The prospect of Brexit creates a climate of uncertainty and insecurity for many international businesses based in the UK. Many of them are considering the option of relocating somewhere else in Europe. Lille, a city in northern France, just over the other side of the English Channel appears to be a good location for UK businesses to set up, not only for its strategic geographic position but also for its quality of life.
In this interview, Jean-Baptiste Toursel, CEO of Lille’s Agency, a French government funded business development agency, gives advice to UK-based businesses who are considering a post-Brexit relocation and explains why Lille would be a good option for them.
Expat Assure: A lot of international businesses based in the UK are now considering to relocate elsewhere in light of Brexit. What advice would you give them for a successful relocation? What criteria should they take into account?
Jean-Baptiste Toursel: In this time of great uncertainty and insecurity, companies should focus on what matters most to them, i.e. business! Keeping business at the forefront will reassure them and their stakeholders: shareholders, clients, partners, employees.
But in order to keep business in focus, I believe that companies will have to audit a few components of their activities, and most importantly:
- Employees, who and where do they come from? Where to find them tomorrow after Brexit?
- Supply chain: Businesses should map and audit their suppliers and logistics partners, in order to ensure the continuity of their activity.
- Customs infrastructure. 4.25M trucks cross the Channel each year, companies need to anticipate customs formalities to avoid congestion at the border.
Then, when thinking of a new location to expand their activity, companies and their management team should consider:
- Business-minded cities that offer network and business opportunities.
- Pool of talent. Talent is key to today’s organisations, and companies should have a close look at cities which offer education, innovation, specific talent available in numbers for their specific operations.
- Cost-effective locations. The idea here is not to look for the cheapest options (low tax, low cost of work, low cost of premises, low cost of incorporation), but rather focus on finding a location that will enable your company to get the best balance between cost, fluid operations, and long-term ability to fulfil the company’s vision. Managers too often focus on short-term ROI when opening a new operation abroad. Mid and long-term issues should also be tackled. In 3 or 4 years, will that location still be giving my company new options to expand? Will that location enable me to add new building blocks to my business?
- Local support. Local government teams which will take care of all aspects that enable the companies’ core activity : premises, administration processes, recruitment, funding, legal, compliance…
- Finally, companies should also look for great places to situate themselves. Lille offers a vibrant cultural scene, affordable housing, nature, sports and great connectivity to enjoy city breaks not only in Brussels, Paris, London of course, but also Rotterdam, Bruges, the Ardennes, the Opale Coast and Le Touquet-Paris-Plage.
EA: How can Lille’s Agency help these businesses and what can Lille’s Agency offer them?
J-B T.: Lille’s agency always keeps an eye on what’s ahead. Our economic development agency operates in a 3 steps process:
- Help the company understand the market (macro level) and understand its new ecosystem (micro level). We assess our client’s goals and objectives and design a project plan that will comply with them. Usually, our role at that stage is to reassure businesses on the ability of both Lille Metropolitan Area and Lille’s agency and its partners to help tackle the following issues:
- Presence of competitors, i.e. companies of the same sector, having the same value chain,
- Meetings with experts (legal, technical),
- Talent pool: available workforce for their project,
- Cost structure (tax, labour, real estate, utilities, incentives…)
- Legal: what will their presence look like? Direct presence? Joint-venture? Acquisition?
- Once the company has defined its plan and schedule, Lille’s agency and its partners will be there to deliver:
- Site selection and all administrative compliance,
- Financial engineering,
- Personalised welcome and integration solutions for new employees,
- Publicity and opening events.
- Finally, once the company’s site is operational, Lille’s agency will integrate its director/manager to L’ABC, Lille’s agency business club. The club’s mission is to anchor foreign business executives in their new community in the most durable way. Too often, newcomers who open a new site/facility face the sense of isolation: they need support from peers to tackle their daily challenges and make their new operation a success.
EA: What makes Lille a good city for these businesses?
J-B T.: Lille offers of course all the amenities an international city offers, but one thing no other city in Europe has: its strategic position, 35 min from Brussels, an hour from Paris and an hour and 20 min from London or even 45 minutes from beaches!
The area around Lille has a deep European spirit and, being located at the border of Belgium, Lille business ecosystem understands cross-border trade. The Lille region is also the leading French region for foreign investment outside Paris, and 85% of them would recommend their peers to set up their new operation in this area.
Rents are between 1.5 and 4 times less expensive than Brussels, Paris and London, Lille is an interesting and comfortable city to live in. According to the cost of life website numbeo.com, you would need 3,240.48€ per month to live in Lille and have the same level of life than you have in Paris for 4,300.00€. Regarding the quality of life, the offer of a great cultural life in Lille is an important point to consider when you’re moving in: 20 museums, 6 being classified as historical monuments (LaM, The Palais des Beaux-Arts museum which is the France’s second largest art collection after the Louvre, La Piscine.), Lille Opera and Lille National Orchestra for classical music lovers.
Pop, electro and rock music scenes are not to complain either! The Zenith and the Pierre Mauroy stadium host big musical events like festivals and international performers while we can find smaller artists in more intimate places like l’Aeronef or Le Grand Mix.
Regarding sports, Lille organises more than 150 sports events every year and welcomes international sports like the Davis Cup finals in 2018 or the Euro Football cup in 2016.
You can find lots of clubs and associations for every sport at every age. At Lille, we count 200 clubs for 60 sports disciplines. 100,000 practicing, 20,000 licences, and 5,000 volunteers.
Lille Metropolitan has many green spaces within which you can exercise, and makes every effort to promote green practices and a healthy environment. To do so, it provides incentives, and does not hesitate to show ambition such as an application to the 2021 European green capital and lots of urban projects aiming to create more green spaces, parks and gardens for inhabitants.
To go through the metropolis, you can take the tramway, subway or bus as many times as you want for 56€/month. Your “going out” budget won’t be too affected: with 35€ you can eat with your friends in a good restaurant, and pay between 3 and 5€ to have some good local beers in one the many bars of the city!
EA: What about the cost (including all charges) of personnel, offices, taxes and social charges? Is it interesting in Lille for UK businesses?
J-B T.: The Lille Metropolis is less expensive than most of the other French Metropolis for operating costs & premises. Operating costs are averaging 13% lower than our European competitors for all types of business meanwhile payroll is lower than in main competing regions in France. Ranked among the top 3 most attractive regions for business premises costs, prime office space up to 50% less expensive on average compared with our French and European competitors. In 2018, 280,157m² have been placed (sold or rented) in Lille!
On average, Lille is 10% less expensive than its European competitors (Londres, Brussels, Munich, Barcelona…) for operational costs. When you add to this the salaries which are 6% lower than other European cities, and 15% lower than other French regions (20% than Paris), you understand Lille is of course a good location for your business!
Additionally, foreign companies are not often familiar with: the “Fillon reduction” is reduced employer social security contributions for salaries up to 1.6 times the statutory national minimum wage (SMIC).
EA: Are there some industries/types of businesses that would benefit more from being in Lille than elsewhere?
J-B T.: The Lille Metropolis is THE place to be for doing business in retail! Lille is Europe’s Retail Valley where retail giants like La Redoute, Decathlon, Leroy Merlin, Castorama or Auchan were born.
Today with 44,000 jobs and 65€ billion of turnover, the whole value chain is represented in Lille which makes it the strategic point of entry in Continental Europe for every retail buùsiness.
A lot of British and International retailers have operations in the area, should they be returns-logistics-fulfilment centres (Asos, Made.com, Amazon, Decathlon, Vestiaire Collective), HQs and Marketing (JD Sports, Kingfisher-Castorama), Customer Care (Booking.com, AirBnB).
Pioneer for the 3rd and the 4th industrial revolution in France, the Lille Metropolis has also been able, between heritage and modernity, to highlight this historically industrial region) , for a transition from yesterday’s industries to those of tomorrow. With at least 2 competitive clusters dedicated to services industry, the Lille Metropolis is one of the most important French tech flagship cities, which makes it an ideal location for businesses in services industry.
Euratechnologies is definitively the most flourishing tech hub in France, is home to companies in all the major industries of the future: transportation, energy, banking, insurance, big data, cybersecurity, AgTech, digital e-commerce, etc. With over 80,000 m² dedicated to digital industries, “Euratech” provides solutions to start-ups, SMEs and corporates.
Great names such as Cap Gemini, IBM, Tata Communications and rising stars such as Critizr, Sencrop or Pumpkin have located themselves in Lille.
Lille is also a great place for shared services and outsourcing. Lille has all that it takes to open a shared services centre: accessibility, talent pool in core competencies (IT, HR, Procurement, Legal, Customer Care), reasonable cost of labour and premises.
To give you 2 examples of successes in Lille:
- Booking.com arrived in Lille in 2011 with the ambition to open a customer care centre of 250 agents, mostly dedicated to French speaking customers. In 2019, they are now 530 people and plan a strong increase to arrive at 850 by 2020. This shared service centre concentrates 27 spoken languages and 42 different nationalities, 100% of them speaking English.
- IBM opened in 2014 a client innovation centre in Euratechnologies. 600 IT talents now work in this centre which operates not only for the French market, but for overseas clients. Taking advantage of this great pool, IBM decided to locate its French SOC (Security Operations Centre) here in 2018.
EA: The “gilets jaunes” action has made the headlines in UK news. The reputation of France seems to be affected for businesses wanting to relocate. France, at the moment, does not appear to some people as a land of political and social stability. Can you comment?
J-B T.: According to an Ernst & Young study from June 2018, France remains a privileged and attractive destination to settle its business. “It is considered as a country whose attractiveness is going to increase the most in Europe over the next three years, according to 55% of the foreign business leaders questioned by the consultancy firm, ahead of Germany (45%) and the United Kingdom (30%).” Says the report.
Thanks to those results, Paris passed over London to become the most attractive European city for foreign investments.
The first summit “Choose France” held by President Macron helped raise 3.5 billion investment for France. And as foreign companies represent 2 million jobs in France, and almost 20% of French R&D, the country seems to remain a safe place for businesses.
In that broader landscape, Lille and its region has become in 2017 France’s second region for Foreign Direct Investment, with France’s largest market share for industrial projects (20% of total new jobs in France in 2017).
Reasons for this? 85% of foreign investors in the Region would advise another company to set up a subsidiary here, and over 70% of them view the Lille region labour force as productive and engaged.
No country has stability for granted (Brexit in Britain, Shutdown in the USA, Crisis in Venezuela…). Thus “old” economies like France and Lille offer long term stability.
EA: Most British businessmen do not speak French: is it easy to find bilingual executives and staff in Lille?
J-B T.: With more than 100 000 students and many of them being international, the bilingual talents potential is high. Moreover, with the increasing presence of international companies, Lille has France’s highest rate of exporting companies combined with our great connectivity, can assure you that you will find bilingual employees.
Let me go back to the example of Booking.com and its 530 employees. This Shared Service Centre concentrates 27 spoken languages and 42 different nationalities, 100% of them speaking English.
EA: How easy is it to find English speaking main contacts in law (establishing the company and employment law regulating the company & staff), Tax, Accountancy, office brokers (best advice to find an office)…?
J-B T.: We have a 30 years’ experience of networking: it allows us to connect our clients to preferred contacts. And of course, English speaking contacts in technical and legal procedures are easy to find in Lille, and we would be pleased to introduce them.
EA: How easy is it in Lille to find qualified personnel?
J-B T.: As I said previously, this is how we have worked for 30 years now. According to the company’s needs, we browse our network and interact with our partners to fit the project requirements. Speaking about HR, we work with public and private partners to find the best candidates: we operate targeted publicity operations with them, schools and universities, temp agencies or larger recruitment firms to make sure we fulfil your needs. We helped IBM Global services to develop its activities within the Lille area. This project created more than 600 new jobs.
EA: In conclusion, would you say that Brexit, rather than being an issue, can be seen as an opportunity for these businesses for great development and great partnerships in a city like Lille?
J-B T.: Yes, Brexit must be seen as an opportunity for both parties. For this purpose, in 2017 we signed a City-2-City agreement with London&Partners (our sister organisation in London) to strengthen trade and investment links. Thanks to this relationship we are able to establish a business welcome program to help entrepreneurs to understand where to settle and develop their activity in several markets.
We are also member of the IMRG, UK’s industry association for online retail, and the Franco-British Chamber of Commerce and Industry. One of our priorities is to keep close and strong ties with our neighbour countries. Collaboration and partnership are what we believe in.
Lille and the Hauts-de-France Region work actively on every possible scenario in relation to Brexit working with Air and Borders Police, the French Customs and their UK partners to maintain the fluidity for freight and tourists. This work concerns everybody, and is a priority to protect English and French businesses.
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