JEI: Definition of a Young University Company
The main goal of the Young University Business status is to support students from universities in creating businesses. This status offers tax and social benefits related to the Young Innovative Company (JEI) scheme.
To qualify for young university company status, the applicant company must be created before December 31, 2025. The application should be sent to the Tax Department during the first ten months following the start of the business. An agreement must be signed between the company and a higher education institution. The purpose of the research work being promoted must be specified. It must be concluded for a period of three years, renewable up to eight years.
The requirements to qualify for Young University Enterprise (JEU) status
To become a young university company, you need to meet six conditions.
Be a small or medium-sized enterprise (SME)
Companies wanting to qualify for young university business status must:
- employ fewer than 250 people;
- generate sales of less than 50 million euros or have a balance sheet of less than 43 million.
Having been created less than eight years ago
A company wishing to have the status of a young university company must have been created less than eight years ago, at the end of the financial year used as the basis for its application.
Be new
The young university business must not be created as part of a merger, business expansion, takeover or restructuring. It is created from scratch.
Management or ownership
The young university business must be managed or directly owned by students, graduates of less than five years with a master's degree or a doctorate to a minimum of 10%. It can also be held in the same proportions by people carrying out research and teaching activities.
Establish a link with an institution of higher education
A young university company must have a primary activity of promoting research work. The managers or partners must work or have worked during their studies in a higher education institution. An agreement must be established between the institution and the young university company. It specifies the conditions of the valuation.
Being independent
The company is independent within the meaning of Article 44 of the General Tax Code. The condition of capital ownership must be respected throughout the benefit of the young university company status.
Projects led by young university companies (JEU).
Young university companies develop projects in the form of:
- Fundamental research: Analyzing the properties and structures of phenomena to identify established facts and organize them into interpretive theories.
- Applied research: Seeking potential applications of fundamental research and developing a product, service model, etc.
- Experimental development through prototypes;
- Valuation of research work developed by a university or other type of higher education institution.
The tax advantages of the Young University Enterprise (JEU)
The young university business benefits from a profit tax exemption for a period of two years:
- First year: full exemption
- Second year: partial exemption of 50%
It is not possible to combine this tax exemption with the tax advantages provided for new businesses in Article 44 of the General Tax Code, nor to benefit from the advantages of setting up in an urban free zone.
Depending on the orientation of the local authorities, a young university company can benefit from an exemption from property tax and the corporate property contribution (CFE) for a maximum period of seven years.
The social benefits of the Young University Enterprise (JEU)
A young university company enjoys an exemption from employer social security contributions. It covers the following employer contributions: family allowances, health insurance, old age, death, disability and maternity. Contributions for work accidents and occupational diseases are not concerned.
The exemption from employer social security contributions is subject to two ceilings:
- Per employee: it applies to the portion of gross compensation that is less than 4.5 times the minimum wage (SMIC).
- Per company: it applies up to the annual limit per employee and per company equal to five times the annual Social Security ceiling.
This exemption is valid at the full rate for a maximum period of eight years. It only benefits young university companies for the following profiles: research employees, technicians working with researchers, lawyers in charge of industrial protection, R&D project managers, corporate officers.
Written by our editorial expert
August 5, 2024
