There is a lot of aids available for business creators: Acre, Nacre, loans, repayable advances, tax credits, etc. Here’s some information on the most common ones to understand how they work.
We can obviously determine which ones best suit your project and even help you to formulate your request.
I – A list of the main forms of creative support
Aid for business creation or takeover can take different forms:
- the payment of a sum of money, repayable or not: grant, honorary loan, participatory loan, subsidized loan, repayable advance;
- loan guarantee system, scholarships to support financing needs;
- tax relief, in the form of a deduction, reduction or tax credit;
- an exemption from social contributions;
- financing training, consulting services;
- accommodation for the young company at a price lower than the market price;
- Etc.
II – Presentation of the main aids for setting up a business
1 – Regional aid (linked to the location of the company)
> France rural revitalization zones (ZFRR and ZFRR+)
Municipalities in metropolitan France whose population is less than 30,000 inhabitants and which are members of a public intermunicipal cooperation establishment whose population density is low are classified as ZFRR.
Municipalities classified in a ZFRR (as defined above) and members of an EPCI with its own tax system facing particular difficulties over a period of at least 10 years are classified as ZFRR+.
We will obviously be able to send you the list of municipalities classified ZFRR or ZFRR+ as soon as it becomes available (in the following months).
> Exemption from tax on profits in ZFRR and ZFRR+
To be eligible, companies must carry out an industrial, commercial, artisanal or professional activity.
To benefit from the ZFRR+ exemption measures, the company whose activity is created must belong to the category of micro, small and medium-sized enterprises.
To benefit from the exemption measures in ZFRR, the company must employ fewer than 11 employees and establish its head office in ZFRR as well as all of its activity and its operating resources.
Determination of the exemption: the exemption is total for 5 years, then partial for 3 years. For profits made during the 1st, 2nd or 3rd period of 12 months following this total exemption period, the profits are respectively taxed for 25%, 50% and 75% of their amount.
> Optional and temporary exemption from CFE in ZFRR and ZFRR+
Municipalities and EPCI with their own tax system may exempt from business property taxes (CFE), establishments (or extensions of establishments) carrying out an industrial, commercial, artisanal or non-commercial professional activity created by companies benefiting from the corporation tax exemption in the ZFRR and ZFRR+ zones.
The CFE exemption is subject to a decision by the municipalities or their EPCI, taken before October 1st to be applicable the following year.
> Other areas eligible for an exemption
A large number of the aids presented below will gradually disappear to be replaced by the ZFRR and ZFRR+ regime.
> Regional aid zones (ZAFR)
New companies subject to a real tax regime and established until December 31st 2027 in the ZAFR benefit, under conditions, from an exemption from income tax (IR or IS) for 24 months, then from a decreasing reduction for the following 3 periods of 12 months (75%, 50%, 25%). Companies exempt from income tax may, upon deliberation of local authorities, be exempt from CFE and property tax on built properties (TFPB), for the 2 to 5 years following that of their creation.
To benefit from aid the company must be truly new, thus, when the company is incorporated as a company, the share capital must not be held, directly or indirectly, for more than 50% by other companies.
> Urban free zones (ZFU)
Companies established in these zones until December 31st 2024 can benefit from a tax exemption (IR or IS). The system consists of a total exemption of profits from activities established in the ZFU for 5 years, followed by a period of decreasing exemption.
These exemptions are reserved for small companies employing 49 employees at most, which achieve a turnover or have a balance sheet total of less than €10 million, and whose capital or voting rights are not held directly or indirectly for 25 % or more by companies whose workforce exceeds 250 employees and whose annual turnover excluding tax exceeds €50 million or whose annual balance sheet total exceeds €43 million.
> Urban basin to be revitalized (BUD)
A profit relief regime is open to companies created until December 31st 2026 in a BUD. Exemptions from local taxes (property tax and CFE) are also provided.
Companies eligible to benefit from this system must meet the following conditions:
- have their head office and all their activities located in the BUD;
- not be created as part of a takeover, transfer, concentration, restructuring or extension of pre-existing activities;
- be SME within the meaning of Community law: a turnover of less than €50 million (or a balance sheet total of less than €43 million), and an employee workforce of less than 250;
- not be more than 50% owned directly or indirectly by other companies;
- have at least half of the company’s employees on permanent contracts (or on fixed-term contracts of at least 1 year) residing in the BUD.
> Priority development zone (ZDP)
A profit relief regime is open to companies created until December 31st 2026. Eligible companies benefit from a total exemption from income tax (IR or IS) on the profits made during their first 24 months of activity, then a decreasing exemption for the following 3 years. Certain companies may benefit from a temporary exemption from CFE.
Companies whatever their form can benefit from this aid, provided that they have a turnover of less than €50 million (or a balance sheet total of less than €43 million) and that their employee workforce does not exceed 250.
> Employment areas to be revitalized (BER)
Two regions are affected by this system: Champagne-Ardenne (Meuse Valley employment zone) and Midi-Pyrénées (Lavelanet employment zone).
The creation of activities carried out before December 31st 2024 in the BER benefit from an exemption from income tax (IS or IR) and TFPB. These companies can benefit from an exemption from CFE until June 30th 2024.
It seems that all forms of companies (commercial, artisanal, industrial or non-commercial) are eligible to benefit from these exemptions.
> Revitalization zones (ZoRCoMiR and ZRCV), ZAIPME and QPV
These are exemption schemes for local taxes in investment aid zones for SME(ZAIPME), rural business revitalization zones (ZoRCoMiR), revitalization zones in center-city (ZRCV) and certain city districts (QPV).
Concerning ZAIPME, companies are eligible whatever their form, but they must however have a turnover of less than €50 million (or a balance sheet total of less than €43 million) and have an employee workforce of no more than 250.
Concerning other areas, contact us to find out if you are eligible for aid.
Note: The measures specific to each zone regime are often complex, do not hesitate to inform us about your situation and your project if you wish to know the precise rules.
2 – Support for innovation
> Research tax credit (CIR)
This tax credit concerns industrial, commercial, artisanal and agricultural companies, whatever their legal form and their size, taxed according to their actual profit (as well as certain companies exempt from tax – see above) carrying out research expenses.
> Expenditures concerned
Expenditures qualifying for the CIR are those relating to fundamental and applied research operations, including the carrying out of design operations, prototypes or pilot installations.
The expenses must be linked to operations located in a state of the European Economic Area which has concluded an administrative assistance agreement with France with a view to fight tax fraud or evasion.
> Expenditures qualified for the tax credit
The CIR concerns depreciation allocations for fixed assets allocated directly to research, personnel expenses (researchers and research technicians). These expenses include salaries and mandatory social charges.
> CIR amount
The tax credit is deducted from the income tax or corporate tax owed by the company for the year during which the research expenses were incurred. Its amount is determined per calendar year regardless of the closing date of the financial year. Its amount is equal to:
- 30% of the amount of research expenditure less than or equal to 100 million euros;
- 5% of expenditure above 100 million euros;
- 20% in the frame of an innovation tax credit.
> Tax credit for collaborative research (CRC)
The CRC concerns, as above, industrial, commercial, artisanal and agricultural companies, whatever their legal form and size, taxed according to their actual profit (as well as certain companies exempt from tax – see above) and incurring expenses of research.
> Expenditures concerned
These are expenses invoiced by approved public or private research and knowledge dissemination organizations as part of a research collaboration contract concluded between January 1st 2022 and December 31st 2025.
> Amount of tax credit
It is equal to 40% of the expenses invoiced to companies by research organizations for carrying out the research operations provided for in the contract. Within the limit of €6 million in expenses per year.
The tax credit rate will be increased to 50% for SME within the meaning of European law, namely:
- less than 250 employees;
- turnover less than €50 million or total balance sheet less than €43 million.
> Innovation tax credit (CII)
This is a support system for innovative companies which complements the research tax credit. Its objective is to support SMEs which incur specific expenses to innovate.
It concerns small and medium-sized industrial, commercial, artisanal and agricultural enterprises corresponding to the definition of SME made by the European Community which incur expenses for the design of prototypes or pilot installations of new products.
The amount of the innovation tax credit is equal to 20% of the expenses (referred to above) incurred by the company, themselves capped at €400,000.
> Young innovative company (JEI)
This status allows SME which incur research and development (R&D) expenses representing at least 15% of their costs to benefit from a certain number of tax and social security exemptions.
> Companies concerned
They must meet the following conditions:
- have less than 8 years of existence at the time of the request;
- be truly new, that is to say not having been created as part of a concentration, a restructuring, an extension of a pre-existing activity or a takeover;
- employ less than 250 people, have a turnover of less than 50 million euros and have a balance sheet total of less than 43 million euros at the time of the request;
- their capital must be held for at least 50% by natural persons, one or more other JEI or associations or foundations recognized as being of public utility of a scientific nature, research and educational establishments, etc.;
- carry out R&D expenses representing at least 15% of expenses.
There is also a category of JEI, young growth companies (JEC). The criteria are the same as those of JEI but they must meet additional conditions to qualify them as companies with high growth potential (the conditions will be provided to you upon your request).
In return for these additional conditions, the required threshold for R&D expenses is lowered to between 5 and 15% of expenses.
> Research expenditures retained
Here are the main ones:
- depreciation allocations for fixed assets created or acquired allocated directly to research operations;
- personnel expenses (researchers and research technicians);
- other operating expenses retained for their actual amount;
- expenses for operations of the same nature entrusted to public research organizations, approved scientific cooperation foundations, approved associations, etc.;
- the costs of taking out and maintaining patents and plant variety certificates;
- standardization expenses relating to the company’s products, retained for their actual amount.
> Tax and social exemptions
- Corporate tax: JEI (or JEC) can benefit from exemptions granted to new companies established in certain regional planning zones or to companies carrying out or creating an activity in an urban free zone (see above).
- Territorial economic contribution (CET) and property tax: They can be exempted for 7 years upon deliberation of the local authorities.
Please note: tax aid granted to companies placed under the JEI regime cannot exceed the “de minimis” aid ceiling set by the European Commission. - Employer social contributions: For 8 years maximum, the exemption covers part of the remuneration paid to researchers, technicians, research and development project managers, lawyers responsible for industrial protection and staff responsible for pre-competitive tests.
It is also open to corporate officers covered by the general social security system and participating in the R&D project as their main activity.
The exemption from employer contributions only concerns health insurance, maternity, disability, death, old age and family allowances.
> Young University Company” (JEU)
This scheme concerns companies created by students from higher education. Creators benefit from social and tax advantages similar to those of the Young Innovative Company (JEI).
In addition, the company must be managed or directly owned for at least 10% of its capital by one or more students, or persons who have held a master’s or doctorate for less than 5 years, or persons assigned for teaching or research activities. Its main activity must also be the promotion of research work in which the managers or partners have participated. On the other hand, the rate of 15% of research expenses in relation to charges is not required.
JEU benefit from exemptions similar to those enjoyed by JEI and, in addition, a temporary exemption from tax on profits for 2 years (100% in the first year and 50% in the second year).
3 – Other assistance for business establishment
> Income tax reduction for subscription to the capital of unlisted companies
This system allows taxpayers who subscribe to the capital of SME to benefit from a reduction in their income tax equal to 18% of the sums invested each year within the limit of a ceiling, either when it is established or when ‘a capital increase.
This tax advantage concerns individuals domiciled for tax purposes in France. They must undertake to keep the securities received in exchange for the subscription for at least 5 years.
> Conditions to be fulfilled by the company
There are many conditions, we indicate the main ones below, you can ask us for them all:
- be an unlisted company on a French or foreign market;
- be subject to income tax under common law conditions;
- carry out a commercial, industrial, artisanal, liberal, agricultural activity, or a solidarity enterprise of social utility, with the exception of certain activities;
- on the date of the taxpayer’s initial investment, the company is still not carrying out any activity on a market (or carrying out its activity on any market for less than 7 years after its first sale, or carrying out its activity whatever it is for less than 10 years after its recording);
- have its registered office in a Member State of the European Union or in another State party to the agreement on the European Economic Area;
- employ at least 2 employees on the closing date of the financial year following subscription (1 employee in the case of a craft business);
- fulfill the criteria of an SME in the Community sense.
> Conditions that the subscription must meet
- Be carried out in cash either when the company is formed or during a capital increase;
- confer only the rights attached to the status of shareholder or associate and not offer other advantages;
- not provide any capital guarantee agreement to its partners or shareholders;
- not be made after a reimbursement of contributions in favor of the subscriber made in the previous 12 months by the company.
> Amount of income tax reduction
It amounts to 18% of the amount of payments with an annual ceiling for payments:
- €50,000 (single person);
- €100,000 (couples under joint taxation).
However, there is a special income tax reduction for contributions made to a JEI: it is equal to 30% of the amount of payments made into a JEI and JEC (or 50% of the amount of payments made into a JEIR).
In addition, the annual ceiling for payments (only in a JEI or JEC) are higher:
- €75,000 (single person);
- €150,000 (couples subject to joint taxation).
> Hiring aids
Companies recruiting staff can, under certain conditions, benefit from temporary cost reduction measures, some of which are listed below:
- Free employment (QPV): Concerns companies hiring a job seeker or a person under a professional security contract or a young person followed by a local mission not registered as a job seeker, residing in a QPV on a permanent contract or in Fixed-term contract of at least 6 months;
- Apprenticeship contract: A company which hires a person under an apprenticeship contract benefits from aid amounting to €6,000 (only the first year of the contract);
- Professionalization contract: It takes the form of a permanent contract or a fixed-term contract (CDD) with a professionalization action period of between 6 and 12 months minimum. The aid consists of various financial aids as well as a reduction in social security contributions;
- Various aids for hiring disabled people;
- Hire up to the 49th employee in rural revitalization zones (ZRR): The aid consists of a total exemption from contributions for remuneration less than or equal to 1.5 SMIC, or decreasing between 1.5 SMIC and 2.4 SMIC;
- Aid for hiring in ZRDs or in employment areas to be revitalized (BER): It consists of exemptions from employer social charges;
- Hiring aid in the overseas departments, Saint-Martin, Saint-Barthélemy and Saint-Pierre-et-Miquelon: The aid consists of an exemption from employer social charges.
> Financial aids
There are venture capital funds which mainly intervene in the creation of an innovative, high-growth company or as part of the development of an existing company. Their objective is to acquire a stake in the company (unlisted) and give impetus to its growth through a significant contribution of equity which will allow them to raise additional funds. The main ones are Bpifrance or the region when it has created investment funds in partnership with private and institutional financiers.
There is also a private fund, France Invest, which brings together all the private equity structures established in France.
It is also possible to obtain a loan from solidarity financiers such as:
- “La Nef”: a cooperative solidarity finance company, which mainly finances activities with an ecological, social and cultural dimension;
- “Autonomie et solidarité”: that finances businesses in Hauts de France. Its action is to fight against unemployment and exclusion by promoting a return to employment, but also to help business creation, development and takeover projects;
- “Initiatives pour une économie solidaire (IéS)”: Its aim is to create employment, by financing the creation or development of businesses in the Midi-Pyrénées region;
- “Crédit coopératif”: Cooperative bank whose objective is to promote an economy with strong social and environmental added value.
There are still other specific aids which have not been mentioned here and all the conditions of the ones presented here are quite complex, do not hesitate to contact us and detail your project so that we can find out more on the subject.
