When Qatar buys Paris

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Did you know that behind the department stores of Paris and the Haussmann buildings there is sometimes a very small country? Qatar. The emirate has purchased dozens of properties in France, thanks to its revenues, and with the goodwill of the French tax authorities. In recent years, the Champs-Élysées have changed a lot. Luxury brands have supplanted more modest brands or cinemas, to the great dismay of Jeanne d’Hauteserre, Les Républicains mayor of the 8th arrondissement. “We will arrive in front of the old cinema, the Normandie, which, unfortunately, has closed”she laments.

This historic cinema, almost a century old, had no other choice but to draw the curtain. Attendance fell while rents became untenable. “The rent for a business is between 15,000 and 17,000 euros per square meter per year. And unfortunately, as the owners do not negotiate or do not wish to negotiate, we found ourselves with many places of culture which left and which disappeared”explains the Parisian city councilor.

At this address, the owner is a company owned by a Qatari dignitary, His Excellency Hamad Al-Thani, the former Emir. And this building is not the only property of the royal family. We have brought together a myriad of companies. Apparently, no mention of Qatar, but all are owned by investors from the country or the Al-Thani family, and their assets are very prestigious.

For example, on and near the Champs-Élysées, Qatar has its embassy and more than ten entire buildings. Ditto around Place Vendôme, where Qatar has several well-established addresses. According to our count, in Paris, the emirate has 71 buildings, 158 buildings throughout France. On the Côte d’Azur, they have even bought famous hotels, the Carlton, the Martinez, and are building a brand new one in the heart of Paris, in a building sold by the French state for 300 million euros.

So why such a real estate frenzy? These representatives prefer secrecy: “We have an internal policy not to communicate on all these subjects. So, I respect the group’s policy”answers Gilles de Boissieu, wealth manager from Qatar. These Qataris may be attracted by a tax advantage. In 2008, Nicolas Sarkozy, to facilitate trade, gave them a nice gift. He exempted them from taxes on their real estate capital gains. Example, in the heart of Paris, with the Lambert hotel. A jewel of classicism, a sumptuous setting of 4,000 m², which a prince of Qatar sold to businessman Xavier Niel. Estimated added value after major work: 100 million euros, according to our information. In theory, under these conditions, a French person should pay at least 7 million euros in taxes on this capital gain. For a Qatari, it’s zero, he is exempt.

This advantage has a cost for public finances, but by how much? A source close to the matter admits to us that the State never made a precise estimate before granting this tax rebate: “As I remember, at the time, there was no impact note, nowhere is it quantified. Above all, at the time, how do you want to quantify the thing in question? Because we would have to know, ex ante, how much Qatar planned to spend and purchase real estate in France”declares our interlocutor. The Ministry of the Economy did not give us further details.

This rebate therefore fuels recurring criticism from all political sides, from the left to the right, up to Emmanuel Macron who made it a campaign promise. “On this subject, I would be very firm. I am putting an end to all agreements which favor Qatar in France”promised the future president. A forgotten commitment. And that makes Henri Guaino, former special advisor to Nicolas Sarkozy, smile. According to him, this advantage is the only way to attract Qatari investors and their wealth to France.

“It’s a tax privilege in return for investments. It’s not a tax privilege, it’s not free, it’s not to please the emirs of Qatar. We want their capital, we want their purchases, their imports of French products, French weapons. And we want to be able to take advantage of their purchasing power to sell them as many things as possible. But in itself, isn’t that aberrant?”he says.

Last year, several MPs asked the government the true cost of this tax agreement during the budget vote. Amendments passed by the wayside.