On 28 July 2026, French Overseas Minister Naïma Moutchou confirmed that the LODEOM and RAFIP social charge exemption schemes will be maintained in the 2027 budget bill. A decision welcomed by 30,000 businesses and protecting 120,000 jobs on an island with 17.5% unemployment.
The Long-Awaited Confirmation
After months of budgetary uncertainty and unprecedented mobilisation by Réunion's business community, Overseas Minister Naïma Moutchou has settled the matter: the LODEOM (employers' social charge exemptions) and RAFIP (productive investment tax aid) schemes will be maintained in the 2027 finance bill. Her statement leaves no room for ambiguity: "This represents a clear choice for stability, confidence, and support for employment and investment in overseas regions."
The confirmation follows an evaluation completed in April 2026 by Philippe Leyssenne and Gilles Lara-Adelaide, which recommended not abolition but simplification and improvement of the schemes. Their recommendations will shape autumn discussions with stakeholders.
30,000 Businesses, 120,000 Jobs Directly at Stake
The stakes were considerable. According to data cited during National Assembly debates, LODEOM directly concerns 30,000 businesses and 120,000 jobs on Réunion — on an island where unemployment stands at 17.5%, more than double the national average. The Chamber of Commerce president had warned that eliminating these competitiveness tools would be "counterproductive," particularly in a context of structural economic fragility.
The National Assembly had already rejected proposed cuts to LODEOM in the 2026 finance bill in November 2025 — the first signal that overseas territories had the political weight to defend these schemes.
Schemes at the Heart of Réunion's Competitiveness
LODEOM covers employers' social charge exemptions calibrated by company size and sector, allowing Réunion employers to partially offset structural extra costs linked to insularity — logistics costs, distance from suppliers, limited domestic market. Without these mechanisms, many local SMEs and micro-businesses would lose a significant share of their competitiveness against mainland French companies or imported goods.
A Modernisation Agenda Opens
The minister announced the publication of an "ambitious roadmap" in the coming weeks, incorporating expert recommendations. The goal: simplify the schemes while making them more effective and better targeted at businesses that create jobs and local economic activity.
Why It Matters
In a territory where every job counts and business competitiveness partly rests on compensatory mechanisms, maintaining LODEOM is a lifeline for Réunion's economic fabric. It also signals that Paris is listening to the specificities of overseas economies.
Sources: Imazpress, La 1ère / Franceinfo, Bâtisseurs Outre-Mer, July-August 2026.