Albin Serviant, CEO EasyRoomMate & co-founder FrenchConnect London
London versus Paris, which is better?
You may have heard about something called Brexit … well, nothing has really changed in London since June 23rd: the sun shines on a relatively regular basis and London is still appealing for not only start-ups but also scale-ups. Loads of politicians came & visited us in London over Summer to tell us welcome back in France! Well, France has done well for start-up recently but come on… there is still a long way to go. There is definitely technical & regulatory challenges for Fintech start-up historically based in London and willing to operate across Europe, however for the vast majority of French Entrepreneurs based in London, coming back is not yet an option. Should they have to relocate their business, Barcelona by far leads for now, followed by Berlin.
Here is a brilliant and self-explanatory chart about compared key indicators between France & the UK (Source Club Outre Manche — May 2016)
Key reasons why London is still appealing for French start-up:
- Vibrant eco-system with pro-active support of the UK government with programs such as TechCity, Future50, ScaleUP, …
- Fast access to qualified international talents to scale abroad,
- Vast array of tax rebate schemes for Business Angels (See chart below)
- Corporate tax: 20% & employer contribution: 15%
- Flexible labor law
- Sole trader status (kind of Auto-Entrepreneur scheme): 5-minutes online registration, no revenue capping, possibility to hire employees, …)
- Start-up friendly administration
- France creates loads of start-up which is good but better financed , the British start-ups have a survival rate after two years of activity by almost 95 % whereas their French competitors are at 75%
- Very strong FrenchTech community http://london.lafrenchtech.com lead by … me :)
Having said that, bear in mind:
- Cost of living is very high especially for housing costs,
- Loads of talents but high turnover,
- Salary taxes are higher than in France,
- Competition to raise money is fiercer,
- … Weather & food suck (not that true though).
-… France is doing loads of progress for start-ups with the strong support of French Minister Axelle Lemaire. Among other initiatives, the long expected Compte Entrepreneur — Investisseur (close to SEIS & EIS schemes described above) may materialise by end of the year; depending on the magnitude of the effort, that may be quite instrumental in improving start-up financing in France
What about Brexit? Well, this will be a long process … UK needs Europe and Europe needs UK. So let’s see what happens within the next 3 to 5 years. In the meantime, the government will be pragmatic: there are on going discussions to lower the corporate tax from 20% to 15%. Will London become a start-up heaven?
Food for thoughts…