Grants may take the form of assistance to buy buildings and equipment (or the provision of low-cost business premises), subsidies for job creation, or tax incentives.
Most government subsidies are intended to provide support for small businesses already up and running, but there are occasionally specific subsidies available for new businesses, particularly for individuals who have been unemployed for a long period. Some regional governments offer subsidies to new businesses, particularly if local jobs are assured or local skills put to good use. Most grants apply only to the creation of a first business. Even if you’re eligible for a grant and it has been approved, you shouldn’t bank on receiving it, as it can take months or even years to materialise. Schemes include the following (in order of scope, from Europe-wide to local):
- European Union Grants & Subsidies – Information about EU grants and subsidies available in France can be obtained from Euro-Info Centres, a list of which can be found on www.info-europe.fr/document.dir/fich.dir/ QR000737.htm.
- Encouragement au Développement d’Entreprises Nouvelles – This national programme ( EDEN) was originally established to work with young people and those in ‘precarious situations’ (i.e. working on fixed-term contracts), but in 2004, the programme was opened up to include people over 50 who have been unemployed for some time. Information about available subsidy programmes can be obtained from the APCE (see above) or through your local centre de formalités des enterprises.
- Primes d’Aménagement du Territoire – The French Ministry of Equipment, Transport and Tourism, through its agency DATAR, offers a prime d’aménagement du territoire, which is an incentive scheme for businesses setting up in ‘special development’ zones – geographical areas declared to be in need of development, including urban areas ( zones de redynamisation urbaine/ZRU), rural areas ( zones de revitalisation rurale/ZRR) and other regions. The local chamber of commerce or Chambre des Métiers can indicate what zones exist in your region or department, or you can consult a map of the eligible areas on the DATAR website (www.datar.gouv.fr – click on ‘ Aide aux entreprises’). Incentives generally involve tax breaks rather than direct funding for new businesses, e.g. a partial exoneration from business taxes over the first five to seven years of the company’s existence. The exoneration decreases over time: in the case of the five year scheme, for example, there’s 100 per cent exoneration for the first two years, 75 per cent in the third year, 50 per cent in year four and 25 per cent in year five.
- Fonds de Revitalisation Economique – This fund is aimed at small and medium-size businesses (with no more than five employees) setting up in development zones (see above). Grants are of around €3,000 and must be claimed within the first year of operation. For details, contact your local chamber of commerce.
- Fonds d’Intervention pour les Services, l’Artisanat et le Commerce – This is a central government initiative administered by regional Délégations au Commerce et à l’Artisanat (DRCA) and local chambers of commerce and guilds to support the creation of businesses (other than pharmacies and anything connected with tourism) in villages and towns with fewer than 2,000 inhabitants.
- Dotation de Développement Rural – This is a national scheme designed to revitalise rural areas by offering grants and incentives for the construction of business premises or the renovation of existing premises for business use; although grants aren’t made directly to businesses, it’s worth finding out whether such a scheme is in operation, as the resulting premises can be sold or rented at low cost.
Further Information: To find out about possible grants, incentives and competitions, start by contacting your local town hall or mairie, the relevant ccentre de formalités des entreprises and the departmental chamber of commerce. For further information about grants and incentives, contact Invest in France (www.afii.fr ).
Financial Benefits
The French government offers new businesses a number of financial benefits or incentives, including those listed below. Note, however, that the nature and value of these are subject to sudden change with a change of government or financial policy and you should check with your local tax office before including any incentives in your financial calculations.
- Income tax reductions and exemptions for companies setting up in ‘special development’ zones;
- Delayed payment of first four corporate tax instalments for businesses not in special development zones;
- Exemption from IFA for the first three years for certain types of company;
- Twenty per cent corporate or income tax reduction plus €915 tax reduction for businesses belonging to a centre de gestion;
- Reduction in corporate tax to 15.45 per cent on profits up to €38,120 under certain conditions;
- Exemption from taxe professionnelle, property tax and other local taxes for the first two years;
- Tax benefits for businesses investing at least 15 per cent of their turnover in research and development;
- Other financial incentives for limited and public companies.