French Tax Incentives: Europe's Most Competitive Framework for Innovation
France offers the most generous fiscal framework for R&D and innovation in Europe — a deliberate policy choice that has helped make it Europe's #1 FDI destination for 6 consecutive years (EY Attractiveness Survey). The centerpiece is the 30% R&D Tax Credit (CIR), but the full incentive stack goes much deeper.
The Complete Incentive Stack
| Incentive | Benefit | Eligible | Annual Impact |
|---|---|---|---|
| CIR (Crédit d'Impôt Recherche) | 30% tax credit on first €100M of R&D spend; 5% above | All companies with R&D activity in France | €7.4B (2024) |
| CII (Crédit d'Impôt Innovation) | 20% tax credit on innovation expenses up to €400K | SMEs (<250 employees, <€50M revenue) | €800M |
| JEI (Jeune Entreprise Innovante) | Employer social charge exemptions (up to 50%) for 8 years | Companies <8 years old, 15%+ R&D spend | €200M |
| IP Box (Patent Box) | 10% corporate tax on qualifying IP income (vs 25% standard) | Companies holding qualifying patents/software | Varies |
| Impatriation Regime | 30% income tax exemption for 8 years; IFI exemption 5 years | Executives relocating to France | N/A (individual) |
CIR: The 30% R&D Tax Credit in Detail
The Crédit d'Impôt Recherche is the backbone of France's innovation incentive system. Administered by the Ministry of Higher Education and Research, it provides a 30% tax credit on the first €100 million of eligible R&D expenditure per year, and 5% above that threshold.
Critically, the CIR is refundable — meaning startups and companies with no tax liability receive a cash payment from the French treasury. This makes it one of the most startup-friendly R&D incentives globally. Eligible expenses include: researcher salaries (including up to 200% of the salary for PhD holders in their first 2 years of employment), operating costs (50% flat-rate on personnel costs), subcontracted R&D (up to €12M), patent costs, technology watch expenses, and depreciation of research equipment.
The CIR is available to all companies subject to French corporate tax — including French subsidiaries of foreign companies. There is no minimum size requirement. In 2024, over 27,000 companies claimed the CIR, with total claims of €7.4 billion. For a full operational guide, see our dedicated CIR article.
JEI: Young Innovative Company Status
The Jeune Entreprise Innovante status provides employer social charge exemptions of up to 50% on salaries of R&D staff for 8 years. To qualify, a company must: be less than 8 years old, spend at least 15% of deductible expenses on R&D, be an SME (under EU definition), be independent (not more than 50% owned by another company), and be genuinely new (not created from a restructuring). JEI status can be combined with the CIR, meaning total R&D cost recovery can reach 40–50%. Application is via the Direction Générale des Finances Publiques. See our JEI guide.
The Impatriation Regime for Executives
Executives and skilled workers relocating to France benefit from the Article 155 B impatriation regime: 30% of gross compensation is exempt from French income tax for 8 years, non-French assets are exempt from wealth tax (IFI) for 5 years, and certain foreign investment gains benefit from 50% exemption. This makes France tax-competitive with the UK, Netherlands, and Switzerland for mobile international talent. Full details in our tax residency guide.
Bpifrance: The €50B Innovation Bank
Bpifrance — France's public investment bank — provides an additional layer of financial support: innovation grants (up to €500K non-dilutive), innovation loans (€25K–5M, zero collateral), equity co-investment alongside VCs, export guarantees, and €50B+ in total managed assets. It is the largest LP in French VC funds and the primary executor of France 2030 private-sector investments. See our Bpifrance analysis.
How to Access These Incentives
Foreign companies can access all French tax incentives through a French subsidiary (SAS or SA structure). Setup takes 2–4 weeks. Key steps: (1) incorporate a French entity via Guichet Unique, (2) register with tax authorities, (3) establish R&D activities in France (can be a single researcher), (4) file CIR claim with annual corporate tax return. Many international law firms (Gide, Bredin Prat, CMS Francis Lefebvre) and Big Four firms have dedicated CIR practices. For strategic guidance on structuring French operations, see our market entry guide.