In short…
A Local Investment Fund (FIP — Fonds d’Investissement de Proximité) finances unlisted regional SMEs and gives an income-tax reduction of 18% of the amount invested, capped at €12,000 for a single person and €24,000 for a couple. The reduction is certain and immediate; in return, the units are risky, locked up for at least 5 years, and the exit value is not guaranteed. It is a diversification holding, not a line of tax reduction to be sized blind.
- 18% reduction of the subscription, capped at €12,000 / €24,000
- Gains exempt from income tax on exit (18.6% social levies still due)
- SME risk and a 5-year minimum lock-up: real liquidity often comes at 6–10 years
Simulate your FIP reduction
The simulator applies the rate and the cap to your situation. Your data is neither stored nor transmitted.
FIP simulator
Cut your tax by financing regional SMEs through a Local Investment Fund (FIP).
Results are provided for purely illustrative and educational purposes, based on the parameters you enter and simplified assumptions (2026 taxation, constant return, excluding inflation). They constitute neither personalised investment advice, nor tax advice, nor an offer to subscribe. Some investments carry a risk of capital loss. Before any decision, speak with an advisor.
Why a FIP is more than just a tax reduction
A FIP has a dual nature you must hold with both hands. First, it is a tax product: 18% of the subscription comes off your income tax in the year you subscribe, up to €12,000 (single) or €24,000 (couple). That benefit is certain and immediate. But it is also, and above all, an investment in unlisted regional SMEs — a real, illiquid and risky asset.
The most common mistake is to see only the first dimension. An investor who subscribes to a FIP to ‘erase €2,160 of tax’ without looking at the fund’s strategy, the quality of the management team and the level of fees is treating a capital investment like a mere accounting entry. Yet the final performance depends first on what becomes of the SME portfolio, not on the tax benefit alone.
The real patrimonial interest lies elsewhere: exposing a measured fraction of your wealth to the financing of the unlisted regional economy, with the entry risk softened by the 18% reduction. It is a building block of diversification, to be sized with caution within an overall allocation — never the core of a portfolio.
The 3 realities of a FIP: benefit and trade-offs
An immediate reduction that softens, but does not protect
The 18% reduction lands in the year you subscribe: a certain benefit that mechanically lowers your cost price. But it does not protect the capital. If the SME portfolio underperforms, the exit value can be below the capital paid in, even after the reduction. The tax benefit softens the entry; it does not guarantee a positive outcome.
SME risk and long illiquidity, to be fully accepted
You finance unlisted regional SMEs, some of which will fail — that is inherent to private markets. The units must be held for at least 5 years to keep the tax benefit, and real liquidity often comes later, between 6 and 10 years, as the fund makes disposals. This money must be money you do not need and that you accept may fluctuate, or even partly disappear.
Fees and strategy: what really drives performance
FIPs carry entry and management fees that weigh heavily on net performance. Two funds advertising the same 18% reduction can deliver very different results depending on their fees and the quality of their team. Before subscribing, you must read the investment strategy, the manager’s track record and the fee level. A FIP is first an investment choice, then a tax reduction — and it counts towards the global cap on tax breaks of €10,000 per year.
Worked example — Claire and Julien, 44 and 47, self-employed professionals in Nantes
This couple, taxed at 41%, wants to cut their tax while diversifying a small part of their wealth into private markets. They pay €20,000 into a FIP, under the couple’s €24,000 cap. Here is what the simulator calculates, without hiding the risk:
| Indicator | Amount | Comment |
|---|---|---|
| Subscription | ≈ €20,000 | under the couple’s cap (€24,000) |
| Tax reduction (18%) | ≈ €3,600 | in the year of subscription |
| Net cost price | ≈ €16,400 | after the reduction |
| Capital exposed to SME risk | ≈ €20,000 | exit value not guaranteed |
Illustrative example — figures simplified for clarity and not contractual.
The €3,600 reduction brings the cost price down to ≈ €16,400: if the fund eventually returns the initial capital, Claire and Julien are ahead by the reduction alone. But the full €20,000 remains exposed to the risk of the SMEs in the portfolio and locked up for at least 5 years, in practice often more.
That is why we size this kind of holding as a building block of diversification — a limited fraction of financial wealth — and not as a core portfolio investment. The reduction is a bonus at entry, not insurance on the exit.
A FIP is judged on the fund, not on the tax line
This simulator quantifies the reduction. The real decision is taken on the quality of the fund: strategy, management team, track record, fee level, and the right sizing within your allocation. A FIP chosen for the tax benefit alone, without looking at what is inside, is a mistake the 18% reduction will not redeem.
Balmont Conseil is an independent wealth-management firm, a member of ANACOFI, with no capital ties to any management company. We compare FIPs across the whole market and retain one only if its risk/reward justifies it, beyond the tax benefit. Let’s arrange a meeting to fit this lever, where appropriate, into a controlled allocation.
Frequently asked questions
What exactly are the rate and the cap of a FIP?
The income-tax reduction is 18% of the amount invested, up to €12,000 for a single person and €24,000 for a couple taxed jointly. This benefit counts towards the global cap on tax breaks of €10,000 per year, which must therefore be articulated with your other schemes.
What are the risks of a FIP?
A FIP invests in unlisted regional SMEs: some can fail, and the exit value is not guaranteed — it may be below the capital, even after the 18% reduction. Added to that is heavy illiquidity: the units are locked for at least 5 years, with real liquidity often coming between 6 and 10 years. It is a diversification holding, not a safe investment.
Is the gain on a FIP taxed?
If you respect the holding period, any capital gain on the sale of the units is exempt from income tax. However, the 18.6% social levies remain due on that gain. The income-tax exemption therefore does not cover the whole exit taxation.
How do I choose a good FIP?
By looking at what is inside, not just the reduction. The investment strategy, the experience and track record of the management team, and above all the level of entry and management fees drive net performance. Two FIPs advertising the same 18% reduction can deliver very different results: a FIP is first an investment choice.
Why use Balmont Conseil for a FIP?
Because a distributor has an interest in placing the funds that pay it. Balmont Conseil, an independent ANACOFI member, compares FIPs across the whole market and retains one only if its risk/reward and fee level justify it, beyond the tax benefit. We also size this holding to its proper place in your allocation, without overselling it.
Results are provided for purely illustrative and educational purposes, based on the parameters you enter and simplified assumptions (2026 taxation, constant return, excluding inflation). They constitute neither personalised investment advice, nor tax advice, nor an offer to subscribe. Some investments carry a risk of capital loss. Before any decision, speak with an advisor.