Urban Free Zones (ZFU) and Urban Free Zones-Entrepreneurial Territory (ZFU-TE) - the name given to ZFU's as of 2015 - offer companies that set up there the possibility of benefiting from a 100% tax exemption on profits for five years.
Valid until 31 December 2023, this scheme concerns all companies*, regardless of their legal status and tax regime.
To benefit from this tax exemption scheme, companies must meet the following conditions
Carry out an industrial, commercial, craft or liberal activity,
- Set up in a ZFU-TE before 31 December 2023,
- Employ less than fifty employees,
- Have a turnover (or balance sheet total) of less than 10 million euros.
In addition, the company's capital and voting rights must not be held for more than 25% by a company with more than 250 employees and an annual turnover excluding VAT exceeding 50 million euros (or with a balance sheet total exceeding 43 million euros).
Finally, the company's workforce must include at least 50% of employees (on permanent or fixed-term contracts of at least 12 months) residing in the ZFU-TE or in a priority urban district (QPV) where the ZFU-TE is located. This provision applies as of the hiring of the second employee. The number of employees in the company must be respected for each tax year.
* Companies operating in the automobile and shipbuilding sectors, the manufacture of artificial or synthetic textile fibres, the steel industry, road haulage or in the leasing of equipment and the rental of residential buildings are not eligible for the tax exemption on profits.