Legislation
On 5th July 2018, the Chamber of Deputies approved the law which renews and reforms the state aid regime for small and medium sized enterprises (SME). It introduces new ways to support SMEs, whether they are starting-up, growing or are mature businesses seeking to reposition themselves. Funding for this programme will be 89 million euros over the next five years, an increase of 27% on the previous five years period.
Measures which have not changed:
- Investment aid : eligible investment in tangible and intangible assets, under certain conditions and up to a maximum of 20% for small enterprises and 10% for medium-sized enterprises
- Support for consulting services for SMEs : up to 50% of fees for external consultants can be funded under certain conditions
- Help for SMEs participating in trade fairs : aids of up to 50% for the rental, creation, and management of an SME’s stand at a trade fair or exhibition
- Aiding cooperation with other organisations : up to 50% of the cost of cooperation projects in Europe, including related organisational, consulting, and other support services
New aid measures introduced:
- Aid for start-ups: applicable to privately-owned businesses that are less than five years old which have not taken over pre-existing business activity, have not yet distributed profits, and are not the result of a merger. These firms can receive subsides and loans with advantageous rates, guarantees and conditions.
- Natural disaster compensation: compensation for losses caused directly by earthquakes, subsidence, flooding, very high winds, and wildfires, if they have been recognised as a natural disaster by the government. Assistance can reach 100% in certain cases, following an evaluation by an independent expert. This aid cannot be cumulated with insurance payments.
- Risk financing aid: granted under certain conditions to financial intermediaries which offer guarantees (for example, the Chamber of Commerce’s Mutualité de Cautionnement body).
Another new aspect of the law is that a more diverse range of aid can be offered: capital subsides, repayable advances, interest subsidies, guarantees, loans, equity and quasi-equity contributions.
There is also a reform of how requests are made. Written requests for aid must be made before the work begins, otherwise the application will be refused. Before granting support, the Ministry of the Economy could check that the enterprise has meet all its obligations regarding tax and social charges.
However, there will no longer be need for the consultative commission to issue an opinion for aid to the value of 100,000 euros or less. This should speed up administrative procedures.
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