Small and medium-sized enterprises in overseas territories operate in a unique economic environment. Small markets, insularity, limited access to inputs or financing—these are all factors that shape their performance. In its latest publication (INSEE Analyses No. 111, July 2025), INSEE provides a statistical analysis of the differences in financial profitability between SMEs in the overseas territories and those in mainland France. Behind the national averages—which can sometimes be misleading—lie contrasting trajectories—and some signs of resilience that deserve attention.
—
Smaller, more isolated companies
First, SMEs in the overseas territories are, on average, smaller than their counterparts in metropolitan France. In 2022, their pre-tax revenue ranged from 1.34 and 1.41 million euros depending on the region, compared to 1.53 million in mainland France. This difference is not insignificant.
These companies are also less likely to be part of a corporate group—barely 6,5 % in Guadeloupe, compared to 11,6 % in France.
Another notable feature: a higher proportion of sole proprietorships in certain regions such as French Guiana (9.6 %) or Réunion (10.2 %), and a less diversified economy.
The number of APE codes recorded clearly illustrates this concentration: 290 in French Guiana, compared with 602 in metropolitan France. This structure restricts cost-sharing and limits opportunities for cross-sector innovation.
Intermediate costs that erode value added
Another factor contributing to vulnerability: the share of intermediate consumption in revenue. In Guadeloupe, this share amounts to 73.1 1Q-3Q, compared with 69.1 1Q-3Q in France. This massive reliance on external inputs—often imported—is a direct result of the constraints posed by geographical distance.
The logical result: a lower value-added rate. It stands at 27,8 % in Guadeloupe, at 28,9 % in Martinique and in 29,9 % In French Guiana, when the average in metropolitan France exceeds 31 %.
In INSEE's own words, «This cost structure reflects a lower rate of value added in the overseas departments.».
Despite this, the overseas departments sometimes report a higher profit margin. In French Guiana, it reaches 8,4 %, versus 6,6 % in mainland France. This difference can be explained in part by a lower share of personnel expenses in value added (20.7 % in Guadeloupe compared with 24.8 % in mainland France).
Declining Productivity: A Structural Issue
Apparent labor productivity remains an Achilles’ heel for overseas SMEs. In 2022, it ranged from 52.8 thousand euros per employee in Réunion at 57,9 In French Guiana, while the average in metropolitan France is 64.9. M
However, this weakness is not due to a lack of individual effectiveness: it stems primarily from specialization in the «face-to-face sphere», focused on local demand (retail, personal services), less automated, and generating less value.
For example, the share of revenue generated in this sector amounts to 61,8 % in Martinique, 60,2 % in Réunion, compared to 49,4 % in mainland France. The overseas territories therefore concentrate a large portion of their economic activity in sectors that are structurally less productive.
Credit is more expensive here than elsewhere
Added to this is significantly more expensive access to financing. Overseas SMEs face higher interest rates, reflecting lenders’ perception of increased risk. In French Guiana, this rate reaches 3,7 %, against 1,9 % in mainland France.
The financial levy rate, that is, the ratio of interest expense to value added, amounts to 10,1 % in French Guiana and exceeds 9 % in Réunion, which is more than 3 points below the national average.
INSEE summarizes the situation as follows: «SMEs in the French overseas departments often face a higher apparent interest rate, due in particular to lenders» perception of increased risk.".
Remarkable performance… at the top of the distribution list
While the averages do not bode well for the French overseas departments, some companies are doing quite well. In French Guiana, the 10 % SMEs The most profitable ones outperform by 3,9 % compared to their most profitable counterparts in mainland France. This advantage is likely linked to the presence of the space industry, which has direct or indirect effects on the local economy.
The same trend is evident in Réunion, where very small businesses (fewer than 10 employees)—which are locally based and benefit from tax deductions—report higher profitability of 1,6 % at the top of the distribution. These pockets of strong performance, though limited, point to untapped potential.
The differences in profitability between SMEs in France’s overseas departments and those in mainland France are not simply a matter of individual performance, but rather stem from structural factors: size, sectoral specialization, financing costs, and dependence on imports. However, some overseas companies demonstrate that it is possible to perform better—even much better—in specific contexts. The challenge now is to transform these isolated successes into broader, more transformative, and sustainable trends.