Grants and Subsidies for Business Start-ups : The Complete Guide

II. Aid and grants

What are the different types of assistance and subsidies available to entrepreneurs ?

There are many different types of grants available to entrepreneurs. However, these grants are not suitable for everyone and are subject to specific criteria. To find out which ones you may be eligible for, you need to research each one individually. You can choose the grant that best suits your situation based on your circumstances and the business you are looking to start. 

It is important to note that assistance with starting a business is not necessarily limited to financial support. Subsidies can take other forms, such as the provision of material resources or tax relief. 

Financial support

Let's start with the most well-known type of subsidy : funding for business start-ups. The goal of financial support is to help you by providing you with direct cash assistance. Financial support falls into several categories, which we will explore below.

Maintaining unemployment benefits

First, you may be eligible for financial assistance by maintaining your eligibility for unemployment benefits. This is despite your professional activity in your new company. 

To benefit from this support, you can choose between two options. The first is to receive benefits in the form of ARE. This means that benefits will be paid monthly. In this case, benefits are maintained in proportion to the income you receive through your business. If you earn nothing, you will receive the full amount.

In addition to ARE, you can choose to receive ARCE. This option allows you to receive your benefits in the form of a lump sum. A larger amount is therefore paid to you in a single installment. This amounts to 45% of your remaining unemployment benefits. It is paid in two installments, the first of which is paid to you when you start your business. The second installment is paid six months later. 

Maintaining RSA benefits

Active solidarity income may also be affected by business start-up subsidies. However, in order to be eligible, certain requirements must be met. For example, you must have a limited income. This must be less than 1.4 times the minimum wage. During the first quarter following the creation of the business, the full amount is awarded. From the fourth month onwards, it will be paid in proportion to your turnover and will be reviewed every quarter. 

The amount of RSA depends on each individual's situation and is more difficult to calculate. To find out how much you are entitled to, it is best to contact the Family Allowance Fund (CAF). 

The NACRE program

NACRE is the acronym for the new support program for business creation or takeover. It is therefore specifically dedicated to this purpose. NACRE takes place in three stages. The first is assistance with putting together the application. This involves drawing up a plan and a study for the future project. It is therefore a preparatory stage. It should not take more than four months for new entrepreneurs and a maximum of three months for those taking over an existing business. 

Step two : financial structuring assistance. Based on the technical study and needs analysis, you can apply for appropriate financing. Under certain conditions, this financing may be obtained with a zero-interest loan. The maximum timeframe for this phase is the same as for the previous one.  

Finally, the third and final phase of the NACRE program consists of monitoring the start-up and development of the business. As its name suggests, this support is designed to ensure the smooth launch and progress of the business. Note that the first two phases can be carried out at the same time. 

Although advantageous, the NACRE program is only available under certain conditions. It would take too long to list them all here, but you should know that to be eligible, you must meet one of the following criteria : 

• Aged 18 to 25 
• Being a job seeker, whether receiving benefits or not, and of any age
• Being a recipient of minimum social benefits, such as the RSA (Revenu de Solidarité Active, or Active Solidarity Income) for example
• Be under 30 years of age and not receiving unemployment benefits
• Be a person under 30 years of age who is recognized as having a disability
• Benefit from the free choice of activity supplement
• Taking over a struggling business as an employee
• Starting a business in a ZAS (Sensitive Urban Area).

Material aid

In addition to direct financial support, assistance with starting a business can also take the form of material support. As a business founder, you are not only likely to need capital. You also need to acquire skills and develop in an environment conducive to growth. This is what material support aims to provide. 

Business incubators

What is a business incubator ? Quite simply, it is a space that houses the premises of several companies. In addition to benefiting from the premises, you are surrounded by other companies that, like you, aspire to progress. Immersed in a professional environment, you will have at your disposal the support you need to run your business successfully. You can even have access to training in entrepreneurship! 

Be careful not to confuse business incubators with coworking spaces. The difference is simple: unlike incubators, coworking spaces do not provide any support or training. They simply provide you with the premises and shared services you may need.

– Why get help with your search for financing?

–Competitions, grants, and calls for projects for the year 2022

Business start-up training

Starting a new business by creating your own company is ambitious, but you should know that it's no walk in the park. On the contrary, the road to success is fraught with pitfalls and obstacles. Therefore, to put the odds in your favor, you need to hone your skills as much as possible. 

This involves training in business management, among other things. Material assistance with training in business creation is therefore invaluable from this point of view. To benefit from this, we recommend that you contact your local CFE (Business Training Center), depending on where you live. 

Please note that although national institutions are most often offered, you are not obliged to enroll in them. Private training courses are also available. 

 CAPE

The business project support contract also provides tangible assistance with setting up a business. This involves organizing an in-depth study of the project you wish to carry out. It also involves providing tangible support to new entrepreneurs in managing their business during the early stages of the company. This means you benefit from invaluable advice on preparing your project, down to the smallest detail and in every respect. In addition, you also receive support when launching your business, to ensure you don't make any mistakes. 

The company responsible for supporting you shares with you a portion of responsibility in your company’s affairs. The degree of responsibility is assessed in accordance with the terms of your contract. 

In return for this business creation grant, you must commit to completing an appropriate training program. The duration of this program is estimated at a maximum of 12 months and may be renewed twice.

The reduction of tax burdens

You may not know it yet, but fiscal charges weigh heavily on a company’s business operations. The difference between net and gross revenue can therefore be enormous. Benefiting from a reduction in fiscal charges can, in this regard, be considered a genuine form of assistance. 

France’s fiscal policy grants numerous advantages to those embarking on business creation. Discover these forms of assistance without further delay. 

Innovation tax credit assistance

As its name suggests, this tax credit is intended for companies operating in sectors considered to be innovative. It applies exclusively to small and medium-sized enterprises (SMEs). This status is granted to companies with fewer than 250 employees (at least 10) and an annual turnover of less than 50 million euros (minimum 2 million). A balance sheet total of less than 43 million euros also qualifies.

Check out our article on the financing of innovation

ChatGPT a dit : You must therefore proceed with the creation or design of new products or services. The Official Bulletin of Public Finances can advise you and assess the expenses required for this purpose. 

Tax exemption in certain areas

ChatGPT a dit : If you carry out your entrepreneurial activities in certain so-called priority areas, a tax exemption is possible. These areas are divided into two categories. On the one hand, there are urban free zones, or ZFUs. These refer to territories or neighborhoods considered sensitive, where it is urgent to revive economic activity. 

However, only companies established in these areas before December 31, 2020, are eligible. Consequently, you must take over an existing business to qualify for these exemptions. 

The other category consists of rural revitalization zones, abbreviated as ZRR. These zones concern rural municipalities recognized as being economically fragile. If you set up your business in a ZRR, you benefit from a tax exemption as well as an exemption from the CET. The latter, the territorial economic contribution, is a local tax.

The benefits decrease as the years go by. For the first five years of operation in a ZRR, the exemption is total. It is reduced to 75% in the sixth year, then to 50% in the seventh, and finally to 25% in the eighth year. 

As with these rates, a ceiling is set at 200,000 euros over three years. 

CIR

The Research Tax Credit also applies to companies working in the field of innovation. If you plan to make expenditures in research and development, you may be eligible for it. Beyond that, the design of prototypes and products is also covered by this program. Innovation in the service sector, however, is not included. 

The Young Innovative Company (JEI) status

The acronym JEI stands for Young Innovative Company. For your business to obtain this status, it must meet a number of conditions and criteria. These conditions are numerous and are grouped in the list below :

• Your company must be an SME
• It must be less than 8 years old. In the context of business creation, this criterion is automatically met. 
• It must be independent. This means that at least 50% of the capital must be held by natural persons or other Young Innovative Companies (JEIs). Public-interest associations with a scientific purpose are also eligible, as well as research and educational institutions or investment companies.
• The creation of the company must not be carried out as part of an extension, restructuring, or takeover of existing activities.
• Finally, the company must incur expenses in the field of research and development. These expenses must amount to at least 15% of the deductible expenses for that fiscal year.

Provided that you meet all these conditions, you are entitled to a full tax exemption for the first fiscal year. For the second year, the exemption is reduced to 50%. You are also exempt from the CET and property tax for a total duration of 7 years. 

Assistance for business creation or takeover

The ARCE scheme allows its beneficiaries to be exempt from social charges weighing on their new business. This assistance is primarily intended for job seekers between the ages of 18 and 25, but many other categories of individuals may also be eligible. 

The conditions for admission to this program are numerous and specific, so it is advisable to inquire with an institution such as URSSAF. This will allow you to determine whether you are eligible.

Exemption from the CFE

We will conclude the list of material business creation subsidies with the exemption from the CFE. This refers to the cotisation foncière des entreprises (business property tax), a levy based on the rental value of properties subject to property tax. The CFE therefore applies to all premises and land owned by your company. 

As a business founder, you may benefit from an exemption from this tax, which is one of the components of the CET. The exemption is total during the first year of your activities and is reduced to 50% the following year.

Sector-specific subsidies

Another method of business creation support is the sector-specific subsidy. This consists of providing assistance to new entrepreneurs according to the sector in which they operate. The fields that may be eligible for such aid are numerous and cannot all be listed exhaustively. 

We nevertheless invite you to discover some of the most well-known and widely used ones. 

Press publishers

ChatGPT a dit : If you are entering the print media industry, you can access several business creation subsidies, such as delivery assistance. You must, of course, be registered with the Joint Commission for Publications and Press Agencies (CPPAP). From there, you may obtain subsidies in the form of financing or tax reductions/exemptions, such as the CFE. 

In addition, the print media sector (including digital media) benefits from a reduced VAT rate, set at 2.10%.

Book publishers

Close to the press sector is that of publishing houses. If this is your project, you may benefit from special programs to help you carry it out. Translators and magazine publishers are also included in this field of activity. 

Aid in the publishing sector generally consists of funding for the publication of works. It is therefore a direct and straightforward subsidy that does not require extensive studies or complex calculations. Note that these subsidies may be granted to both print and digital publishers. 

To benefit from it, you simply need to send a request letter to the appropriate institution, namely the DRAC.

The live performance sector

The live performance industry also benefits from sector-specific subsidies. But one question arises: what exactly is a live performance? While one may easily grasp the general idea, it is difficult to know its exact scope. How can you determine whether your activity falls under the live performance category? You must meet the four conditions listed below : 

• You give performances that take place in front of an audience, whether access is paid or free. It should be noted that the term “audience” refers to any group of people who are not part of the company’s staff.
• The physical presence of performing artists is also required. This may include actors, dancers, musicians, circus performers, comedians, and others. 
• These artists must be paid.
• These artists must present a work of the mind, meaning a work of art that pertains to them. For example, a musician performing at a political rally is not giving a live performance. 

ChatGPT a dit : Sector-specific aid in the field of live performance generally consists of setting up the stage and organizing the event. It may also involve extending a show scheduled on a given date. More rarely, one may benefit from a tax credit. 

Environmental preservation

If your company’s activity aims to preserve the environment and contributes to the ecological transition, you may be eligible for sector-specific aid. Thanks to the France Relance plan, launched in 2020, such companies can receive sectoral subsidies. As long as your project demonstrates energy efficiency, you can obtain funding. This funding is calculated based on the cost required to acquire the necessary equipment, with rates ranging from 10% to 50% and a cap of 3 million euros. 

III. Competent Institutions

To access and make use of your right to business creation aid or funding, you must contact a government institution. The appropriate institution varies depending on the type of aid you wish to receive and the field of activity in which you operate. 

IV. Combination of Aids

As you may have noticed, there are several situations in which one may be eligible for two or more subsidies at the same time. So, is it possible to combine these aids? In truth, it depends on the case. For example, it is obviously not possible to combine ARE and ARCE. However, in the case of other programs, it is entirely possible particularly in the fields of innovation and research and development. 

When you wish to know whether it is possible to combine certain types of aid, you simply need to inquire with the institution responsible for these matters.

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