PARIS: The Champs-Elysees lures millions of tourists every year to enjoy shopping at the Elysees 26 mall, poker at the Aviation Club, plush cars and futuristic architecture in the Citroen showroom, or feather-clad showgirls at the Lido cabaret.
But for all their Parisian charisma, none of these attractions are French-owned. They belong to the royal family of Qatar, a resource-rich emirate about 3,000 miles (5,000 km) away.
Some Muslims may frown on investments in gambling, alcohol and high-kicking dancers, but over the past few decades the buildings have helped bolster Qatar's global portfolio of trophy assets, including London's Harrods and Singapore's Raffles Hotel. The latest French addition was a chain of upscale malls under the Printemps banner, bought by a fund controlled by Qatari royals in August for 1.7 billion euros ($2.23 billion).
For oil-rich royalty from the Arab Gulf, part of the attraction of the United Kingdom has been the fact it charges no taxes on profits foreign investors make when they sell real estate. Five years ago, Qatar sealed a similar agreement with France. The treaty was agreed by former centre-right president Nicolas Sarkozy in 2008, and is one of the most generous Qatar has secured, exempting Qatari investors from taxes on the profits they make when they sell properties.
In a country where 3.6 million people lack decent housing, according to Abbe Pierre, a charity, that is controversial.
Politicians, including some in Francois Hollande's new Socialist government, have been critical. In April budget minister Bernard Cazeneuve called the treaty "an exception that we do not wish to duplicate." Others have asked if the accord brings economic benefit to compensate for the lost tax revenue.
The government has said it is examining the treaty, but an official at the French finance ministry told Reuters that Qatar's purchases don't have to be declared, so it is impossible to see how much tax is at stake.
A Reuters examination of regulatory filings, court documents and other data sheds new light on Qatar's property assets. Reuters mapped around 40 properties in France that are owned by Qataris, a total investment of 5.9 billion euros ($7.8 billion) over the past decade, including 4.8 billion since 2008. At current values they would be worth around 6.3 billion euros.
The Qatari state and its sovereign wealth fund own about a dozen of the properties, together worth around 3 billion euros, Reuters found; the rest belong to members of the ruling al-Thani family. A personal fund set up by Sheikh Hamad bin Khalifa al-Thani, the previous emir, controls about nine of them; his children, including the current emir, six. The rest were bought either by other relatives, or businessmen with strong ties to the al-Thanis, such as Ghanim bin Saad al-Saad.
Each property is owned by a holding company that is itself held by one or more entities, some of them outside France. This makes it hard to track when properties change hands, to see how much tax the French have forgone with the deal.
If there had been no treaty, though, market values at the end of 2012 suggest the French government would have collected at least 145 million euros in tax if the entire portfolio were sold and taxed at the lowest applicable rate, according to Reuters calculations which were assessed by three experts.
While that's less than a day's gas export revenues for Qatar, in France it would equate to a year's pre-tax pay for some 4,500 schoolteachers or nurses.
The Qatari authorities and the sovereign wealth fund Qatari Diar did not respond to questions. Chadia Clot, whose company French Properties Management handles private investments made by the al-Thani family, did not respond.
Gilles Kepel, a professor at the Paris Institute of Political Studies, Paris, said Qatar's financial gains symbolise how the emirate has gained influence by spending its resource wealth, but has also triggered friction.
" Qatar has had a full-speed-ahead investment strategy in France, forged under the previous French administration," said Kepel. "But this has led to antagonism."
In 2008, a report for the French parliament praised the tax arrangement for encouraging Qatari investment in French real estate which "can only benefit the French economy." The treaty has several clauses to promote the exchange of information and prevent abuse, and France has similar arrangements with other rich oil states such as Kuwait and Saudi Arabia.
Qataris have been particularly active since the deal was sealed. From the Virgin Megastore flagship to the Hotel Martinez in Cannes, from soccer club Paris Saint-Germain to farmland in Normandy, Qatari royals have acquired dozens of properties.
"It is thanks to these tax advantages that the Qataris are the only ones buying French property at the moment," said Philippe Chevalier, head of French real-estate broker Emile Garcin. "I would support more of these advantages."
The treaty allows state-owned Qatari entities to avoid capital gains tax - the lowest rate would be 34.4 percent - on any profits made selling French property, whether held directly or via subsidiary companies. Private Qatari investors are entitled to the break as long as they hold the property in an investment vehicle that also has 20 percent in non-property assets. The treaty applies to all purchases made since January 2007.
Buoyed in part by Qatari investors, Paris luxury property prices have risen by approximately 14 percent since 2008, according to data for the highest-priced residential bracket tracked by real estate analysts Investment Property Databank (IPD).
France may have caught up with Britain in attracting Qatari investments, according to data from research firm Real Capital Analytics (RCA) on the UK commercial property market. Qataris have spent about 4.5 billion euros ($5.9 billion) on publicly disclosed commercial and development sites in the UK since 2008, the data shows.
Keeping up with the British was, say former French trade officials and policy analysts, one reason to agree the treaty in the first place. In 2008, oil producers were riding a boom in commodities just as centres like London, New York and Paris took a hit from the financial crisis. Many Western capitals were keen to capture investment: Paris was promoting Islamic finance, and saw the deal as a way to spur growth.
"What this treaty does is effectively put Paris on a level playing field with London - just not for everyone," said John Forbes, a London-based real-estate consultant.
Aside from the United Kingdom, only Ireland has offered Qatar the same exemption and that only since 2012, a review of more than a dozen of the emirate's bilateral tax treaties shows. At home, Qataris face no personal income taxes but some businesses could be taxable at up to 10 percent on gains from the sale of property.
"The exemptions ... are on the generous side, even by the standards of other French treaties," said Charles Beer, managing director at consultancy Alvarez & Marsal. "This level of treaty exemption is rare, if not unknown, in other countries' treaties."
Just a stone's throw from the Champs-Elysees, the magnificent Peninsula Hotel shows how the treaty - which was an update of a pact dating back to 1990 - favours Qatari investors.
Promising a "new level of distinction" for the Paris luxury hotel market, for the time being the hotel is hidden behind scaffolding and a corrugated-iron fence. It's due to open in 2014.