The PACTE law, an encouraging reform for the future of crowdfunding

On April 11, 2019, the PACTE* law (law for the growth and transformation of companies) was adopted. The objective of this law is to allow (small or large) French companies to develop, aiming to encourage savers to finance the real economy. Participative financing was also at the heart of this reform, with modifications in its favor, notably thanks to the work of the professional association Financement Participatif France (FPF) in collaboration with Bercy. These discussions have led to a stronger recognition of the crowdfunding market.

Here are the main measures:

  • As of May 24, 2019, the Plan d'Epargne en Actions (PEA) and PEA-PME are expanding to include fixed-rate bonds, minibonds and participatory securities. This will allow investors to hold, via their PEA and PEA-PME, participatory finance securities, but also to benefit from a tax exemption on dividends and capital gains. Taxation will be limited to social security contributions (17.2%), the sine qua non being that no withdrawals are made for 5 years. For example, before this expansion of the PEA-PME, for a real estate investment of €10,000 at 10% interest per year, the investor was paying a " flat-tax " of 30% on the interest received. He therefore received €7,000 net. With the eligibility of equity securities through the PEA-PME, for the same investment, the gain will be €8,280 net.

  • An improvement of the PEA and PEA-PME: the ceiling of the PEA-PME increases from €75,000 to €225,000 and that of the classic PEA is maintained at €150,000. However, for investors holding both, the overall ceiling is set at €225,000. Moreover, the PEA and PEA-PME ceilings will be cumulative, in order to transfer funds from the PEA to the PEA-PME. However, the reverse will not be possible.

  • 8 million for fundraising in shares, bonds and minibonds. This measure makes it possible to raise funds for larger companies, with a stronger financial situation and therefore with better risk control.

  • Better investor protection measures :
    • By strengthening the powers of the AMF to block fraudulent sites.
    • Lending platforms will have to show the default rate on the cumulative number of projects in progress, as well as the default rate on projects funded in the last 12 months.

The PACTE law thus favors the development of crowdfunding in France and the future seems to be promising for our sector.


Eser Kustal - Investor Relations at Raizers

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