It would be a breath of fresh air, for a sector taken by the throat for a few months. While financing in French start-ups is running out of steam, after a euphoric start to the year 2022, a majority deputy wants to give back room for maneuver to young French shoots. It relies, among other things, on the savings of the French to achieve this. “The savings of the French represent 5,000 billion euros, but it could be better marked”. This is, in essence, the message delivered by Paul Midy, MP for Essonne. This 40-year-old, Polytechnicien, knows the ecosystem of start-ups well, having frequented it closely. First at Jumia, an African e-commerce platform, then at the meal delivery start-up, Frichti.
In short, an ideal candidate for the six-month mission entrusted to him last January by the government, namely to find additional investment avenues to support start-ups, innovative and/or growing SMEs. The first of the levers he is considering is fiscal. During the campaign, Emmanuel Macron was quite enthusiastic about the idea of replicating a mechanism that has proven itself across the Channel. The “SEIS/EIS”, created on the spot 30 years ago, allows the British saver to benefit from tax reductions when he invests in start-ups. “This device makes it possible to raise 2 billion euros per year, to finance 5,000 start-ups and to create 25,000 jobs per year”, figure Paul Midy. A device of this order, the IR-PME, certainly already exists in France, but the deputy finds it ill-suited because it is subject to the overall ceiling of tax loopholes, of 10,000 euros per household.
In detail, his proposal would first consist of a vast grooming of the mechanisms dedicated to “Young Companies”. The idea would be to create three categories – young companies, young innovation and growth companies (JEIC) or young innovative and disruptive companies (JEIR) -, each benefiting from dedicated mechanisms. It is obviously for the last two that the incentives will be the most important. This new system would allow, for example, exemptions from employers’ charges on hiring for a period of 8 years for JEICs, 12 years for JEIRs, cash assistance thanks to the research tax credit, but also eligibility for privileged access to public procurement (via the mechanism known as innovative purchases, when they do not exceed the amount of 100,000 euros).
Individuals, by investing in these innovative start-ups and SMEs, could benefit from tax reductions ranging from 30% (for the JEIC) to 50% (for the JEIR) on the amount of their investment. The whole, by opening the possibility of investing “big tickets”, therefore above the ceiling of tax loopholes of 10,000 euros. By 2027, the idea is to help between 10,000 and 20,000 of these companies. “The scheme will raise 1 billion euros per year. By coupling with exemptions from employers’ contributions, we estimate that we can achieve the creation of 100,000 jobs by 2027. This is a cautious projection, ”explains the deputy. Several points remain under discussion, such as the criteria for claiming the title of JEIC or JEIR, or the organization that will be responsible for affixing the label.
The second stage of the rocket, it consists in better mobilizing the 5,000 billion euros of savings of the French, who sleep for the most part on regulated products such as life insurance or savings accounts. “It finances government bonds or sectors that create little employment for two-thirds, and for one-third of listed companies. But there’s nothing about start-ups,” regrets Paul Midy. Through a series of legal measures, the MP wishes to redirect part of this savings towards investment capital and innovative companies engaged in reindustrialization or energy transition. It is in particular a question of directing more the funds lodged in the life insurance or the retirement savings plans. Here again, it is a billion euros that could be rerouted per year, i.e. the creation of 50,000 jobs by 2027, figures the deputy and his teams.
Naturally, French Tech would welcome this tax and regulatory package aimed at bringing it 2 billion euros per year. It prevents. Any new exemption or tax reduction could raise eyebrows on the side of Bercy, in the budgetary context more than ever constrained. The deputy, he wants to be confident, judging that his device will generate tax revenue for the State at the end of the race. It will also be necessary to find a majority in the Assembly. But here again, Paul Midy says he is confident in the ability to find alliances, especially on the LR side.