BSPCE: giving employees a stake in a French startup

What is a BSPCE?

A BSPCE is a warrant that allows its holder to subscribe for shares in the company at an exercise price set in advance, generally close to the share’s value at the time of the grant.

If the company grows in value, the holder can buy the shares at the original price and then, on a sale or buyback, make a capital gain equal to the difference between the sale value and that exercise price.

If the company does not grow in value, the holder has no obligation to exercise the warrants and loses no money, which is what makes the tool attractive to employees joining a startup early on.

Which companies can grant BSPCE?

BSPCE are reserved for French joint-stock companies, such as the SAS or the SA, that meet several conditions set by the French General Tax Code, notably relating to the company’s age, who holds its capital and the fact that it was not created as part of a restructuring.

• A SARL (French private limited company) cannot issue them, which is one reason startups often choose the SAS for co-founders.
• Eligible holders are mainly employees and certain corporate officers taxed under the employee regime.
• Some members of the board of directors or supervisory board can also receive them, under regulated conditions.

Under French law, the conditions are set by article 163 bis G of the General Tax Code (version in force since the 2026 Finance Act). The company must:

• be a joint-stock company (SAS, SA) subject to corporate tax in France,
• have been registered with the trade and companies register for less than 15 years,
• not have been created through a merger, restructuring, extension or takeover of existing activities,
• if it is listed, have a market capitalisation below €150 million,
• have at least 15% of its capital held directly and continuously by individuals, or by companies themselves at least 75% held by individuals.

The 2026 Finance Act lowered that last threshold from 25% to 15%, so older guides quoting 25% are out of date.

How does a BSPCE work, from grant to sale?

1. 1The shareholders, meeting in a general meeting, authorise the issue of a maximum number of BSPCE and set the main rules.
2. 2The president or the competent body grants the warrants to each holder, with an exercise price and a vesting schedule.
3. 3The warrants vest progressively, often through a mechanism similar to vesting with a minimum period called a cliff.
4. 4The holder exercises their vested warrants by paying the exercise price and becomes a shareholder.
5. 5They sell their shares when the company is sold, during a funding round that includes a buyback, or at an IPO, and may then make a capital gain.

The grant agreement also specifies what happens if the holder leaves, for example the loss of unvested warrants and a limited period to exercise the vested ones.

BSPCE, free shares, BSA: what are the differences?

Free shares can have value even if the company does not grow, but their tax and social security treatment is different. BSA are often used for people who are not employees, such as mentors or members of a strategic committee.

How do you build a BSPCE plan for your first employees?

Think of a BSPCE plan as a pool of shares set aside for the hires of the coming years. Its size depends on your needs and is also negotiated with investors during funding rounds.

• ✓Define the overall pool and the portion you intend to grant to the first key hires.
• ✓Set clear grant rules based on role, seniority and expected impact.
• ✓Plan a vesting schedule and the consequences of leaving, consistent with the shareholders’ agreement.
• ✓Explain clearly to holders the exercise price, possible dilution and the fact that a gain is never guaranteed.
• ✓Document every grant in writing and keep an up-to-date register.

To attract the right people, combine the plan with a clear offer: our guide to hiring your first employees details the method, and on the candidate side, the guide to joining a startup helps evaluate an offer.

Which pitfalls should you avoid?

• Promising BSPCE verbally with no formal shareholder decision and no written agreement.
• Setting an exercise price without justifying the share’s value, which can cause tax problems.
• Granting too large a pool from the start and leaving no room for later hires.
• Suggesting a gain is certain or quoting an amount, when everything depends on the company’s future value.
• Forgetting the exercise deadline after a departure, which can cost a poorly informed employee their rights.