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On Thursday, October 15, the Multiprofessional Economic Chamber brought together businesses from Saint-Barthélemy to raise awareness about the threats facing the LODEOM, a program that exempts employers from payroll taxes—a measure the Chamber considers essential for the survival of local jobs.
The tone was set right from the start. “We must remain vigilant in defending the LODEOM program,” said Jérémy Laplace, president of the Multiprofessional Economic Chamber (CEM), addressing the business leaders and accountants who had come to attend the meeting. Two experts then took the floor: Maître Sandrine Jaboulay Delahaye, an attorney admitted to the Guadeloupe Bar, and Florian Catte, co-founder of the firm BCD Conseil, which specializes in overseas territories.
A System Unique to the Northern Islands
The LODEOM (Law for the Economic Development of Overseas Territories) allows employers in overseas territories to be exempt from a portion of their employer contributions. Saint Barthélemy and Saint Martin, however, have a separate system. “In 2018, under Overseas Territories Minister Annick Girardin, the government decided to switch to a new system—the LODEOM for the French Overseas Departments (DOM)—which was much more restrictive in terms of wage thresholds, in order to create a fund that was to be invested in the overseas territories,” recalls Sandrine Jaboulay Delahaye. The Northern Islands opposed this change during the drafting of the 2019 budget bill. They retained the old system. A decree issued in March 2019 then established a specific tax exemption scheme for the two territories, calculated on a month-by-month basis and divided into three brackets.
“It’s less favorable in terms of the exemption percentage, but we opted for a broader range of salaries. We felt that the larger territories might have lower salary levels than ours,” explains the attorney. Another advantage, in her view, is that the calculation is monthly. In the French overseas departments (DOMs), it is annual and tied to the general reduction in contributions applied in mainland France—the former “Fillon Law,” now known as the single degressive general reduction. “We’re fighting to keep our specific system. We’re the only ones who benefit from it (Editor’s note: Saint Martin and Saint Barthélemy).”
“Budget cuts”
Why is this system in danger? “Budget cuts,” she replies bluntly. “The government needs to save money—that’s for sure. Our position is this: before increasing the burden on businesses—which could create a domino effect with France Travail, since layoffs might be necessary—let’s try to explore ways to bring in more revenue. We need to focus on budgetary revenue.”
The threat is not merely theoretical. In the fall of 2025, the government had already planned, in its draft Social Security budget for 2026, to eliminate the separate system for Saint Barthélemy and Saint Martin and transfer them to the system for the French overseas departments (DOM). The measure was ultimately abandoned following budget debates. A few weeks earlier, a parliamentary report spearheaded by Guadeloupe Representative Christian Baptiste had also recommended merging the two systems. More recently, and along the same lines, a new report commissioned by the government and authored by Philippe Leyssenne and Gilles Lara-Adélaïde proposed simplifying the LODEOM. According to Sandrine Jaboulay Delahaye, the report completely overlooks the unique situation of the Northern Islands.
A Direct Threat to Local Jobs
For the attorney, abolishing the law would have immediate effects on employment: “It’s automatic. If I increase your labor costs, you can hire fewer people, you’ll have to lay off workers, or you’ll go into bankruptcy.”
According to her, the strength of the Northern Islands in this battle—which they wage every year—lies in their unity. “Every year, the government tries to undermine our system. Our greatest strength is, first and foremost, that we care about the issue, that we’re represented to some extent in all national organizations, and that we make our voices heard. We’re able to come together and speak with one voice, whereas other territories may have more difficulty doing so.”
Thursday’s meeting also had a more pragmatic goal. “We want to raise awareness among businesses so they understand that, in any case, we can’t remain stagnant, and that we need to find alternative solutions and toolkits,” the attorney concluded.
