The Young Innovative Company (JEI) status entitles companies that spend at least 15% of their costs on research and development (R&D) to social and tax exemptions. Which companies are eligible? How can I take advantage of these benefits? Here are the answers.
Definition of JEI status
A Jeune Entreprise Innovante (Young Innovative Company) is a special status granted to a company whose business is based in part on innovation resulting from its R&D work. These expenses must represent at least 15% of expenses, with the exception of foreign exchange losses and net expenses on disposals of marketable securities.
Companies covered by this status
Any company created before December 31, 2022 can apply for JEI status. This application must be made within the first 9 months of activity.
To obtain this special status, the company must meet four conditions:
- Must have been created less than 8 years ago;
- Not be the result of a concentration, restructuring, takeover or expansion of activity;
- Employ fewer than 250 people and generate sales of less than €50 million or total assets of less than €43 million;
- Be independent: the company's capital must not be held by a large group.
It should be noted that the status of Jeune Entreprise Innovante (Young Innovative Company) differs from that of Jeune Entreprise Universitaire (Young University Company). The latter is a special form of JEI owned by students or teacher-researchers, with the aim of valorizing their research work.
What are the advantages of Young Innovative Company status?
The status of JEI offers several advantages to beneficiaries.
Tax exemptions
A JEI benefits fromincome and corporation tax exemptions. The corporate income tax exemption applies for 24 months. It is total for the first financial year and 50% for the following period or financial year.
The company also benefits from an exemption from the territorial economic contribution (CET) and property tax for 7 years (subject to local authority approval).
Social exemptions
JEIs are exempt from social security contributions for the following items:
- researchers,
- technicians,
- research project managers,
- lawyers in charge of industrial protection,
- and research staff.
The exemption from employer contributions covers health insurance, maternity, disability, death, unemployment, old age and family allowances. There is a double ceiling per employee and per establishment.
How do you qualify for JEI status?
To obtain this status, managers must register with their company's local tax office within the first 9 months of business activity. More specifically, they must complete a declaration on their honor showing that all the conditions for becoming a Young Innovative Company have been met.