Financing

Deciphering: Young University Enterprise (JEU) status

30.5.2024
5
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The Jeune Entreprise Universitaire (JEU) status represents a valuable opportunity for creative and ambitious individuals, whether students, recent graduates or members of the academic staff. This status, which is closely associated with the Jeune Entreprise Innovante (JEI), offers a privileged pathway for those wishing to embark on an entrepreneurial career, while benefiting from significant advantages. Find out more about the eligibility criteria, tax and social benefits, and the application process, and discover how JEU can serve as a springboard for your innovation and entrepreneurship projects.

Definition: Young University Enterprise (JEU)

The Jeune Entreprise Universitaire (JEU) is a status reserved for companies founded by students, recent graduates or academic staff involved in research within higher education establishments. These companies benefit from specific conditions, as well as social and tax advantages, with the aim of encouragingentrepreneurship within the university community.

What does it take to be a PLAYER?

To be recognized as a Young University Enterprise (JEU), several criteria must be met:

1. Academic participation: At least 10% of the company's capital must be owned by academic stakeholders, such as students, recent graduates or academic staff.

2. Company independence: The company's share capital must not be majority-owned ( 50% or more) by other companies.

3. Company size: The company must have fewer than 250 employees and sales of less than €50 million, corresponding to the status of a small or medium-sized enterprise (SME).

4. Duration of existence: JEU status can only be granted for the first 8 years following the company's creation.

5. Link with higher education: JEU must establish a partnership with a French higher education establishment, formalized by an agreement specifying the nature of the collaboration and the valorization of the research work.

What are the benefits?

The advantages of the JEU (Jeune Entreprise Universitaire) scheme are many and can greatly help the development of a university start-up.

Tax relief

The tax breaks granted by the Young University Enterprise (JEU) status are significant advantages for the beneficiary companies. Firstly, these companies are eligible for a total exemption from corporate income tax for their first financial year, followed by a 50% reduction for the following year.

Companies created after January 1, 2024 will not benefit from the income tax exemption.

In addition, they can benefit from an exemption from property tax for up to 7 years, subject to local authority approval. This exemption extends to business property tax (cotisation foncière des entreprises - CFE).

Lastly, the beneficiary company is exempt fromannual flat-rate taxation (IFA ) for as long as it holds JEU status.

Exemption from employer contributions

Exemption from employer contributions is a significant advantage for companies with Young University Enterprise (JEU) status. This exemption covers several types of social contributions, including those for maternity, disability, death, family allowances and retirement.

It should be noted that this exemption does not cover all social security contributions. It does not include supplementary pension contributions, additional employer contributions, or contributions relating to occupational illnesses and accidents.

Eligible companies can benefit from this exemption for a limited period, up to a maximum of 8 years. In addition, there are limits to this exemption, notably concerning the amount of gross salaries. In fact, this exemption is capped at a fraction of gross salaries below 4.5 times the minimum wage, and at an annual ceiling based on the social security ceiling.

It is important to note that to be eligible for this exemption, companies must be up to date with their social security declarations and payments. However, arrangements can be made for companies that have set up a plan to pay off their social security contributions.

Link with JEI (Jeune Entreprise Innovante) status

The JEU is a variant of the JEI, each with its own specific requirements. The JEI is open to any innovative company that meets certain criteria, while the JEU must be at least 10% owned by players from the academic world.

Each status has its own criteria and requirements, which companies must meet to benefit from the corresponding advantages. So, although JEU and JEI have similarities, they are two distinct statuses with their own eligibility requirements.

How do I apply for the GAME?

Steps to obtain status

To obtain Young University Enterprise (JEU) status, you must complete the following steps:

1. Early notification: you must inform the tax authorities of your intention to obtain JEU status within the first 10 months of operation.

2. Agreement with a higher education establishment: you must also draw up an agreement detailing the partnership and valorization of your research work with a French higher education establishment.

3. Rescript request: you can submit a rescript request to the tax authorities to confirm that you meet the required criteria.

The application process can be carried out with or without a rescript. With a rescrit, you make an advance request to the authorities to ensure that you acquire the status. Without rescrit, you simply mark an option and benefit from the advantages. Nevertheless, this approach could leave you vulnerable to a tax audit later on, which could be more severe than if you had proceeded with a rescrit.

Contents of an agreement with a higher education establishment

The agreement between the company and the higher education institution must include the following elements:

  • Distribution of company ownership among academic players, with a minimum of 10% held by members of the academic world.
  • A description of the company's research activities.
  • Intellectual property associated with research work.
  • Services offered by the higher education institution, such as financial or logistical support.

Renewal and loss of status

  • Renewal of the agreement: The initial agreement is for 3 years, renewable up to a maximum of 8 years from the date of the company's creation.
  • Loss of status: A company loses its JEU status if it no longer meets the required criteria, in particular if it exceeds the age limit of 8 years since its creation.

Rescrit JEU

The JEU rescript gives you the opportunity to check that your company meets the criteria to be recognized as a JEU, and to ask the tax authorities for their opinion. This process enables you to receive official confirmation of your eligibility for JEU status.

To apply for a JEU rescrit, you need to submit a request to the tax authorities. This request must be made in writing, generally in the form ofa registered letter with acknowledgement of receipt. The tax authorities then have 3 months to respond.

If the response is favorable, you'll be able to take advantage of the tax and social benefits associated with JEU status. What's more, if no response is received within the set deadline, the agreement is deemed to have been granted.

The JEU rescript therefore gives you certainty about your eligibility for JEU status, which can help you plan your activities and take advantage of the associated tax and social benefits.

Compatibility with other plans

The Young University Enterprise (JEU) can be compatible with other tax schemes, providing additional opportunities for investee companies.

Research Tax Credit (CIR)

JEU is compatible with the Research Tax Credit (CIR), which encourages companies' research and development activities. Eligible research expenses incurred by a JEU can contribute to the calculation of the CIR, provided they meet the specific criteria defined by tax legislation.

Innovation Tax Credit (CII)

The Innovation Tax Credit (CII) is designed to encourage innovation activities before a product is brought to market. It can also be combined with the JEU or CIR.

Other devices

In addition to the schemes mentioned above, JEU may be compatible with other tax and regulatory schemes, such as public subsidies, European funding, or public-private partnerships. Compatibility will depend on the specific conditions of each scheme and the company's particular situation.

Dynergie, a consulting firm, can help you obtain your JEU status.

Dynergie guides you in obtaining and maintaining your JEU status. You can consult our offer on the following page.

Useful links:

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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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