Tax Depreciation for Companies Investing in the Capital of Innovative SMEs
Tax depreciation for companies investing in the capital of innovative SMEs aims to encourages corporate venture capital investment in innovative SMEs. The beneficiaries indicated are: investor companies (mid-caps or SMEs) holding no more than 20% of the capital or voting rights of the innovative SME, as well as certain limited partnership companies; the target SMEs must be innovative, based in the EU/EEA, unlisted and trading for less than 10 years. The financial framework listed: depreciation over 5 years of corporate venture investments. Depreciation applies to sums paid in the 10 years following 3 September 2016.
Tax depreciation for companies investing in the capital of innovative SMEs: Encourages corporate venture capital investment in innovative SMEs. Eligibility depends on the applicant’s profile, location and the nature of the project. Before any commitment, check the funder’s rules and the version of the rules in force. The geographic scope indicated in the catalogue is national aid.
Funded by Ministère de l’Economie, des Finances et de la Souveraineté Industrielle, Energétique et Numérique
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Who can apply
**Beneficiaries listed.** I – “Investor” companies: any company (mid-cap or SME) that does not hold, directly or indirectly, more than 20% of the capital or voting rights of the innovative SME. Limited partnership companies (sociétés de libre partenariat) are also eligible provided that 70% of their assets consist of securities, units or shares of innovative SMEs, and that 40% of their assets also consist of securities, units or shares received in return for subscribing to the capital of innovative SMEs or for bonds of such SMEs that have been converted. Note: where companies are linked, together they must not hold, directly or indirectly, more than 20% of the capital or voting rights of the innovative SME. II – Innovative SMEs eligible as targets: SMEs within the EU definition with their head office in an EU member state or another EEA state that has signed an administrative assistance agreement with France to combat tax fraud and evasion; meeting the conditions of 1° or 2° of Article L. 214-30 I of the French Monetary and Financial Code; and not yet trading on any market, or trading for less than 10 years after their first commercial sale. Excluded: SMEs listed on a regulated market and companies in difficulty. Geographic scope: national aid. Company size: fewer than 10, 10–49, 50–249 and 250 or more employees.
Eligibility conditions
**Conditions listed.** The value of the securities, units or shares held by the company that can be depreciated must not exceed 1% of the company’s total assets. This limit is assessed at the end of the financial year in which each subscription took place, taking into account all the company’s subscriptions being depreciated. Note: where the innovative SME has not yet closed a financial year, the costs concerned must be estimated and certified by that SME’s chartered accountant or statutory auditor at the date of subscription. The expected subscriptions must be provided for in the business plan of the innovative SME. The investment company must formalise its commitment to make the required level of subscriptions within the set time by means of a declaration submitted to the tax authorities.
What the scheme covers
**Operations and costs listed.** Sums paid to subscribe in cash to the capital of innovative small or medium-sized enterprises; sums paid to subscribe to units or shares in European venture capital vehicles; sums paid to subscribe in cash to units or shares of venture capital mutual funds (FCPR), professional private equity funds or venture capital companies whose assets consist of securities, units or shares of innovative SMEs for at least 60% (see the first paragraph of Article L. 214-30 I of the French Monetary and Financial Code). Note: the fund’s or venture capital company’s assets must also consist, for at least 40%, of securities, units or shares received in return for subscriptions to the capital of innovative SMEs or for converted bonds of such SMEs (see Article L. 214-30 III). Innovative SMEs as investment targets are companies whose securities are not admitted to trading on a regulated French or foreign market.
Amount and funding terms
**Amount and funding.** Depreciation over 5 years of corporate venture investments. Depreciation applies to sums paid in the 10 years following 3 September 2016.
How to apply
1. Check that the project and the applicant meet the rules in force. 2. Ask the funder to confirm that the scheme is open and the cost basis. 3. Prepare a project note, a detailed budget, quotes and the administrative documents requested. 4. Apply through the official channel and keep the acknowledgement of receipt. 5. Do not commit costs before written confirmation of the rules on when the operation may start.
Timeline
No reliable deadline is recorded in the catalogue. Confirm the timetable and whether the scheme is open with the funder.
Key facts
- Funder
- Ministère de l’Economie, des Finances et de la Souveraineté Industrielle, Energétique et Numérique
- Type of funding
- Tax exemption
- Status
- Ongoing
- Geographic scope
- All of France
Frequently asked questions
What is the “Tax depreciation for companies investing in the capital of innovative SMEs” for?
It aims to encourages corporate venture capital investment in innovative SMEs. Check that your project matches the purpose and operations accepted by the funder.
Who can benefit?
The catalogue indicates the following beneficiaries: investor companies (mid-caps or SMEs) holding no more than 20% of the capital or voting rights of the innovative SME, as well as certain limited partnership companies; the target SMEs must be innovative, based in the EU/EEA, unlisted and trading for less than 10 years. The area mentioned is national.
How much can be obtained?
The amount listed in the catalogue is as follows: depreciation over 5 years of corporate venture investments. Depreciation applies to sums paid in the 10 years following 3 September 2016. The amount actually granted depends on the rules in force, the costs recognised as eligible, caps and other public aid combined. Have these confirmed before finalising the budget.
Which costs and steps should I plan for?
The operations mentioned are: cash subscriptions to the capital of innovative SMEs, to European venture capital vehicles, or to venture capital funds and companies whose assets consist of at least 60% of innovative SME securities. Before committing costs, check the rules, deadline, documents to provide and any rule prohibiting a start before application or decision. Prepare quotes, a detailed budget and the supporting documents requested.
Official source
No official URL is available in our data for this grant.
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