The Finance Act for 2024 has introduced a new category of Young Innovative Company (JEI) the JEI de croissance (JEIC) for companies with between 5% and 15% of R&D expenditure. The decree came into force on June 1, 2024.
As a reminder, in the past, only companies that met the classic criteria set out below and spent at least 15% on research were eligible for JEI status.
Please find below the criteria to be met in order to qualify for JEI status, and the new conditions for qualifying as an JEIC.
The JEI de croissance (JEIC) must meet "classic" criteria
- Be SMEThe company must have fewer than 250 employees AND sales of less than €50 million or a balance sheet total of less than €43 million;
- Be created less than 8 years ago;
- Have a capital continuously held at 50 % at least "by natural persons, companies meeting the same capital ownership requirements, venture capital companies, venture capital mutual funds, specialized professional funds, foundations or associations recognized as being in the public interest, or research and educational establishments or their subsidiaries".
- Not be created as part of a merger, restructuring, expansion of pre-existing activities or takeover..
In addition, ILEAP must meet certain economic performance indicators
On May 24, 2024, the Prime Minister published the decree specifying these indicators in the official gazette.
Article 49Q of Appendix III to the General Tax Code now stipulates that a JEI that meets the following economic performance indicators will be eligible for JEI growth status :
A la year-end closingthe company must have met the following cumulative conditions:
- Its workforcecalculated in accordance with articles 1111-2, L. 1111-3and L. 1251-54 of the Labour Codewill have to have increased by at least 100 % and at least ten full-time equivalent employeesin relation to that recorded at the close of the previous year (the year preceding the penultimate year).
- It must not no reduction in research expenditure as defined by the CIR in year N compared with year N-1
The application of these conditions must be assessed on a 12-month period. Companies that meet all these conditions can qualify for the Young Innovative Growth Company (JEIC) status.
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