Financing

Decoding: Young Innovative Growth Company (JEIC)

18.6.2024
5
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Find out more about the Jeune Entreprise Innovante de Croissance (JEIC) status, a scheme set up by the French government to support fast-growing companies that invest significantly in research and development (R&D). This article will guide you through the eligibility criteria, the tax and social benefits associated with this status, and the application process.

What is the Young Innovative Growth Company (JEIC) status?

Jeune Entreprise Innovante de Croissance (JEIC ) status is a category of JEI status specially designed to support fast-growing companies that invest significantly in research and development (R&D).

It was introduced during the 2024 Finance Act at the same time as the JEIR status and came into force on June 1ᵉʳ, 2024.

How do I know if my company qualifies for ILEAP status?

To determine whether your company qualifies as a Jeune Entreprise Innovante de Croissance (JEIC), you need to check several criteria:

1. Your company must employ fewer than 250 people and have annual sales of less than €50 million or total assets of less than €43 million.

2. It must have been created less than 8 years ago. After this period, you will no longer be eligible for this status.

3. At least 50% of your company's capital must be held by individuals, venture capital companies, venture capital funds, public interest foundations or associations, research and educational establishments or their subsidiaries.

4. It must be a new business, not the result of restructuring, concentration, expansion of existing activities or a takeover.

5. Your R&D expenditure should represent between 5% and 15% of your company's total expenses. Certain specific expenses, such as foreign exchange losses and expenses on disposals of securities, are not taken into account.

6. Your workforce must have increased by at least 100% and 10 full-time equivalent (FTE) employees compared with year N-3, and the amount of R&D expenditure must not have decreased compared with the previous year.

What are the advantages of ILEAP?

Companies benefiting from the status of Young Innovative Growth Company (JEIC) have access to both tax and social benefits.

They are designed to reduce the financial burden on your company and encourage investment in the research and development activities that are essential to your competitiveness and market expansion.

Tax exemptions

Exemption from property tax: you can be exempt from property tax on built-up properties for a period of up to seven years, subject to deliberation by the communes or EPCIs.

Exemption from cotisation foncière des entreprises (CFE ): You can also be exempt from CFE for up to seven years, subject to local authority approval.

Exemption from employer contributions

In addition, you also have the possibility of being exempted from employer contributions on the salaries of eligible employees, up to certain ceilings:

  • Monthly remuneration ceiling: The portion of monthly remuneration taken into account may not exceed €7,951. 12 per employee.
  • Annual ceiling per establishment: The total amount of the exemption may not exceed €231,840 per establishment and per calendar year.

Other benefits

Like other JEIs, JEICs benefit from assistance in accessing the public procurement market, via the innovative purchasing procedure: this procedure enables purchasers to award contracts for innovative works, supplies or services worth less than €100,000 excluding VAT, without prior advertising or competitive bidding.

Application process for ILEAP status

To obtain ILEAP status, the process is simplified, avoiding complex administrative procedures. Here's how you can apply for this status:

1. Check conditions: First of all, make sure you meet all the criteria for status, such as size, seniority, capital ownership, R&D expenditure, and headcount growth criteria.

2. Self-declaration: Unlike other forms of aid where a formal application is required, for JEIC status, you can apply the exemptions directly. This is done when you fill in your URSSAF contribution summary form.

3. No preliminary steps: You don't need to submit your own specific application or declaration to benefit from the status. The exemption applies every month as soon as your company considers that it meets the required criteria.

4. Updating information: Be sure to keep your declaratory obligations and social security contributions up to date, so that you can continue to benefit from the exemptions associated with your status.

To ensure that you obtain this status and avoid strict tax controls, we recommend that you consult experts at funding innovation. This will enable you to be sure of your alignment with the scheme and its monitoring over time. You can contact us on our contact page if you would like to benefit from our expertise.

How long does ILEAP status last?

As stated earlier, JEIC status is available to you for the first 8 years of your business. After that, you are no longer eligible.

Other Young Innovative Company statutes

In addition to the Jeune Entreprise Innovante de Croissance (JEIC) status, there are other classifications designed to support young companies in France. Each of these categories aims to stimulate innovation and growth at different levels and in different sectors. Here are a few of these statuses:

JEI status - Young Innovative Company

Like the JEIC status, the Young Innovative Company (JEI) status encourages start-ups and SMEs to carry out R&D in France. It also offers a number of tax and social benefits, such as tax and social contribution exemptions for R&D employees.

To be eligible, companies must be SMEs, less than eight years old, and not have been restructured. In addition, they must have at least 15% of their expenditure dedicated to R&D.

It is important to note that the company'seligibility and activities must be maintained to keep the benefits for eight years.

JEU status - Young University Company

The status of Jeune Entreprise Universitaire (JEU)encourages entrepreneurship within the academic community in France. It is aimed at university-based companies, 10% of which are owned by the university community, that are independent and operate as SMEs. The status is valid for eight years, and offers tax and social benefits similar to those available under other statutes. A formal partnership with a university is required.

JEIR status - Young Innovative Breakthrough Company

The JEIR are recent companies(less than 8 years old) that devote more than 30% of their costs to R&D. This status is designed to help companies carry out more ambitious research and invest more indisruptive innovation, by giving them the means to Fund their more costly activities. To this end, JEIRs benefit fromenhanced tax incentives, to stimulateprivate investment in their favor.

Damien Villiers-Moriamé

Senior Consultant funding innovation - Head of Innovation Tax, IT, Electronics - Partner - Lyon

I assist innovative companies of all sizes in their efforts to obtain public funding (CIR-CII, JEI, bpifrance, CIN, etc.). My technical knowledge intervenes in various fields such as IoT, AI, e-education, embedded systems or service robotics. My daily work consists in accompanying entrepreneurs on key and crucial steps of their projects (construction of Financing Plan, construction of Business Plan, validation of the economic model).

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