French “SME innovation accounts”: Can I benefit from them?

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.

Can I benefit from it?

Unfortunately, banks are the ones who have to open these accounts for investors, and few banks actually offer them. As a result, it would be difficult to make use of this device to fund your company today.

However, this was effectively the moment when France put such a huge emphasis on innovation.
Indeed, the plethora of measures that were passed in favor of innovation since 2016 made Paris the best capital for innovation in all of Europe in 2018. Thus, SME innovative account or not, few countries are better for innovation than France!