"There will be no cuts." France's Overseas Minister Naïma Moutchou provided a formal guarantee during her visit to Réunion: LODEOM, the central tax support scheme for overseas businesses, will be fully maintained for 2027. A relief for Réunion's business community after months of budgetary uncertainty.
LODEOM: a vital cornerstone of Réunion's economy
The Law for Economic Development of Overseas Territories (LODEOM), adopted in 2009, forms the foundation of Réunion's economic attractiveness. It allows businesses to benefit from social contribution exemptions and productive investment subsidies — mechanisms that partially offset structural cost overruns associated with insularity and remoteness.
The spring 2026 budget debates had caused widespread concern: proposals to cut LODEOM credits by 10 to 15% had circulated in the National Assembly before being rejected by a parliamentary vote. The minister's visit to Réunion now definitively seals the issue for 2027.
Additional announcements for the business community
Beyond LODEOM, Naïma Moutchou outlined additional measures: maintained productive investment subsidies, a review of the ecological malus to account for the specific constraints of overseas territories, and a strengthened Choose Outre-Mer programme — the French-language version of Choose France — launched on 1 October to attract investors.
The Choose Outre-Mer programme had already secured €12 million for Mayotte. Réunion is targeting a similar outcome in the months ahead.
LODEOM in the 2027 budget: arbitration still pending
Confirmation of the scheme's maintenance does not mean an identical renewal. The Réunion Chamber of Commerce had adopted an "ambitious" 2026 budget "despite national tensions" and the Region adopted an increased budget — both signals of institutional confidence. But Réunion businesses are still awaiting details of 2027 budget arbitrations to calibrate their investment decisions.
Why it matters
LODEOM represents several hundred million euros in annual tax relief for Réunion businesses. Its abolition or significant reduction would have had a direct impact on employment and private investment in a territory where unemployment remains structurally high. Confirmation of its maintenance is therefore a strong signal to local investors and mainland French companies considering setting up in Réunion.
Sources: La 1ère / France Info Réunion, linfo.re, imazpress.com.