PEAs and PEA-PMEs: the importance of the first payment to validate the opening date

Facts

Mr A indicated that he had opened a PEA-PME with his bank in 2017. However, when he tried to make a payment into it in July 2024, his bank advisor told him that his plan was not valid and that, in order to be able to make payments, Mr A would have to open a new PEA-PME. However, the retail investor stressed that he did not want to lose the tax benefits he had been enjoying thanks to this plan, which he said had been open for seven years.

In response, and without further explanation, bank X offered him a commercial gesture of €150, as well as the complimentary payment of his annual bank card fees for the next two years.

Not wishing to leave it at that, Mr A asked me to intervene in order to restore the validity of his PEA-PME from the date the contract was signed, i.e. in 2017.

Investigation

I contacted bank X, which confirmed that Mr A had indeed tried to make a payment of €1,000 into his PEA-PME in July 2024. However, the bank told me that prior to that date, Mr A had never made a payment into his plan.

As a result, the bank explained to me that the PEA-PME could technically no longer be activated and that Mr A would have to open a new plan in order to make the desired payments.

As regards the loss of the tax benefit asserted by Mr A, the bank stated that, as the plan had never been funded, there was no loss of the opportunity to obtain the associated tax benefits.

Bank X confirmed that it could not reinstate the validity of Mr A's PEA-PME on the date it was signed in 2017 and again offered the commercial gesture it had initially proposed.

Recommendation

On receiving this reply, I examined the case carefully.

I began by reminding Mr A that the PEA-PME is a scheme set up to encourage investment in SMEs and intermediate-sized enterprises (ETIs) in France, while benefiting from a favourable tax regime. I explained that the tax advantage applies exclusively to any capital gains and profits made, which are exempt from income tax after a period of five years.

I then pointed out that, although Mr A had opened his PEA-PME in 2017, he had not made any payments into it since that date. It appeared that, before 2024, Mr A had clearly not intended to invest in this PEA-PME.

In accordance with Article L. 221-113-3 of the Monetary and Financial Code, the opening date of a PEA-PME is the date of the first payment. As a result, the tax benefit date for a PEA-PME, just like for a PEA^[1], starts to run from the date of this first payment.

In the absence of any payments into this plan, I told Mr A that it could not be considered as having been open since 2017. Furthermore, if no investments are made, and no profits or capital gains are generated, no loss of tax advantage can be claimed.

As a result, I felt that opening a new PEA-PME to make payments would in no way affect the taxation of the initial plan, as this was not open for tax or legal purposes.

Finally, I noted that, following bank X's refusal, Mr A had requested the transfer of his PEA-PME to another bank, thinking that this would solve his problem. However, it is important to note that in the case of an unfunded PEA-PME, transferring the plan is not an appropriate solution^[2], since the retail investor can simply open a new plan immediately. It is therefore essential that professionals clearly inform investors of the PEA-PME operating rules, which are identical in this respect to those of the PEA, in order to prevent such misunderstandings.

In conclusion, I told Mr A that I could not make a favourable proposal in relation to his request and therefore recommended that he accept the commercial gesture that he had been offered.

Lesson to be learned

For the opening of a PEA or PEA-PME to be validated and for the five-year period giving entitlement to the associated tax benefits to begin, it is essential to make an initial payment as soon as the contract is signed. This payment requirement is understood as a simple deposit into the plan's cash account.  As a general rule, the account keeper may suggest that the client make a deposit just, as the expression goes, "to set a date".

Finally, I would draw investors' attention to the fact that most banks require a minimum initial deposit to open a PEA, but that this amount may vary from one bank to another^[3]. If this is the case, it also seems to me to be good practice for the professional, as account keeper, to inform clients wishing to open a PEA of this specific requirement.