Top Stories
Top Stories
Europe News

France’s Silicon Valley to launch start-up hub

Virtual image of Paris' prospective incubator for 1,000 start-ups

Paris' ambition to become a global hub for entrepreneurship took a definite step forward on Tuesday, with the launch of a project to build the world's biggest start-up incubator, where fledgling entrepreneurs can receive help to grow their businesses.

If all goes to plan, the project, which is called 1000start-ups, will see 1,000 entrepreneurs share a currently unused building, which will be equipped with working spaces, a big auditorium, several boardrooms and a "fab lab" (a small-scale workshop equipped to make digital prototypes). Paris's city council will contribute 70 million euros ($94.5 million) to acquire the building, which is currently owned by the state-owned railway service, SNCF.

(Read more: Fears France's budget will hit its economy)

The proposed 30,000-square meter building is located in Paris's 13th arrondissement on the southern bank of the river Seine. The area is already known as Paris's "Silicon Sentier", with several existing incubators and two R&D-focused universities.

"Paris is a magical city, a city that attracts people from around the world and where a real energy around digital is developing. But young companies that want to settle there are faced with a lack of affordable, practical and high-speed equipped places,"Xavier Niel, a French entrepreneur and co-financer of the project, told Journal du Dimanche newspaper.

Incubators are not new to theFrench capital. At present, around 550 start-ups are run from Parisianincubators, where they benefit from services such as low-rent business space.

(Read more: François Hollande admits French taxes are 'too much')

Current view of the Halle Freyssinet.

French entrepreneurs welcomed the new project, saying that being in an incubator offered visibility, as well as "chaperones" that could help start-ups meet the right contacts and tap finance. However, they complained that the general climate for start-ups in France remained full of constraints.

Loic Benhayoun, commercial and marketing director for MediaStanza, a start-up that develops interactive animation, likened the process of establishing a company in France to an"assault course", where you had to "fish for information" and battle against red-tape.

Camille Tyan, founder and CEO of e-payment platform PayPlug concurred. "The regulatory aspect poses a lot of problems such as labor costs,which are quite heavy for small businesses."

(Read more: Vive la robotic revolution? Hollande's 10-year plan)

Follow us on Twitter: @CNBCWorld