12. Financial Assistance in France

1. 12.1. Assistance to Unemployed
2. 12.2. Regional Development Schemes
3. 12.3. Bank Finance
4. 12.4. Employees

There are a range of schemes available that offer financial assistance to a business start-up.

Assistance is also available for existing business’s who wish to expand or recruit new employees.

The schemes are administered by a variety of different bodies at a national and a regional level. They are also poorly advertised and many new business owners fail to take advantage of the assistance that is available.

We can only sympathise with anyone seeking to find out whether or not they might be eligible for assistance!

It is, therefore, quite possible that a large part of your time on a business start-up could be spent doing the rounds of the various agencies and authorities, trying to establish if you might be eligible.

If you speak reasonable French then you should also work your way through the relevant web pages of the national business start up agency APCE, which has a list of most of the main schemes.

In general, most schemes offer a reduction or exoneration from tax or social contributions and few offer actual grant aid or soft loans towards the establishment of a business.

There are also a range of subsidised employment contracts for the young, elderly and unemployed, or to assist in the development of particular sectors of the economy. Thus, as a result of new measures introduced at the start of 2007, there are particularly attractive wage subsidies available to those running a hotel, restaurant, or cafe.

In pretty well all cases there is a lot of paperwork to complete to obtain assistance, so be prepared to be patient and diligent!

Some of the more common schemes are described below. There are a range of specific schemes for an agricultural based busienss, which we do not consider here.

12.1. Assistance to Unemployed

There are two main national schemes that offer financial to assistance to the unemployed and social security claimants.

They have the acronyms ACCRE and EDEN.

12.1.1. ACCRE

Accre stands for l’aide aux demandeurs d’’emploi créant ou reprenant une enterprise.

The scheme grants exoneration from some social security contributions to a business start-up for up to two years.

You will continue to be obliged to pay the social welfare levy CSG/CRDS at the rate of 8%, the invalidity/death contribution, as well as payments into the complementary pension scheme.

Eligible persons are:

• Registered unemployed, and in receipt of unemployment benefit, or about to become registered unemployed;
• Registered unemployed, but not in receipt of unemployment benefit, provided you have been registered unemployed for at least six months during the previous 18 months with ANPE, the government employment agency;
• An employee from a business in bankruptcy or liquidation who decides to start own business;
• Recipients of certain social security benefits, e.g. RMI, API
;
• Young people under 30 years eligible for preferential employment contracts.

The exemption in the first year is subject to an upper net income limit of €18,062 for 2007. This means that you will pay normal social security contributions on profits above this figure.

In order to benefit from the assistance in the second year, your business must be a micro-entreprise and with net annual income of less than €15,051 (2007), i.e. your turnover less your fixed allowance.

Exemption from social security contributions is then continued on the same basis as the first year up to net annual income of €5290, and at the rate of 50% from €5290 to €15,051.

If you do not make application at this time, you must do so within 45 days of business registration, or lose your entitlement to apply for assistance under the scheme.

You can also view and download the Application Form you need to complete. Although the application form does look formidable, the expectations of those who will consider it are not severe.

The same assistance is available to an employed person who wishes to set up their own business.

These applicants are called salarié-créateur and they can also be granted unpaid leave to do so, as well as an entitlement to 12 months exoneration from most social security contributions.

The employee must have been with their company for two years and must have worked a minimum of 910 hours in the proceeding 12 months.

You must also continue to work at least for 412 hours with your existing employer during the first 12 months of the new business.

12.1.2. EDEN

EDEN stands for l’Encouragement au Développement d’Entreprises Nouvelles.

The scheme offers a small interest free loan of circa €6000 over five years to eligible persons who decide to start up or take over an existing business. The loan increases to circa €9000 for multiple owners.

There are no rules on the type or size of business.

The facility is available to young persons under 30, unemployed persons over 50, those in receipt of social security benefits (RMI, AI, or ASS) and existing employees in a company in bankruptcy or liquidation.

The loan is normally only available on condition that a complementary loan of at least half the amount being sought is secured from a normal credit institution. You may also be required to attend a period of professional training as a condition of the loan.

If you believe you may be eligible and interested you should make enquiries to the Direction Départementale du Travail de l’Emploi et la Formation Professionnelle (DDTEFP) in your Préfecture.