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Entrepreneurs in France: budget bill, rate cuts, transfer conditions… an overview of the challenges ahead in 2025
Pascale Seivy
Commercial Director Lombard Odier France
Valérie Montel
Wealth planning expert
2024 is coming to an end, concluding a period of mixed fortunes for French entrepreneurs. While new business creation remains strong, with over a million new firms established every year since 2016 according to INSEE, the economic, fiscal and political context has added major obstacles to their development over the past few months. The climate of uncertainty and international tension has turned opportunities into challenges, requiring entrepreneurs to navigate a course through an ever more complex environment.
Global slowdown and political instability put pressure on French entrepreneurs
Following the post-Covid upturn, with full order books and a recovery in margins, the French entrepreneurial landscape is showing signs of running out of steam. The worldwide slowdown, driven by China’s difficulties in effecting its economic transition and protectionism on the part of the United States, has directly impacted Europe. At the domestic level, political instability – symbolised by the dissolution of the National Assembly and the collapse of the French government– has put a brake on strategic transactions such as capital raising and mergers and acquisitions.
Entrepreneurs are having to deal with demanding economic conditions and a fiscal framework in the throes of transformation
There are some encouraging prospects, however. Cuts in key interest rates in the developed economies could trigger renewed investment and encourage recovery in the medium term. But for now, entrepreneurs are having to deal with demanding economic conditions and a fiscal framework in the throes of transformation.
The current political situation and budget crisis are creating persistent uncertainty for businesses and entrepreneurs.
The 2025 Finance Act proposal, drafted by Barnier’s government, aimed to increase the tax burden on large companies, with the introduction of a one-off corporation tax and an 8% tax on capital reductions.
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Following François Bayrou’s appointment as Prime Minister on 13 December 2024, there is keen interest in the fiscal measures that are likely to be adopted, which presents a challenge for strategic decision-making.
Entrepreneurs facing multiple challenges
The climate remains particularly difficult for start-ups and mature companies. The former have to deal with investors who have become very selective, requiring reasonable valuations and solid prospects. For the most part, firms with viable economic models are managing to raise capital. More established companies are faced with the ending of state-guaranteed loans [PGEs],1 higher interest rates than they became accustomed to during the upturn, and a worldwide slowdown that limits their room for manoeuvre. As a result, the number of restructurings and bankruptcies is increasing, while strategic decisions are often being replaced by defensive choices.
Despite these obstacles, France remains a land of innovation and entrepreneurial dynamism. Opportunities do exist, particularly for those who are able to anticipate events ahead of time, and choose good partners to make their projects secure and optimise their wealth strategy.
Anticipating, adapting and choosing good partners: the keys to success in 2025
With 2025 looking like it will be a pivotal year, anticipation and structuring remain the essential levers for turning challenges into opportunities. This is particularly true for entrepreneurs in the transfer phase. Pre-transfer gifts, holding company contributions and life assurance are all strategic tools allowing tax and wealth management to be optimised. However, these tools require rigorous preparation and personalised guidance to maximise the benefits.
Pre-transfer donations, holding company contributions and life assurance are all strategic tools allowing tax and wealth management to be optimised
Our experience with entrepreneurs shows that a proactive approach encompassing wealth assessment, planning and training of future generations is essential to ensuring a smooth transition from business to financial wealth.
Focus: optimising the transfer of a company
Upstream preparation of a company transfer is essential in order to maximise the potential benefits of this major transaction in the life of an entrepreneur, and thus anticipate the tax implications. There are two crucial elements:
1. Strategic tools
Pre-transfer donations: to optimise taxation and transmission of wealth.
Holding company contributions: to structure investment projects.
Life assurance: to secure the proceeds of the sale and optimise succession.
2. Personalised guidance
In-depth wealth assessment.
Training future generations and family governance.
A successful transfer requires guidance from the earliest stages, to ensure a smooth transition from business to financial wealth in line with each entrepreneur’s personal situation and life plans.
Supporting the resilience of entrepreneurs and building future projects
In 2024, French entrepreneurs showed their resilience in the face of a complex and demanding environment. 2025, albeit replete with uncertainties, offers opportunities to those able to anticipate developments and adapt to them. Our role is to stand side-by-side with entrepreneurs, offering them tailor-made advice and solutions to navigate through this new reality, preserving their wealth and making good use of emerging opportunities.
Whether you are a business creator, a managing entrepreneur or are about to transfer your business, we can help you structure and preserve your private wealth. Thanks to our teams of bankers and wealth engineers, we advise and guide several hundred entrepreneurs and their families, in France and abroad.
Every business owner is on a unique journey and has specific needs: this is why we approach your situation in a systematic and individualised manner.
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1The PGE (Prêt Garanti par l'État, i.e. state guaranteed loan) is an instrument introduced in 2020 to support the cash flow of companies in difficulty by offering them bank loans 90% guaranteed by the French state. No more PGEs have been issued since June 2022, but they are still due for repayment by many companies, presenting a major challenge in the current economic context.
important information
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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