Photo: PexelsIn short
- Income tax reduction of 18 percent of the contribution (standard 2026 rate)
- Cap: 12,000 euros per person, 24,000 euros for a couple
- Minimum holding period: 5 years
- FIP: regional SMEs / FCPI: innovative companies
- High capital loss risk
FIP and FCPI are specialised FCPR offering an income tax reduction at entry.
FIP vs FCPI comparison table
| Criterion | FIP | FCPI |
|---|---|---|
| Target | SMEs in 4 adjacent regions | Innovative companies |
| Company size | Under 250 employees | Under 2,000 employees |
| Tax reduction rate | 18 percent | 18 percent |
| Recommended horizon | 7 to 10 years | 7 to 10 years |
Tax reduction mechanism
A 10,000 euros contribution to a FIP or FCPI grants a tax reduction of 1,800 euros. The reduction offsets income tax for the year of the contribution.
The FIP and FCPI tax reduction falls within the global tax loophole cap of 10,000 euros per year. To anticipate if you combine several schemes.
Conditions to meet
- Effective payment to the fund before December 31st of the tax year
- Holding of shares for at least 5 years
- No partial redemption during the lock-up period
Limits and risks
FIP and FCPI have a high-risk profile:
- Often disappointing performance: historical median net return close to zero or negative
- High fees: 3 to 5 percent per year of management fees
- Very low liquidity: no exit before the fund is wound up
The tax benefit rarely compensates for the underperformance of the funds. Before subscribing, compare with a PEA-PME or a quality FCPR, which can offer a better net return.
Alternatives to consider
- PEA-PME: tax wrapper with gain exit exempted after 5 years, more liquidity
- Classic FCPR: without reduction at entry but with a broader fund selection
- Wealth holding: for large tickets
The tax reduction is attractive on paper, but should not overshadow the capital loss risk and very limited liquidity. To combine in a diversified strategy, never as a single placement.