The Young Innovative Company status allows you to benefit from a variety of tax exemptions. But to be eligible, your business must meet all the criteria listed below:
- Be recognized as a small or medium-sized enterprise (SME).
- Be established for less than 8 years (after the eighth year you’ll no longer be eligible for JEI status).
- Employ fewer than 250 people in the fiscal year during which the status is applied for.
- Be an independent company, with at least 50% of the shares (i.e. the majority of the equity) held by individuals.
- Was created from scratch with the aim of innovating and starting a new venture, not to continue an existing business or to reorient it.
- Has spent at least 15% of total costs on research and development activities, which will be deducted from the company's taxes thanks to its JEI status.
If your company is eligible, your R&D work must also meet requirements based on the following activities:
- Developing new designs and information.
- Putting the data collected to practical use.
- Researching and analyzing the properties of a material and its structures.
- Developing potential solutions based on the results of the research and analysis of properties.
- Developing and designing innovative products, processes, and services.
You’ll need to confirm that your company has passed the 15% spending threshold for R&D activities. You can take into account any expenses incurred within the context of the research project, such as employee costs (for example, any expenses for researchers and technicians - those who are driving the research project forward). The eligible expenses include salaries, bonuses, and employer contributions.
In addition, any expenses incurred for intellectual property and the filing of patents or plant breeder's rights (certificats d'obtention végétale) are eligible for JEI status. Also eligible are any expenses incurred during research assigned to private individuals, approved by the Ministry of Research (le ministère de la recherche), and during the production or acquisition of goods - moveable or fixed, and solely intended for use as part of the research work.
It’s important to note that subsidiaries of a company or group, based in France or abroad, are also eligible for JEI status. If a subsidiary is independent of its parent company and carries out a genuine new activity, it can become a JEI.