission to simplify the procedures for the entry and residence of non-EU nationals in the European Union, there is the reform of the ‘single permit’.

In 2020, 2.7 million non-EU citizens were issued a ‘single permit’ to both reside and work in the EU, according to the European statistics agency Eurostat. Five countries together issued 75% of the total, with France topping the list (940,000 permits issued), followed by Italy (345,000), Germany (302,000), Spain (275,000) and Portugal (170,000).

Seven in 10 single permits were granted for family and employment reasons (34 and 36 percent respectively) and just less than 10 percent for education purposes.

But what is this permit and how does it work?

What is the EU single permit?

The EU single permit is an administrative act that grants non-EU citizens both a work and residence permit for an EU member state with a single application.

It was designed to simplify access for people moving to the EU for work. It also aims to ensure that permit holders are treated equally to the citizens of the country where they live when it comes to working conditions, education and training, recognition of qualifications, freedom of association, tax benefits, access to goods and services, including housing and advice services.

Equal conditions also concern social security, including the portability of pension benefits. This means that non-EU citizens or their survivors who reside in a non-EU country and derive rights from single permit holders are entitled to receive pensions for old age, invalidity and death in the same way as EU citizens.

The single permit directive applies in 25 of the 27 EU countries, as Ireland and Denmark have opted out of all EU laws affecting ‘third country nationals’.

Who can apply for a single permit?

The directive covers non-EU nationals who apply to reside in an EU country for work or who are already resident in the EU for other purposes but have the right to access the labour market (for instance, students or family members of a citizen of the country of application).

As a general rule, these rules do not apply to long-term residents or non-EU family members of EU citizens who exercise the free movement rights or have free movement rights in the EU under separate laws, as their rights are already covered by separate laws.

It also does not apply to posted workers, seasonal workers, intra-corporate transferees, beneficiaries of temporary protection, refugees, self-employed workers and seafarers or people working on board of EU ships, as they are not considered part of the labour market of the EU country where they are based.

Each country can determine whether the application should be made by the non-EU national or the employer or either of them.

Applications from the individual are required for the Czech Republic, Estonia, Finland, Germany, Hungary, Luxembourg, Malta, Poland, Romania, Slovakia, Sweden. For Bulgaria and Italy it is the employer who has to apply, while applications are accepted from either the recipient or the employer for Austria, Croatia, Cyprus, France, Lithuania, the Netherlands, Portugal, Slovenia and Spain.

How long does it take to process the application?

The EU directive says the competent authority must decide on the application within 4 months from the date it was lodged. Only in exceptional circumstances the deadline can be longer.

Where no decision is taken within the time limit, national law determines the outcome. In some EU countries (including France, Italy and Spain) this is a tacit rejection while in others it is a tacit approval.

If the application is incomplete, the authority should notify the applicant in writing specifying which additional information is needed, and the time count should be suspended until these are received.

In case of rejection, the authority must provide the reasons and there is a possibility to appeal.

How does it work in practice?

Although the intention of the directive was to simplify the procedure and guarantee more rights, things always get complicated when it’s 25 countries turning rules into reality.

A 2019 report of the European Commission on how this law was working in practice showed that the directive “failed to address some of the issues it proposed to solve”.

The Commission had received several complaints and launched legal action against some member states.

Complaints concerned in particular excessive processing times by the relevant authorities, too high fees, problems with the recognition of qualifications and the lack of equal treatment in several areas, especially social security.

Only 13 countries allowed the transfer of pensions to non-EU countries. In France, invalidity and death pensions are not exportable to non-EU states. Problems were identified also in Bulgaria, the Netherlands and Slovenia.

In Italy single permit holders were excluded from certain types of family benefits and it was the EU Court of Justice that ruled, in September 2021, that single permit holders are entitled to a childbirth and maternity allowances as provided by Italian laws. The EU Court also rules that Italy and the Netherlands were charging too high fees.

Sweden restricts social security benefits for people living in the country for less than one year and takes too long to process single permit applications, according to the report.

Generally the report found that authorities were not providing sufficient information to the pubic about the permit and associated rights.

What will change?

As part of a package of measures to make working and moving in the EU country easier for non-EU nationals announced at the end of April, the European Commission has proposed some changes to improve the situation.

The Commission has suggested shortening the deadline for member states to issue a decision ensuring that the 4 month limit covers the issuing of visas and the labour market test (to prove there are no suitable candidates in the local market).

Under the proposal, fees should be proportionate and candidates should be able to submit the application both in the member state of destination and from a third country.

In addition, permit holders should be able to change employer during the permit’s validity, and the permit should not be withdrawn in case of unemployment for at least 3 months. These measures should reduce vulnerability to labour exploitation, the Commission says.

The Commission also suggests member states should introduce penalties against employers who do no respect equality principles especially with regard to working conditions, freedom of association and affiliation and access to social security benefits.

These proposals have to be approved by the European Parliament and Council and can be modified before becoming law.

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