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As part of France ’s budget for 2024 , which was passed last hebdomad by the French governmentwithout a right to vote , France plan to make a Modern revenue enhancement relief system for angel investiture in tech startup . In many means , France is drawing inspiration from the British tech ecosystem for this alteration .
If you ’re an angel investor in the U.K. , chances are you ’re already quite familiar with the acronyms SEIS and EIS , which think of Seed Enterprise Investment Scheme and Enterprise Investment Scheme . These two taxation embossment strategy have fostered backer investments in small private company — generally tech startups — since 1994 .
In the U.K. , if you invest in an early - stage startup , your investment is eligible for a 50 % revenue enhancement break on your income revenue enhancement , with a boundary of £ 200,000 in investments per year . You may enquire , but what is an other - stage startup , after all ? Criteria change every now and then , but right now , an SEIS - compatible troupe is a British company that is less than three year old , has less than 25 employees and less than £ 350,000 in gross assets .
“ I benefitted from SEIS both as a father and an investor . SEIS funding de - risk angel investing , and allows startups to fill up their rounds much faster , ” Reedsy co - founder and CEO Emmanuel Nataf told me . “ The fact that any tax payer — and not just the wealthiest — can do good from the revenue enhancement interruption makes it a tangible enabler for the tech ecosystem in the U.K. ”
As for the Enterprise Investment Scheme and as the name suggests , more companies are eligible . But , in that case , individual investors only get a 30 % tax respite on their income tax . EIS - compatible companies are less than seven years honest-to-goodness , have less than 250 employees — and their sodding asset should remain below £ 15 million .
Interestingly , recondite technical school companies have a piece more allowance as they are still eligible if they have been around for up to 10 yr . individual can invest as much as £ 1 million per twelvemonth to get the tax credit ( or £ 2 million for deep technical school investments ) .
And it ’s been working incredible well . In 2021 , according toa theme from Paul Midy , a extremity of the National Assembly representing Emmanuel Macron ’s party that has been working on that topic , a total of £ 175 million and £ 1.6 billion have been invested in individual companies via the SEIS and EIS severally ( that ’s $ 213 million and $ 1.95 billion at today ’s exchange pace , severally ) .
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“ Angel investors taking vantage of the scheme also bring in meaning support to the founders , which might be hard to get from institutional fund , ” Nataf tot up .
Importing the SEIS and EIS schemes
Now that you interpret how it works , France is basically copying these schemes with a dissimilar set of criterion . Starting in 2024 , soul who invest in party with the JEI label ( jeunes entreprises innovantes ) will get a 30 % income tax break .
Starting in 2025 , there will be two new family , JEIC and JEIR — C forcroissanceand R forrupture . These acronyms are a bit jargony , but the bottom line is that investors in deep tech startups will get a 50 % taxation break for investing up to € 100,000 per class . Investors in other startups will get a 30 % taxation break for investments up to € 150,000 per yr .
“ This scheme for so - call ‘ young ship’s company ’ is plan to help M of untried innovative companies to engage , to upgrade capital , to improve cash menses and to gain access to public contracts , ” Paul Midysaidin a video on X ( formerly Twitter ) . “ It should enable half a billion euro in additional fundraising every class for our inauguration , specifically at the early stage . ”
It ’s go to take a bit of sentence before the French technical school ecosystem can find the effects of this regulatory change . But it ’s a welcome alteration as France — like many tech ecosystems around the public — is experiencinga slowdown in traditional VC investment .
After year of explosive growth , the Gallic technical school ecosystem is at a turning point
