The French government has introduced a new initiative called the "Pacte Papin," named after Minister of Small and Medium Enterprises (PME) Serge Papin. This proposal aims to make it easier for employees to buy the businesses they work for, a process known as an employee buyout. The initiative was detailed in a letter from Sébastien Lecornu, the Minister of Ecological Transition, to entrepreneurs earlier this week. During an interview on BFM Business, Papin described the pact as a way to support both the people buying and selling businesses, especially for smaller companies. He called it a "game changer," citing his own experience of selling his company to an employee who had started as an intern. Papin emphasized that the initiative addresses a challenge related to business sovereignty and independence. He noted that around 500,000 businesses are expected to change hands in the next five to ten years, with 370,000 of those expected by 2030. This presents a major challenge but also a chance to encourage a new generation of entrepreneurs. The Pacte Papin includes several financial incentives to help employees become business owners. These include "over-amortization," which allows for extra tax deductions on company equipment, and reduced transfer fees when a business is sold. One of the key features of the plan is a significant reduction in transfer fees. For example, if a business is sold for 250,000 euros, the transfer fee would normally be 8,000 euros, but under the new plan, it would be reduced to just 250 euros. This makes it much more attractive for employees to take over a company. Additionally, sellers can extend the period for paying capital gains tax if they offer a "seller's credit" to the buyers. If the business is transferred to employees when the manager retires, the tax reduction on capital gains will be doubled. Currently, about 6,500 small and medium enterprises are acquired each year by employees. With the Pacte Papin, Papin hopes to double this number. He aims to raise awareness that taking over the company where someone works can be a rewarding and meaningful project. The initiative reflects a broader effort to support entrepreneurship and ensure the continuity of small businesses in France.