From an affective point of view, it is always very rewarding and rewarding to see before his eyes the implementation of a project that we have seen so far only on spreadsheet, graph and slides. This is what gives concrete meaning to his project. The best of Angel Investment as per your steps now.
The tax advantage of investing in an SME
Investing in a business can help you get income tax cuts. This can be achieved by investing in an unlisted company when it is created or when a capital increase is made. The tax reduction is obviously obtained under conditions:
- The company must not carry on an activity limited to the management of its own movable or immovable assets,
- Duration of holding of the units: at least 5 years. In addition, any redemption of units cannot take place before the end of the seventh year of detention,
- The company must have been operating in its market for less than 7 years.
- The company must have at least 2 employees 1 year after the subscription of the shares (1 employee for a craft activity), without any particular requirement of a work contract,
- For companies created from 2016, the investment in the company is a follow-up investment. In addition, investment in one’s own SME is excluded from the scope.
Whether you want to invest in your local or national economy, benefit from tax loopholes, and invest in a company is an exercise that requires significant preparatory work upstream, but also important monitoring work during the lifetime of its investment. Realizing an investment in the real economy requires human investment even at the very least in addition to the financier. In short: we are actors in our own profitability.
Small caps often perform better than large companies. On the other hand, smaller companies are more exposed to default and this type of operation is to be reserved for experienced investors. It is possible to invest in a company without going through the stock market. It can even be a good deal financially, in case of success of the chosen company, and in the tax plan, since such an approach allows benefiting from a tax reduction.
You can become a shareholder or associate of one or more SMEs by participating in the constitution or an increase of its capital, or by bringing money, or goods necessary for its activity excluding real estate and securities. This kind of investment can be difficult to do alone because it involves finding a company that accepts outside investors and a good estimate of the company to invest in.
A powerful asset
Through its performance, governance and transparency, capital investment in unlisted companies is now recognized as a full-fledged asset class, along with money market investments, bonds, real estate and listed shares, able to meet the expectations of institutional investors and the long-term savings needs of the people.
This asset class allows:
- Profitability above most other asset classes.
- To diversify the portfolios, by betting on companies of various sectors, of various geographical locations and at different economic stages priming, development, transmission, turnaround.
- Investing directly also allows for direct contact with entrepreneurs and practical participation in national and regional economic development.
Unlike the purchase of a stock market share, investing in an unlisted company requires the precise knowledge of its business model, its different objectives and its structure.