Workers in a company

PACTE, the Action Plan for Business Growth and Transformation

The Plan d'Action pour la Croissance et la Transformation des Entreprises (PACTE – Action Plan for Business Growth and Transformation) is a new step in France’s economic transformation. Its aim is clear: liberated companies that are better funded, more innovative and fairer.
 
WHAT DOES THIS INVOLVE?

Liberated companies

From creation to transfer, companies are overburdened with obligations that complicate every step of their development. The PACTE will remove such obstacles, simplifying business creation and easing obligations concerning workforce thresholds.

As a result, the Action Plan will enable SMEs to grow, conquer external markets and create jobs.

Better funded, more innovative companies

Companies currently lack the equity capital essential to their development. The PACTE will facilitate access to diversified funding (public listing, investment capital, crowdfunding and ICO). It will orientate French citizens’ savings towards companies’ equity capital to fund future growth and innovation.

The Action Plan will provide companies with the resources they need in order to innovate. It will enable researchers to set up companies with the minimum of difficulty and simplify patent filing procedures for SMEs.

Fairer companies

Companies do more than simply seek to make a profit. The PACTE will modify the Civil Code in order to assert their social and environmental role and provide them with a true raison d'être.

Companies should be places for creation and sharing of value. Employees’ work will be better rewarded thanks to abolition of the corporate contribution to incentive schemes for companies with fewer than 250 employees and to profit-sharing for companies with fewer than 50 employees.


The PACTE in 10 measures


1. Simplifying thresholds applicable to SMEs

Obligations connected with thresholds will be significantly reduced and simplified in order to create a new legal environment more favourable to SME growth.

2. Abolishing corporate contributions to employee incentive schemes and profit-sharing

Employee incentive agreements will be facilitated for companies with fewer than 250 employees, with abolition of the corporate contribution.

3. Rethinking the role companies play in society

The Civil and Commercial Codes will be modified in order to take greater consideration of social and environmental issues in companies’ strategies and activities.

4. Setting up a company 100% online at less cost

Entrepreneurs’ lives will be simplified thanks to creation of a single online platform for business formalities.

5. Facilitating entrepreneurs’ recovery

Deadlines for and costs of judicial liquidation (compulsory winding-up) procedures will be reduced and their predictability improved.

6. Bringing public research closer to the business world

Pathways for researchers who wish to set up or work with a company will be simplified with a view to revitalising links between public research and the private sector.

7. Facilitating business transfers

The Dutreil Pact will be updated to encompass transfers free of charge. Business transfers to employees and funding of takeovers of small companies will be facilitated.

8. Simplifying and ensuring portability of pension savings products

All citizens will be able to maintain and add to their savings products throughout their professional lives, and withdrawals of lump-sums will be facilitated.

9. Supporting SMEs’ export initiatives

The export support model will be transformed through creation of single regional windows, so that international markets will become natural outlets for SMEs.

10. Protecting strategic companies

The procedure for prior authorisation of foreign investment in France will be strengthened and expanded in order to better protect strategic sectors.

The Action Plan for Business Growth and Transformation (PACTE) contains a great deal more than the above 10 measures. It includes a bill with 70 articles along with regulatory and non-regulatory mechanisms, and tax measures that will be incorporated into the 2019 Finance bill.
 


WHY?

“In my opinion, there are three key factors in economic transformation. The first is adaptability, the flexibility provided to companies and employees by social dialogue. The second is training, apprenticeship and unemployment insurance. I should now like to see far-reaching reform of the philosophy behind business practices.” – Emmanuel Macron, President of the Republic, 15 October 2017.

A decisive new step in France’s economic transformation, the PACTE is based on two observations:

  • Our companies struggle to grow at the same pace as their counterparts in other European countries: there are only around 5,800 intermediate-sized enterprises (ISEs) in France, whereas there are 12,500 in Germany. Yet these are the companies that create most jobs, which have the resources required to innovate, digitise, and set off to conquer new markets.
     
  • Our idea of the role that companies play in society no longer corresponds to reality. Companies are often regarded as only being concerned with making profits, with their interests necessarily opposed to those of their employees.

In such a context, the PACTE has two ambitions:

  • Enabling companies to grow and create more jobs, by removing all the obstacles that complicate their lives and providing them with the resources required to innovate for success.
     
  • Putting companies back in the centre of society by amending the Civil Code and involving employees more closely in their governance and results through development of incentive and profit-sharing schemes. In the words of the Minister of Economy and Finance, Bruno Le Maire, “It is fair that, when a company is successful, the first to benefit are its employees”.

According to a Treasury study, the Plan could lead to a 1-point increase in GDP over the long term, including 0.4 points by 2025.

The PACTE is the result of dialogue and co-construction. 626 companies and institutions were consulted in order to collect proposals from stakeholders in the field. On the basis of such consultations, the Government submitted 31 proposals to France’s citizens, each of whom could, if they so wished, express their view and put forward fresh proposals by taking part in the online public consultation. It was this “mobilisation of the collective intelligence” that led to the emergence of “concrete measures that will have a direct impact” on the life of companies, as Secretary of State Delphine Gény-Stephann emphasised.

The Plan also aims to redefine the business world’s and the State’s respective places in the economy. The State will act as an investor rather than a manager, disposing of shareholdings to invest in sectors of the future. In parallel, it will step up its systems for monitoring strategic companies.
 


ATION TAKEN

September 2018 onwards: examination of the bill in Parliament.

18 June 2018: presentation of the PACTE bill to the Council of Ministers.

4 May 2018: the Minister of Economy and Finance, Bruno Le Maire, presents a number of measures to be included in the PACTE.

February to April 2018: consultations with 38 union organisations and professional federations.

5 February 2018: end of the online public consultation, which collected some 63,000 votes.

15 January 2018: launch of the online public consultation on 31 PACTE proposals.

21 December 2017: public presentation of work carried out by workgroups.

10 December 2017: close of the first consultation phase.

23 October 2017: launch of the first PACTE consultation phase, with 6 workgroups made up of parliamentarians and business leaders.

 

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