Economic opportunity zones (ZFU) aim to boost development of the economy and employment in certain key areas. Companies benefit from exemptions in derogation of common law. Exemptions from employer contributions are granted for a maximum of five years at 100%, then at a tapering rate over three years for companies with over five employees, and nine years for companies with less than five employees. This is not cumulative with other assistance. Residents in the ZFU must represent at least 20% of hirings for companies set up before 2002, and 33% for the others.

Created in 1996, Economic opportunity zones (ZFU) are key areas in municipal policy, defined by the following criteria: high unemployment rate, a significant young population, few graduates, low tax potential per inhabitant. In 2004, the number of ZFU grew from 44 to 85, o/w 79 were in mainland France. Ile-de-France and Provence-Alpes-Côte d’Azur are the main regions affected. The measure is mainly aimed at construction companies, but commerce and private services are also gaining ground.A third of new jobs are residents.

The objective of the ZFU is to curb: - middle class flight and the lack of social housing, in particular in “high rises” and housing blocks;- the haemorrhaging of companies, particularly notable in the commerce and craft sector, where companies have suffered the consequences of impoverishment of inhabitants in sensitive areas, and the decline in their purchasing capacity; - the growth in unemployment, higher than in the area as a whole, reinforces inhabitants’ feeling of exclusion.

In 2004, 12 000 employees covered by the exemption were hired by establishments set up in one of the 79 Economic opportunity zones (ZFU) in mainland France. The doubling in the number of ZFU at 1 January 2004 only partially explains the dynamism of hirings (+42 %) : existing ZFU still account for almost 80% of recruitment. With four ZFU, covering 6 % of the total population of these areas, the Provence - Alpes - Côte d'Azur is now catching up with Ile-de-France : 21 % of hirings in ZFU took place there.

Companies with at most fifty employees, of which at least a third are residents – set up in ZFU.

Délégation Interministérielle à la Ville - DIV (Interministerial Delegation for Urban and Social Development)
France
Mrs. Sabine Thibaud (Economic development project manager at the DIV), tel. +33 1 49 17 46 19

01/01/2004

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Urban Policy > Economy knowledge & employment > Urban economy

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