Early stage challenge: is Sarkozy boosting the French entrepreneurial spirit?(FEATURE: FRANCE)

France is widely viewed as a country of entrepreneurs, after all that's where the name came from. Technology wiz kids, life sciences specialists and, in recent years, a growth in the amount of cleantech companies (despite France being a nation of nuclear power stations) have put France on success potential alert.

But the red tape and burdensome employment costs in France have traditionally made it a very challenging country in which to develop startups into viable profit-making businesses. And businesses with a global focus too.

President Sarkozy's right wing centralised administration would appear to be boosting entrepreneurial spirit and giving the lifeline start-ups need with funds from France's very particular wealth tax regime and through initiatives to reduce the social cost of employing the scientists and engineers.

Set up by the finance law in France in 2004 to support young companies that are very active in early stage R&D, the jeune enterprise innovante (JEI) scheme acknowledged that without some tax incentives, the country's technology, life sciences and cleantech companies would never make it out of the university labs.

The 1789 JEI companies that took advantage of the scheme in France in 2006 have collectively benefited from 87.4m [euro] of employer contribution exemptions, according to the latest data provided by the l'Agence centrale des organismes de securite sociale (ACOSS).

To qualify for the scheme there are a number of requirements but essentially a company must be in its first eight years of research activity, employ fewer than 250 people and must comply with minimum research levels to be able to take advantage of employer contribution exemptions and discounts. For a country with one of the highest levels of social costs linked to employment, the JEI scheme is a welcome boost.

The government has noted that the JEI scheme does not contravene state-aid rules set out by the European Commission. However, other such schemes to boost France's small-to-medium sized or petite et moyenne enterprise (PME) marketplace are currently up for Commission scrutiny.