Scientific cooperation foundations now eligible to invest in start-ups

A recent rescript published in the Bulletin Officiel des Finances Publiques (BOFIP) on December 11 specifies that scientific cooperation foundations (FCS) can now invest in the capital of Young Innovative Companies (JEI)in accordance with article 44 sexies-0 A of the French General Tax Code (CGI).

New companies investing in research and development must comply with the conditions set out in thearticle 44 sexies-0 A of the CGI to qualify as "young innovative companies", in particular the composition of their capital.

Article 44 sexies-0 A of the French General Tax Code (CGI), 4°, lists the investors who may participate in the company's capital.

This measure mainly makes it possible to ensure that the company does not result from the spin-off of a group activityinsofar as the scheme is reserved for small and medium-sized businesses. These include charitable scientific foundations or associations.

However, scientific cooperation foundations are not expressly mentioned.

The French tax authorities responded favorably to this rescript, stating that, in view of the objective pursued by the legislator and the similarities between public interest foundations and scientific cooperation foundations, the latter can be considered as investors covered by 4° of article 44 sexies-0 A of the CGI.

This favorable response, which has been published, supports innovation and research, and opens up new financing opportunities for start-ups..