Can a foreign company claim French R&D incentives? Which ones, and how

Short answer

Yes, through a French entity that pays corporate tax in France: a subsidiary, or a branch taxed as a permanent establishment. That entity claims on R&D carried out in France, the EU or the EEA. Without a taxable presence in France, there is nothing to claim.

One question then decides most of the rest. The CIR is open to any company taxed in France, whatever its size or who owns it. The CII, JEI status and immediate refunds all apply an EU size test that counts your whole group, which is where subsidiaries of large parents drop out.

The schemes at a glance

First, you need a French taxpayer

These incentives reduce French tax, so they go to entities that pay it. Two structures qualify. A French subsidiary (SAS, SARL or SA) claims in its own name, on the R&D costs it bears. A French branch (succursale) taxed as a permanent establishment pays French corporate tax on its French profits and claims on the same terms.

What fails is R&D in France with no French taxpayer behind it. Paying engineers in France from a foreign payroll opens nothing, and neither does recharging the parent's R&D costs to a French sales office.

The CIR is open to you whatever your size

The CIR carries no size, age or ownership condition. A French subsidiary of a 50,000-person group claims on the same terms as a local startup, at 30% of eligible spending up to €100 million a year.

Eligible costs are mainly researchers' and technicians' salaries, plus a flat 40% of those salaries for operating costs. Depreciation of R&D equipment and approved subcontracted research count too.

The work has to qualify as R&D under the OECD Frascati Manual: it must resolve a scientific or technical uncertainty that the state of the art could not. Our six-question guide walks through that test.

What the group size test closes off

Three benefits are reserved for SMEs as the EU defines them: fewer than 250 employees, plus turnover under €50 million or a balance sheet under €43 million. The figures of linked companies are added together, so a 40-person French subsidiary of a 5,000-person parent is not an SME, whatever its own accounts say.

That test costs a large group three things:

• The CII, worth 20% of spending on prototypes and pilot installations of new products, capped at €400,000 of spending a year, so €80,000 of credit. It runs until 31 December 2027.
• Immediate repayment of the CIR, where everyone offsets the credit against the year's corporate tax first. SMEs get any balance back straight away; everyone else carries it forward for three years before it is refunded. A loss-making subsidiary of a large group therefore waits three years for cash, unless it assigns the claim to a bank.
• JEI status, which exempts employer social security contributions on R&D staff. This one turns on ownership rather than size: at least half the capital must be held by individuals or by a closed list of investors such as venture capital funds, other JEIs and research foundations. A corporate parent, French or foreign, is not on that list, so a startup founded by foreign individuals can qualify where a group subsidiary cannot. How the JEI exemption is calculated.

Unsure whether your French entity qualifies? Our CIR eligibility test takes two minutes, with no sign-up. → Take the CIR eligibility test

IP Box and CIFRE turn on other things

Neither looks at group size. The IP Box taxes net income from licensing patents, copyright-protected software and a few similar assets at 10% instead of the standard rate, but the French entity has to own the asset. Where the group's patents sit with the parent, the French subsidiary has no IP Box income. The calculation also favours R&D the French entity did itself or bought from unrelated companies, so sourcing it inside the group shrinks the benefit.

CIFRE pays €14,000 a year for three years to any company established in France, subsidiary or not, that hires a PhD student to work on its R&D.

If your French team does R&D for the parent

This is the most common arrangement we see. The French entity performs the R&D, invoices the parent on a cost-plus basis, and the group wonders who claims.

The French entity can, because it bears the expenditure. The credit follows the costs, not the ownership of the results. The transfer pricing arrangement and the claim do have to describe the same reality: if the contract says the parent bears the risk and owns the output, the file needs to explain why the French entity is still the one incurring eligible research expenditure. Settle that before the first claim rather than during an audit.

Two rules that catch groups out

Location: the work must be carried out in the EU, or in an EEA country that has an administrative assistance agreement with France. R&D done elsewhere does not count even when recharged to the French entity, the UK and Switzerland included.

Intra-group subcontracting: research subcontracted to a related company counts only up to €2 million a year, against €10 million for independent providers, and the provider must be approved (organisme agréé, approved research body) and located in France, the EU or the EEA. Group R&D contracts reach that ceiling quickly.

How to claim

1. Track time and costs in the French entity, per person and per project, from the first month. Rebuilding them at year end is where claims get weak.
2. Check that the intercompany contracts match the claim, as above.
3. File form 2069-A-SD with the corporate tax balance statement, by the 15th day of the fourth month after year end: 15 May for a 31 December year end.
4. Keep a technical file for each project, covering the state of the art, the uncertainty, the trials, the results and the time spent.
5. For a first claim, consider an advance ruling (rescrit, advance tax ruling), filed at least six months before the deadline. No reply within three months counts as approval.

Frequently asked questions

Can a foreign company claim the CIR without a French entity? No. The claim must come from a business taxed in France on its profits, usually a subsidiary or a branch taxed as a permanent establishment.

Does R&D carried out by our parent company abroad count? Only if the parent is in the EU or the EEA and approved for the CIR, and then only as subcontracted research, capped at €2 million a year between related companies. Outside the EU and the EEA it never counts.

Is the French subsidiary of a large group an SME? No. Under the EU definition, the headcount and financial figures of linked companies are added together. That rules out the CII, JEI status and immediate CIR refunds.

Who claims when the French entity does R&D for its foreign parent? The French entity, because it bears the cost. The transfer pricing arrangement has to be consistent with that.

Next steps

→ Take the CIR eligibility test → Estimate your CIR with the calculator → Compare all French R&D incentives

Talk to us about your claim We help dozens of international companies obtain their French R&D incentives every year, from the first eligibility check through to the filed claim and any audit that follows. Tell us what your French team works on and how the group is structured, and we will come back with the incentives it can claim. → Contact us

If the French entity does not exist yet, our parent firm, KeyPoint International, handles incorporation, accounting and tax for foreign companies in France.

Sources

• Article 244 quater B of the French tax code (version in force from 1 January 2026): CIR and CII rates, the €400,000 CII cap, the 40% flat rate for operating costs, EU/EEA location rule, subcontracting caps
• Article 199 ter B of the French tax code: carry-forward, immediate refund, and assignment of the claim
• Article 44 sexies-0 A of the French tax code: JEI conditions
• Article 238 of the French tax code: IP Box regime and nexus ratio
• BOI-BIC-RICI-10-10-10-10: businesses eligible for the CIR
• BOI-BIC-RICI-10-10-20-30: outsourced research expenditure
• BOI-SJ-RES-10-20-20-20: advance ruling for the research tax credit
• Commission Regulation (EU) No 651/2014, Annex I: SME definition
• Law no. 2026-103 of 19 February 2026 (2026 finance act)

This article reflects the law as at 29 September 2026. It is not advice on a specific situation.