STARTING A BUSINESS IN FRANCE

French business culture

In the past, the image of France as a country with strong unions and a focus on joie de vivre may have made foreign entrepreneurs hesitant. However, recent reports have confirmed that despite long holidays and a 35-hour work week, French workers are highly productive compared to other EU and OECD countries. Nonetheless, some critics suggest that the French economy faces problems such as a rigid labor market, complex tax system, weak competition, relatively poor management practices, and skills mismatch.

According to EY’s latest business attractiveness survey, France remained the leading foreign direct investment (FDI) destination in Europe, ahead of both the UK and Germany. Life sciences and e-commerce are considered the best sectors for business investment. Although there was a sharp drop in investments during the COVID-19 pandemic, France launched a major economic recovery plan, France Relance, to support business ventures. Perhaps as a result of this, 74% of investors believe that France’s attractiveness will improve in years to come.

Who can start a business in France?

To start a business in France, you’ll need a residence permit or to be an EU citizen. You’ll also need a social security number and a French address. In addition, you have to be at least 18 years old. Depending on your field of work, you may need qualifications or diplomas that French authorities recognize.

You should also seek professional advice from a French accountant or financial expert when starting your own business in France. One way to handle the registration quickly and efficiently is by using a one-stop shop like Companow or SeDomicilier. The Ministry of Economy’s website also includes guidelines for foreigners who wish to open a business in France, with links to the relevant forms.

 

  

 

Foreign companies opening up a French branch or subsidiary

If you want to set up a foreign-owned company in France, there are a few forms to choose from:

A liaison office for non-commercial activities (bureau de liaison)

This can be an initial step that allows you to prospect in the French market without needing to establish a legal or fiscal entity. The activities covered by such a structure can include canvassing, advertising, information, storage, or any other activity of a preparatory and auxiliary nature. You still need to contact the relevant CFE (business registration center) and receive Siret and Siren numbers for your venture.

A branch (succurasale)

This structure will not have its own legal entity or capital in France separate from the parent company. However, it is subject to the French tax regime. If the country of the parent company and France do not have a bilateral agreement, profits will be subject to double taxation. The branch must be registered with the Registre du commerce et des sociétés (Trade and Commpanies Register). In addition, the parent company’s articles of association and application to register the branch must be handed into the Tribunal de commerce (commercial court).

A subsidiary (filiale)

This structure will be a legal entity in its own right, with assets and capital in its name. As such, the process for setting up a subsidiary will follow the same steps as described above.

Starting up a non-profit company in France

In France, a condition for setting up a non-profit or charity, known simply as an association, is that at least two people must be involved in the project. The steps are relatively simple:

Pick a name for your organization

Check which names and acronyms are already in use.

Write up the articles of association

This needs to cover the functions of the different positions within the association and details such as membership contributions and procedures for excluding members.

Register the organization

You can do this through the e-création portal, but you already need a social security number to access it.

Open a separate bank account for the non-profit

You only need to signal revenue to state financial services if your non-profit generates over €72,432 per year. You will also need to go through the same accounting and administrative obligations as for-profit companies.

 

  

 

Choosing a business category in France

In France, businesses belong to one of four different categories:

•  Commercial or industrial – for example, running a shop, purchasing for resale, and rental services

•  Trades/artisan – this includes construction, other manual jobs, some manufacturing, and services like hairdressing

•  Independent or freelance professional – for those working independently and providing an intellectual service

•  Agricultural

Each category has its own registration center (Centre de Formalités des Entreprises or CFE) local to each department in France.

Getting Siret, Siren, and APE numbers

Once you have registered your business with the relevant CFE, they will send you an official document, called an extrait Kbis, to confirm the registration. This document will include the Siret and Siren numbers that identify your business to both your clients and the authorities.

The Siren is made up of nine numbers unique to your business. The Siret is made up of the Siren number followed by the five digits of the NIC (for Numéro interne de classification – internal classification number). The latter identifies the geographic location of your business. As such, while your company’s Siren number always stays the same, you get a new Siret number whenever you change your company address. The Siret number must appear on all your company’s official documentation, including invoices.

You will also have an APE (Activite principale de l’entreprise – principal company activity) or NAF code. This identifies the main activity of your business. Each business category in France is categorized using these codes, which consist of four digits and a letter.

Choosing your company name

You can check online and free of charge whether your desired name is already in use by another company through the Institut national de la propriété industrielle (INPI – National Institute of Industrial Property). If you want to protect your business name or logo, you must register it as a trademark (dépôt de marque) with the INPI. If you don’t, and someone else starts using the same name or logo in the future, you will have no legal right to keep it.

When you create a website, check that the name you want is available through the AFNIC, the registry for .fr domain names.

 

 

Documentation needed to register your French business

What documents you need to register will vary depending on your type of business. You will certainly need the following:

•  Proof of address (such as a utility bill or rental agreement)

•  Valid ID (a valid passport, national travel ID, or residence card)

•  A social security card

In addition, you may be asked to provide:

•  Articles of association that cover the legal, fiscal, and social regulations governing your business structure (this applies to businesses set up as EURL, SARL, SA, or SAS, for example, but not for auto-entrepreneurs or EIRLs)

•  Proof of authorization relating to the intended use of your future business premises

•  Previous tax statements or other relevant financial documentation

•  A completed application for registration

Starting up an online business in France

If you want to start an e-commerce business (boutique de vente en ligne) in France, the process is much the same as described above. Whether you plan to offer services or sell goods online, you still need to choose a business category and legal status and register your business.

Hiring employees in France

Employing workers is expensive in France. If you want to take on employees, bear in mind that you will have to pay social charges for your staff in addition to the social charges for your company. This means you must pay employees a net salary plus a further 75% in employers’ and employees’ contributions.

Workers are well protected by labor law in France. It’s a good idea to get professional advice on employment contracts, working conditions, employment law, and the minimum wage.

Some essential points to bear in mind in terms of business administration in France are:

Keep on top of paperwork.

Keep all receipts.

Have a separate business bank account.

Put money aside to pay tax, social charges, and VAT (if applicable).

Fortunately, there are firms specializing in helping foreigners with their tax affairs. French Tax Online, for example, offers expert assistance to internationals who need to file a tax return.

Invoicing in France

All your business invoicing must include the following information:

Invoice date

Date and description of the service or sale

The price minus any discounts

The total amount excluding VAT (prix HT – hors tax), the VAT (TVA) or a specific mention that TVA is not charged, and the total sale price (TTC)

Client name and address

Company name, company form (e.g., SARL)

Registered address

Siren number (RCS if applicable)

Obtaining a French business visa

A new French Tech Visa system has been created to promote business creation and investment from outside the EU. It is open to start-up employees, founders, and investors. It has no diploma requirements, automatically extends to immediate family members, and is valid for a minimum of four years. This is an accelerated procedure to get a French residence and work permit. However, it is just the most recent of many different types of work visas you can apply for – each one has its own requirements.