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THE ARDENNES’ ECONOMIC MAGAZINEFRANCE

ARDENNES : THE GOOD REASONSTHE ADVANTAGES - TAX FREE ZONE : HOW-TO-GUIDE

AREA CONCERNED - TO WHOM DOES IT APPLY - 200 000€ - THE DIFFERENT EXEMPTIONS

It’s the moment to invest in the Ardennes

SPECIAL

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NTAXEXEMPTION

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The plan to boost the employment area called « Tax Free Zone »was created by an amendment that I tabled during a cor-rective financial tax debate for the year 2006, and which wasvoted unanimously at the French National Assembly.It allows the reduction of taxes and social security contri-butions for all investments localized in one of the 362Ardennes’ municipalities concerned by this or for all jobscreated in the same region.

The objective is easy : boost the department’s economicfabric either by simplifying the development of existingcompanies, or by being more competitive than others,encouraging investment projects to be set up in the Ardennes.In all countries, companies are demanding a reduction intaxes and social security contributions.In the 362 Ardennes’ departments this has already been done.Welcome to all project bearers !!!!

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Jean-Luc WarsmannDeputy for the ArdennesPresident for the Law Commission at the National Assembly

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With this plan to boost the employment market area, Frenchand European company directors in the Ardennes, have anadvantage available which we hope, they will benefit from.These new measures, whose advantages will remain openfor several years, are not only intended for people who setup companies but also for those who have already invest-ed and who would like to continue their development.Therefore, take advantage of these grants.

The CCI of the Ardennes is doing all that is possible toguarantee the success of these measures and provide thenecessary technical support to project bearers.

There has never been a better moment to invest in theArdennes!

never been momentthe Ardennes

Géraud SpirePresident of the Chamber of Commerce

of the Ardennes

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In the north of France, the Ardennes Department has a unique geo-graphical situation, opening directly onto the entire North East Europeancontinent. Therefore, it is situated in the heart of a European Unionin full expansion and a direct market of some 250 million inhabitants.The department is served by waterways, air, railways (high speed trainservice - TGV East European) since June 2007, and motorway network(going towards the Benelux in the North, Paris to the West and Germanyto the East.).The Ardennes distinguishes itself, by a strong industrial tradition.- The department remains one of the most industrialized in Franceand employs 40% of the working population in this sector but at thesame time it has been able to take a different direction towards tech-nological innovation and quality, in order to widen production offersand meet customers’ requirements.It is also listed as one of the first exporting French departments thanksto the dynamism of all the companies that have contributed to main-taining a balance of trade surplus for more than 20 years.Moreover, the plan put into place by the public authorities and thestate - even the European community - participates in the region’sattractiveness.The « Tax Free Zone » plan by its exceptional character gives additionalstrength to all that companies and businessmen are looking for in theArdennes department.

We suggest that you discover it in the following pages.

Job distribution by sector of activity

Source : The CCI and CMA files 2007

Distribution of Small craft industriesSources : The Chamber of Trade of the Ardennes, 2007

14,1%21,2%

34,2%30,5%

Food

indu

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ervi

ces15,5% 16,2%

34,4%33,9%

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Distribution of the Ardennes population

Sources : INSEE

from 0 to 24 years

33,6% 30,4% 28,4% 27,3% 17,8% 23,6%

from 40 to 59 years 60 years old and +Ardennes : the good reasons

A wide range of Financial AidsIn a legal and statutory framework,Europe, the State, the RegionalCouncil, the Departmental Council and the municipalities offer a widerange of aids which companies canbenefit from, under certain conditions. There are particular financial aids for :- founding or taking over a company,- hiring and training,- safety and working conditions,- development and investment,- innovation and technology transfer,- developing international exchanges

for financing from the top to the bottom of the balance sheet,

- the protection of the environmentand sustainable development,- as well as sectional aids: (food processing industry, tourism).

For more information about financial aids, please contact the CCI of the Ardennes :Hubert Rosoy, Telephone : 00 333 24 56 62 68email : hrosoy@ardennes.cci.fr

A4

A4

A34

A34A34

A34

A34A34

E46

E411E2

5

E411

A4

A26

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AisneRethelRethel

LUXEMBOURG

Poix-TerronPoix-Terron Mouzon

Bazeilles-Douzy

Mouzon

SedanSedan

CharlevilleMézières

CharlevilleMézières

RevinRevin

GivetGivet

Bogny-sur-MeuseBogny-sur-Meuse

Canal des

Ardennes

Bazeilles-Douzy

VouziersVouziers

DoncheryDonchery

Reims

TGV East : 1h30*

TGV East : 45 min*

Paris

Metz

Nancy

Charleroi

Brussel South

BELGIUM

Brussel National

Luxembourg

RoissyCharles de Gaulle

Tournes-ClironTournes-Cliron

Châlons-en-ChampagneA26

Signy-L'Abbaye

The Ardennes (08) :a privileged geographicaland strategic situation

Boating

Airport

River port

High Speed trainTGV

Industrial parks

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* From Charleville Mézières

PARISREIMS

TROYESNANCY

METZ

STRASBOURG

FRANKFURT

KÖLNBRUSSEL

ANTWERPEN

AMSTERDAM

LILLE LIÉGE

CHARLEROI

SedanSedan

LUXEMBOURGLUXEMBOURG

A4

A27

A6

A5

A4

A4

A31

A3

A4

A34

A26

A26

LONDON

CharlevilleMézièresCharlevilleMézières

The Ardennes in Europe

Ascott’s (Ardennes Territorial Skills) :the integrator of the ArdennesIndustrial know-howCreated on the 12th October 2006 on theinitiative of a group of company directorsfrom the Ardennes, Ascott’s leads to themanufacturing of complete sets or subsets,encouraging collaborative engineering andallowing companies to land markets whichbefore were inaccessible.1 600 collaborators34 companies.

www.cci.sfia.fr : the internet site ofthe Ardennes’ industrial Know-HowThis catalogue, an interactive window of

the Ardennes Industrial know-how, lists not less than343 companies in allsectors of industrialactivity as varied as :timber, householdequipment, food-processing, auto-mobile, plastics orconnection.Ecobiz : a collaborative Platform

to generate businessThis collaborative platform put into placeby the CCI of the Ardennes allows all itsnational members to access rapidly to thedepartment’s economic news and to confi-dential information concerning their sec-tors of activity. Ecobiz also generates a volume of businessbetween them.

Industry: tradition, innovation, diversificationA department with a strong industrial tra-dition, the Ardennes from a very early stagewas recognized as the pioneer of techno-logical innovation and was able to bringits numerous qualities to the forefrontwhich makes this department a privilegedimplantation for national and internatio-nal investments.Numerous high security parts, either forthe launch rocket Ariane, the high speedtrain (TGV), Airbus, or automobile indus-try are made in the department.With a strong industrial know-how pas-sed on from generation to generation, theArdennes Department is a leader as far asindustrial employment is concerned.

An attractive operational land offer5 industrial parks with a logistical and indus-trial vocation situated near to the A34motorway offering improved land :

Rethel : 70 hectares 15 minutes fromReims (extension to 380 hectares).Bazeilles : 100 hectares (extension to280 hectares).Ardennes Emeraude in Tournes-Cliron :80 hectares alongside the west branch ofthe A34.Ardennes Azur à Donchery :80 ha alongside the east branch of the A34Givet : 52 hectares in the north of thedepartment. Village PME-PMI in Douzy :3 000 square metres situated to the eastof Sedan.Poix-Terron : 8 hectares to the south ofCharleville Mézières.

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The advantages

The CCI of the Ardennesrepresents a cooperative

fertile ground where all the forces involved

have for their objectives,progression and success.

On the other side of this page, are some of

the successful realizationsand other projects that are underway.

If you are company directors,project bearers, craftsmen,

shopkeepers, researchers or investors…

You are welcome to our department.

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« Ardenne Accueille » : an association which helps withthe newcomers’ installationThis association which was created in 1967by some young executives has for vocationthe welcoming and accompanying of newexecutives and their families that are set-ting up home in the department.

The services : Evolution and diversificationWith a high rate of employment, theArdennes’ service companies continue thedevelopment and diversification of theiractivities.The new perspectives concerning water-way transport (logistic plate form in Givet),rail transport (TGV) but also the motor-way contribute to stimulating this sector.

More than 200 kms of waterways for tourism. A boat hire base, and 6 river ports.

Castle of Sedan

The international puppet theatre festival attracts more than 145 000 spectators

over a ten day period

3 306 small craft industries This sector participates actively in the crea-tion of the Ardennes richness. Jobs in thefood trade, metalworking, textiles, wood,paper, building, joinery, excavation, trans-port… These craftsmen occupy all sectorsof the economy.

Tourism and Culture : a way of lifeThe Ardennes department has consider-ably improved its accessibility over the pastyears and has adapted its supply to an everincreasing waterway tourism with 210 kmof inland navigation.

The international Puppet theatre festivaland Arthur Rimbaud have given to theArdennes their letters patent of nobility.6 sports and recreation parks, 3 golf cours-es, an imposing architectural patrimony,and abundant nature make our depart-ment a place where it is good to live.

The department has been served by the TGV East European since June 2007.

Poles of competitiveness for a global influenceGenuine levers dedicated to support com-panies and research establishments, thepoles of competitiveness encourage thecooperation between international indus-trialists and our company directors andtherefore perpetuate the economic fabricof the Ardennes.

- The Pole « P2MI » (Deals with theimplementing of innovating materials)The vocation of this pole of competitive-ness leads to an opening into the researchand development of all materials : metal,plastic, wood or new materials.

- The pôle IAR (agro-resources industry)The pole IAR which joins together ThePicardie and the Champagne-Ardenne regionmobilizes researchers, universities and com-panies in order to develop agro-resources.

This pole which has a global vocationhelps companies to materialize theirresearch and development projects andto accompany them up to the industrialproduction stage.

The CRITT-MDTS : Ardennes industrial innovation forceThe CRITT is a research and expertiselaboratory specialized in the developmentof new products and surface processing,integrating basic metallic, ceramic andpolymer materials.Its teams, made up of doctors, engineers,and technicians, propose complete servicesto companies ranging from calculated studies to the implementation of innova-tion programs.

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Poix-TerronPoix-Terron

Mouzon

Bazeilles-Douzy

Mouzon

SedanSedan

Charleville-MézièresCharleville-Mézières

RevinRevin

GivetGivet

Bogny-sur-MeuseBogny-sur-Meuse

Bazeilles-Douzy

Signy-L'AbbayeSigny-L'Abbaye

VouziersVouziers

DoncheryDonchery

Tournes-ClironTournes-Cliron

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The tax exemption and social security contributions exemption plan that companies situatedon the territory of a municipality in the Boost Employment Area (BEA) of the Meuse Valleycan apply for, came into force on January 1st, 2007 and is valid until December 31st 2011.

How-to guide to investing in

In this area specific social and

fiscal benefits are provided inorder to assist

economic development.

The list of municipalities concerned can be consulted at

the Chamber of Commerce and Industry of the Ardennes at : www.ardennes.cci.fr

The area concerned

The areas concerned are mainly the district of Chaumont-Porcien, the subdivsions of Charleville –Mézières,Sedan and Vouziers ( with the exception of the district ofMachault, highlighted on the map).

The area concerned-1-

€ 200,000

To whom does it apply ?

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These measures do not apply to the leasing sector, nor to the rental of buildings for housing or farming .

Similarly, association activities cannot benefit from this system..

a tax-free employement zone

This plan was introduced for the benefit of companies setting up a businesson the territorial zone of the BEA (which implies premises, machines or materialsneeded for the company to operate, verifiable business operations in the zone), or for existing companies expanding into the territorial zone of a BEA.

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For existing companiesin the ArdennesExisting companies in the Ardennescan benefit from some of the measures of the BEA plan (exemption from business tax, property tax and social security contributions) within the framework of a businessdevelopment.In the case of new companies, (new business set-ups or new operations) these will also be able to benefit from the otherexemptions stated in the plan : corporation tax and fixed annualtax.

• The common law system - called « de minimis » - stipulates that public subsidies granted to eligible companiesunder the tax exemption plan of the Boost Employment Areaof the Meuse Valley are limited to € 200,000 over a 3-yearperiod.

• No minimum size of company is required in orderto benefit from these measures.

• However, there is a dispensatory systemfor projects situated in a Regional Assistance Zone on theBEA. In this case, the upper limit of subsidies is determinedaccording to the size of the company and relevant costs of theproject. Relevant costs are investments ( excluding goods financedthrough leasing) or salaries for jobs created over a 2 – yearperiod.Consequently, the subsidy limit is equal to X% of the rele-vant costs.(X being determined according to company size,35% for small companies, 25% for medium-sized companiesand 15% for big companies.)

• Company size is determined according to EU regulations :- small companies re companies that employ under 50employees and that have a turnover or total balance below€ 10M. At least 75% of their capital must be permanently -owned by one or more people, or companies that satisfy thesame conditions. ;

- medium-sized companies are those that employ under 250 employees and that have a turnover below € 50M or a total balance below € 43M. At least 75% of their capital must be permanently - owned byone or more people, or companies that satisfy the same conditions.

• However, if a company wants to opt for the full BEAplan, it must notify its Tax Authority and Social SecurityOffice within a 6-month period following the start ofbusiness in a BEA.

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The plan concerns every tax payer working in the industrial, commercialor small crafts sector as well as companies paying corporation taxand involved in the non - commercial sector (self-employed activities,responsibilities and functions where the person concerned is notofficially a tradesman, etc). The categories that may apply for this plan are :• Individual entrepreneurs that pay income tax in the category of industrial

or commercial profits ;• Companies or organisations under the partnership system ;• Companies or organisations subject to corporation tax by default

or by option.

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How-to guide to investing in -4- The different tax exemptions• INCOME TAX EXEMPTIONIndividual entrepreneurs that come under the “Industrial and Commercial Profits” category, can opt to benefit from a totalexemption of Income Tax over a period of 7 years following the launch of the business in a BEA. Specific cases, such as so-called mobile businesses or businesses carried out only partially in the BEA, can still be eligible for this measure under certain conditions.

This measure applies both to new companies and to new activities of existing companies.

• CORPORATION TAX EXEMPTIONCompanies that are subject to Corporation Tax by default or by option, and that are involved in a eligible sector, canopt in to benefit from a total exemption of CT over a period of 7 years following the start of the business activity in theBEA. Specific cases , such as so-called mobile businesses or businesses carried out only partially in the BEA, can still beeligible for this measure under certain conditions.

Only the profits generated in the businesses situated in the BEA are exempt.

This measure applies both to new companies and to new activities of existing companies.

Where the new business follows a company takeover, a business transfer, a business merger or a restructuration, the benefit of this exemption only applies for the remaining duration of the plan.

• FIXED ANNUAL TAX EXEMPTIONCompanies that are exempt from Corporate Tax are also exempt from Fixed Annual Tax, provided that all the businessactivity occurs in the BEA.

The FAT exemption applies for the same duration as that of the CT exemption.

This measure applies both to new companies and to new activities of existing companies, if all the businessactivity occurs in the BEA.

• BUSINESS RATE EXEMPTIONAll new companies or company developments set up from January 1st 2007 to December 31st 2011 will be exemptfrom business rates for a duration of 5 years.

For this measure to be valid, the Tax Authorities define this expansion as being a net increase in the business ratelevel compared to the previous year, multiplied by the consumer price index variation as observed by the Insee.

This measure applies both to new companies and to new activities of existing companies.

The exemption from business rates is a legal right, but a local council or district council operating its own tax systemcan cancel it for its own part.

To benefit from the business rate exemption, taxpayers have to apply for it to the relevant Tax Authority for each business concerned.

To sum up :Within the framework of a business start-up :

Within the framework of a business development :

Exemption : DurationIncome Tax and Corporate tax 7 years Fixed Annual Tax 7 years Business Rates 5 yearsProperty Tax 5 yearsSS Contributions 7 years

Exemption: DurationBusiness Rates 5 yearsProperty Tax 5 yearsSocial Security Contributions 7 years

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a tax-free employement zone• PROPERTY TAX EXEMPTIONCompanies that benefit from business rate exemption may also opt to benefit from property tax exemption on buildings situatedwithin the perimeter of the BEA on January 1st of the tax year, if those buildings belong to a company operating in one of the eligible business sectors between January 1st 2007 and December 31st 2011.

This exemption is valid for 5 years from January 1st of the year following the end of construction, or 5 years from January 1st

of the year which follows that of the building’s new purpose/activity.

This measure applies both to new companies and to new activities of existing companies.

The exemption from property tax is a legal right, but a local council or district council operating its own tax system can cancel it for its own part.*.

• SOCIAL SECURITY CONTRIBUTIONS EXEMPTIONThis concerns an exemption from employer contributions due, concerning social security insurance cover, family benefits,as well as transport payments and contributions to the National Housing Assistance Fund, for salaries paid within the limit of numbers of hours paid at the Minimum Wage Rate increased by 40%.

This exemption applies to new recruitments and new business activities in the BEA, as well as to company developmentsgiving entitlement to business rate exemption, for a duration of 7 years from the date of the business implantation,setup or development.

This measure applies both to new companies and to new activities of existing companies.

In order to benefit from this exemption within the framework of a business development, this development must be considered in the fiscal sense of the term. Namely, investments have to be carried out before the recruitments for whichthe social security contributions exemption is being requested.

*The list of municipalities where the benefit of this exemption is valid or cancelled is available at the CCI of the Ardennes. Our acknowledgements to Clément Brochon, chartered accountant, of the KPMG Corporate office, for his technical assistance in the preparation of this document.

A committed organisationThe main aim of the “Zone Franche Ardennesorganisation, created in October 2007 and coordi-nated by Sébastien Docq, is to enhance and pro-mote the BEA plan present in the Ardennesdepartment amongst the local population andneighbouring regions and abroad.

While not wishing to infringe on any entity, the « Zone Franche Ardennes » sorganisation offers itsservices in partnership with all local councils thatshare the same determination and dynamism topromote the assets of the Ardennes department.

Where to get help ?The CCI of the Ardennes is « the check-in point » in the Boost Employment Area plan.

For further details, please contact :, Hubert Rosoy, Telephone : 00 333 24 56 62 68 - email : hrosoy@ardennes.cci.fr Chamber of Commerce and Industry

of the Ardennes

www.ardennes.cci.frThe Chamber of Commerce and Industry of the Ardennes

is the check-in counter of the Boost Employment Area plan.

For further details, please contact:Hubert Rosoy,

Telephone : 00 333 24 56 62 68email : hrosoy@ardennes.cci.fr

“Ardenne économique”, spécial investisseurs,numéro spécial du magazine Ardenne Economique

édité par la CCI des Ardennes18 A, avenue Georges Corneau 08000 Charleville-Mézières.

Tél : 03 24 56 62 62 - Fax : 03 24 56 62 22.e-mail : ardenneeconomique@ardennes.cci.fr

Directeur de la Publication : Géraud SPIRE.Comité de rédaction : Géraud SPIRE - Jean-Claude CHEF - Jean-Pierre LEGROS

Jean-Claude SAVOY - Stella DMYTRYK - Emmanuelle LESIRE.Agence Conseil : Essentiel SDM - Tél : 03 26 04 04 07.

Direction Artistique : Michel COLOMBO.Impression : SOPAIC.

Tirage : 20 000 exemplaires en 3 languesDépôt légal : février 2008 - Publication membre de l’U.J.J.E.F.

Reproduction interdite sauf accord préalable.

Everything you need to know on “How-to-guide to investing in a tax-free employment zone”.

Everything you need to knowabout the Ardennes economy

and the portfolio of subsidiesthat you may claim.