The three main instruments
BSPCE, or bons de souscription de parts de createur d'entreprise, are warrants reserved for employees and officers of young, unlisted French companies. AGA, actions gratuites, are free shares granted at no cost to the employee, subject to vesting and sometimes a holding period. Stock options in the French sense, options de souscription d'actions or options d'achat d'actions, give a right to buy shares at a fixed price, similar to option plans elsewhere but with distinct French tax treatment.
- BSPCE: warrants, cheap to exercise, best tax treatment for long-tenured employees
- AGA: free shares, no strike price, subject to acquisition and holding conditions
- Stock options: right to buy shares at a set price, taxed less favourably than BSPCE in most cases
Selecting BSPCE or AGA based on eligibility
| Instrument | Company eligibility | Employee cost | Typical use |
|---|---|---|---|
| BSPCE | Young, unlisted, meets ownership tests | Strike price paid at exercise | Default for eligible startups |
| AGA | Broader eligibility, some caps apply | None, shares are free | Senior hires, retention grants |
| Stock options | Broadest eligibility | Strike price paid at exercise | Larger or listed companies |
A company that qualifies for BSPCE usually prefers it because of the favourable tax treatment on gains for employees. Once a company is no longer eligible, for example after listing or after existing for too long, it typically shifts new grants from BSPCE to AGA or stock options.
Choosing between BSPCE, AGA and options
- Can any French company issue BSPCE?
- No. The company must meet conditions on age, listing status and ownership structure. Companies that do not qualify use AGA free shares or stock options instead.
- Is BSPCE only for employees?
- BSPCE can be granted to employees and certain company officers, but the exact eligible categories are defined by law and should be checked before granting.
General information for founders, not legal or tax advice. Thresholds and rates change, so confirm the current position with an adviser in the relevant country before granting.