Frédéric Douet

France just voted for a fiscal Iron Curtain. And if you have a startup in France, you’re probably already on the wrong side of it. On Friday, the French National Assembly passed an amendment extending the “exit tax” holding period from 2-5 years to 15 years. How it works: you move out of France, and the state calculates the gain on your shares as if you had sold them. Money you never received. That tax bill hangs over your head, and if you sell before the period ends, you pay. 2 to 5 years was already painful. 15 years is almost twice the median time it takes a European startup to get acquired or go public (about 8.5 years, per PitchBook). In other words, virtually every exit falls inside the window. There are two ways to get talent and capital as a country: 1/ You attract them because you offer something better: quality of life, safety, a fair social contract, a playground worth playing in. 2/ You keep the ones you already have and build walls so they can’t leave. The USSR tried option 2. It’s called ruling by coercion. It’s an unstable equilibrium, and it’s a loser’s strategy. Why is this happening now? In every human society, value creation follows a power law. A small minority pays most of the taxes. When the social contract breaks for that minority, they look at the map. The world is big and borders are thin. A state facing this has two possible responses. “Why are they leaving?” And it fixes the root cause. “How do we stop them from leaving?” And it fixes nothing. France picked option 2. When you’re installing padlocks, you’ve already lost. “This only affects the ultra-rich.” Wrong. Do the math: The rule applies as soon as you hold €800k in shares, or 50% of a company. Take two cofounders with about 45% each after their first round. A valuation of roughly €1.8M is enough for each of them to cross €800k. Pre-seed rounds today routinely price at €10-20M. At €10M, each cofounder holds about €4.5M in shares. And a solo founder who keeps more than 50% is in scope at any valuation. Your shares cost you basically nothing, so almost the entire valuation counts as gain. At roughly 30%, that’s over a million euros of tax on money that only exists in a spreadsheet. The targets aren’t heirs on yachts. They’re any founder who raised a pre-seed and might one day want to build somewhere else. This is only a first reading. The same vote passed last year and was dropped from the final law. That’s still a big problem. It means the idea comes back every year, and every year it passes. What this reveals is a country that has given up on winning and is squeezing whatever it can from the people still there until there is nothing left. Winning countries don’t build walls. They build the playground where the best people want to come play.