Billionaire French Executives are Leaving Paris to Escape High Socialist Taxes

 @MalikFromLA
on March 12 2013 12:29 PM
Bernard Arnault
LVMH Moet Hennessy Louis Vuitton chairman and CEO Bernard Arnault attends a news conference after the official inauguration of the Hublot manufacture in Nyon November 5, 2009. REUTERS/Valentin Flauraud

A number of top French executives plan to move their companies away from Paris. Two senior executives at Paris-based Moët Hennessy are moving to London and the head of Dassault Systèmes said some senior managers of his company already left and he was considering following suit.

Bernard Arnault, Europe's richest man and head of the champagne and cognac arm of Moët Hennessy Louis Vuitton SA (LVMH), who himself applied for Belgian citizenship, told the Financial Times that taxes are not the reason for the moves by LVMH executives Gilles Hennessy and Christophe Navarre.

Arnault seeks dual nationality for business reasons and contends that under French President François Hollande's socialist government, France has fostered a serious anti-entrepreneurial climate.

"Residing in France has become a big handicap," Bernard Charlès, chief executive of the software arm of Dassault Aviation, Dassault Systèmes, and a loud critic of Hollande's high tax policies, told Le Monde newspaper. "Very largely, our hiring of top managers will have to be done elsewhere than in France."

This news comes to Hollande as he battles a slow economy and slumping approval ratings. France's latest economic numbers indicate a 1.2 percent fall in industrial production in January from December figures. The government aims to curb spending; meanwhile, unemployment remains high at 10 percent of the workforce.

The government is looking to industry to help relaunch the economy and denies that there is a tax exodus underway. Charlès, however, told the Financial Times that he'd been encouraged to move by his chairman and that some of Dassault's other executives had already left. Other members of LVMH's executive board were moving to Singapore and Switzerland, according to the Financial Times.

Although the executive committee and Moët Hennessy's headquarters will remain in Paris, LVMH said there was no question they'd be shifting their corporate base.

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