Young Innovative Company (JEI) status

What is a Young Innovative Company?

A new company that invests in research and development (R&D) can qualify for the status of Young Innovative Company (JEI), and thus benefit from social and tax advantages.

On its own or in conjunction with other schemes such as the Innovation Tax Credit (CIR) or the Crédit d’Impôt Innovation (CII), it enables you to finance your innovative projects and secure your future growth.

Which companies are eligible for JEI status?

Eligible companies are :

• SMEs in the European sense.
  They must meet the following conditions:
• Be independent,
• Carry out a new activity,
• R&D expenditure must account for at least 20% of tax-deductible expenses for that year,
• Have been in existence for less than 8 years,
• Be created no later than December 31, 2025.

What are the advantages of this scheme?

Companies qualifying as Young Innovative Enterprises (JEI) can benefit from:

Total exemption from employer social security contributions for employees involved in R&D work, for the first 8 years of the company’s existence,
Income tax exemptions for start-ups created before December 31, 2023, corresponding to :
Total exemption on profits for the first financial year,
A 50% exemption on profits earned in the following financial year.
Exemption from Cotisation Economique Territoriale (CFE and CVAE) and from property tax, provided that the local authority in which the company is located has passed a resolution to this effect.

Creation of JEC status

As of January 1, 2024, companies that spend between 5% and 15% on R&D are eligible for the status of “Jeune Entreprise de Croissance” (Young Growth Company). This scheme applies to JEIs that do not meet the condition of spending 15% of their tax-deductible expenses on R&D. The growth condition is assessed on the basis of economic performance indicators defined by decree.

At the end of the financial year, the company must meet two cumulative conditions:

• Its workforce must have increased by 100%, and by at least ten full-time equivalent employees, compared with the workforce at the close of the penultimate financial year (i.e. N-3);

AND

• The amount of research expenditure (as defined by the CIR) must not have decreased during the year compared with the previous year (N-1).
  These same conditions and indicators must be verified by JEC/JEICs wishing to take advantage of the income tax reduction offered to individuals who subscribe to the capital of these companies (as defined in article 199 terdecies 0-A bis of the French General Tax Code).