Doing Business in France Ⅲ

By Lex Mundi From Gide Loyrette Nouel | Jun 01 2007
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Information relating to available incentive programs can be obtained from the department for Territory/Regional planning (Délégation à l’Aménagement du Territoire et à l’Action Régionale –DATAR). Created in 1946, the DATAR is a governmental agency, which plays a role in the coordination of such programs.

In accordance with European law, investment and job creation aids to large corporations are legal as long as they promote the settling and development of Companies in priority development areas, where more assistance schemes are offered and allowable assistance rates are more attractive.

Aside from hiring subsidies, which are automatically allocated to Companies and employee training aids, subsidies for productive investment and job creation are limited according to the geographic location of the project and the size of the beneficiary Company:

In priority development areas, they represent 11.5% to 23% of the amount invested (land, buildings, productive equipment) for large corporations and 21.5% to 33% for small and medium size Companies.

In the rest of the country, only small and medium size Companies can benefit from investment and job creation subsidies. The maximum amount allowed is 7.5% of the investment for medium size companies (50 to 249 employees) and 15% for small Companies (less than 50 employees).

The major aids available are:

The Prime d’aménagement du territoire (PAT), a development grant for which the DATAR is responsible throughout France;
Subsidies for business premises granted by local authorities and designed to reduce leasing installments;
The European Regional Development Fund (FEDER);
Temporary exemptions (see below);
The small and medium size industry development fund.
Besides, Companies may benefit from direct subsidies or exemptions from social security charges to hire certain categories of staff, including unemployed youth or long-term job seekers.

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