Invest in France Agency north-america Office

Can foreign businesses setting up in France obtain public financial support?

All European Union member states, including the new Eastern European members, are subject to European Commission regulations, which set the limits and framework for financial assistance awarded to economic players. In this respect, the European community is able to ensure healthy competition between companies within a single market in order to maintain equality. Requests for subsidies must be made upstream from the investment project. They depend on the size and nature of the company, the amount of investment, the type of project and the number of jobs created.

Within this European Union framework, the member states are free to support the development of specific economic activities. France’s desire to create a favorable business environment is demonstrated by the extent and diversity of the public financial support available. This financial aid effectively supports company start-ups, job creation, investment and the development of businesses in France. Public financial support is granted by the French state and local authorities such as regional, departmental, inter-communal or town councils. It can take the form of a simple grant, a loan, or tax credits, etc…

Within this framework, France can provide 6 types of financial assistance to investors:

• Regional subsidies for investment in production industries in regions that are lacking economic development or undergoing industrial restructuring, according to a specific map approved by the European Commission,

• Financial assistance for R&D activities can be awarded in order to help finance companies’ in-house R&D activities,

• Assistance for professional training for salaried employees to support company training projects,

• Employment subsidies at a regional or national level for specific sectors of the working population (young unemployed, long term unemployed, among others),

• Financial assistance for investment and job creation, aimed at small and mid-sized businesses all over France,

• Environmental subsidies to enable small and mid-sized companies to achieve the current norms and larger groups to surpass these norms.

The IFA informs investors of the specific subsidies to which they are entitled.

If I set up my business in France, what assistance will I receive to finance my investment project and recruit personnel?

France’s desire to create a favorable business environment is demonstrated by the extent and diversity of the public financial support that is available.
In regional zones for example, financial grants can be awarded for up to 15% of the total investment for large companies and a quarter of the total investment for mid-sized companies.

Job creation

The Prime d’Aménagement du Territoire is a regional development grant of up to 15 000€ per job created.
Grants for corporate training There are several sources of assistance (Europe, French State, local authorities) which enable companies that are setting up their business to finance a significant proportion or all of their professional training expenses.

Subsidies for business premises

As well as subsidies for investment projects in production activities (all companies in specific regional zones, or small and mid-sized companies throughout the French territory), local authorities can also offer subsidies to finance the construction or leasing of business premises or the acquisition of land.

Tax incentives

Business tax – local tax levied on business activities – can be reduced or even waived for a period of 5 years for industrial companies, or companies in the scientific or technological fields. Business tax and property tax are adapted according to the zone in which the business is located, in order to attract investors.

Is it easy to be innovative in a country like France?

Yes, because encouraging innovation within business is a priority in France. Subsidies, loans, tax credits…. the scope of public assistance is very broad and the amounts are considerable. They are particularly beneficial for small and mid-sized companies and young start-up companies, and they encourage partnerships between private businesses and public sector research.

Public sector assistance

Policies to support company in-house research activities have been introduced.
Various measures have been introduced to support innovation within private companies at every stage of their development. Ministries, government agencies and local authorities employ measures to encourage R&D activities, from the initial research stage, through feasibility studies, to the final prototype: subsidies can be awarded to laboratories and companies involved in public/private sector partnerships, to small and mid-sized innovative businesses, but also to major industrial projects.

Tax incentives

R&D activities benefit from a specific system of tax credit which can total 16 million euros per company per year, or up to 8 years of social security payment exemptions for a young start-up company.

Research tax credits can cover between 10% and 50% of a company’s total R&D expenses (according to the date of business creation). The amount can be deducted from corporate tax or reimbursed in cash after a 3 year period, except for new companies, young innovative companies (JEI) and “gazelles” which benefit from immediate reimbursement.
Expenses covered by the research tax credit include salaries for research scientists, depreciation, operating costs, patent costs or costs related to research missions allocated to registered organizations.
Young innovative companies (JEI) can further benefit from social security exemptions for research scientists’ salaries, corporate tax exemptions for 5 years (capped at 200 000€ per 36 month period) and can also benefit from business tax and/or property tax exemptions for 7 years (subject to local authority approval).

Employment grants

In almost every region in France, companies that set up a R&D project can obtain a Prime d’Amenagement du Territoire, which is a development grant that can total up to 25 000€ per job created.

Clusters

French clusters, including 66 clusters that were officially designated by the French government in October 2005 (5 new clusters have been designated recently), are made up of a network of companies, research and training facilities. The French government supports these clusters with a dedicated budget of 1.5 billion euros over 5 years. Clusters also benefit for example from a corporate tax franchise.