SME innovation accounts
In 2016, the French government introduced the concept of “compte PME innovation” (SME innovation account). This is a device meant to encourage innovation among small companies.
How does it work?
Normally, in France, if you generate money by buying shares and selling them at a higher price, then this money is taxed. However, thanks to this device, if investors instead use this money to support certain SMEs, they can avoid paying these taxes!
As such, it’s more advantageous for business angels to invest in such SMEs than in other companies.
Furthermore, this device created a virtuous circle for innovative SMEs, where investors can buy shares in an innovative company, sell them when they can make a profit, and reinvest that profit in other SMEs.
