France is the second-biggest economy in the European Union. It has a GDP of more than $2.5 trillion, which makes it the sixth largest economy in the world. The country has a population of more than 66 million people, who speak mostly French. The country is a member of a number of global organizations like OECD, NATO, G7, G20, and the European Union. France is bordered by countries like Belgium, Luxembourg, Germany, Switzerland, Italy, Spain, and Andorra. The country is ranked at position 32 on the ease of doing business index.
Advantages of a company in France
There are several reasons why you would consider registering a company in France. These are:
– An iconic country with many significant service industry.
– Highly developed to support manufacturing. This makes it the sixth largest exporter of manufactured goods.
– A strong member of the European Union.
– A youthful population that makes it easy for companies to access labour.
– Excellent infrastructure.
– Strategically located, which leads to a large market.
Requirements for starting a business in France
Depending on the chosen business entity, there are a few requirements to consider when starting a business in France. Among these, the most important ones are the documents which need to be prepared. In the case of sole proprietorships, the list of documents needed is not very extensive, however, foreign citizens must have residence permits in order to set up this type of structure. Another requirement when opening a sole trader in France is to provide information and proof of one’s qualifications. The sole trader is usually employed by professionals in the accounting, law and medical fields in France. Similar requirements apply when deciding to set up a partnership in France.
Things change when opening a SARL or SA in France, as the list of documents to be filed with the Trade Register is more extensive. The following documents need to be considered for starting a business in France:
• the personal information of the shareholders (their names, addresses, residency are required);
• information about the directors of the company (at least one director must be appointed);
• the company’s Articles of Association which must be drafted in French and authenticated by a public notary;
• proof of the company’s legal address in France (this is a mandatory requirement no matter the type of structure chosen);
• all the documents submitted by foreign individuals or companies must be translated and notarized.
The same requirements apply when opening a branch or subsidiary of a foreign company. Our French consultants can guide foreign investors who want to open companies on the documents they need to prepare for a fast and correct company registration procedure.
Procedure of starting a business in France
France encourages foreign direct investments and the procedure of opening a company in France is straightforward and very accessible due to the online company registration option. By using the online procedure, entrepreneurs avoid the bureaucratic relation with the public authorities (tax authorities, the social security agencies, the Commercial Court etc.). Thus, the entire procedure of starting a business in France doesn’t take longer than seven days. If you need legal assistance for the incorporation procedure, you may call our French lawyers.
Documents needed to open a business in France
– The following documents must be prepared in order to start a business in France:
– the company name reservation form which is filed with the Commercial Register;
– the object of activity of the company which must be accompanied by a description;
– the names of the shareholders, proof their addresses and their passports;
– the names of the directors and copies after their passports or other identification papers;
– information about the allotment of the shares in the company.
Types of companies in France
According to Commercial Law in France, the following types of entities are available for registration in France:
– the sole trader, which is the simplest business form available for single enterprisers in this country;
– the private limited liability company which take several forms, one of the most employed one being the simplified limited liability company for self-employed professionals;
– the unipersonal limited liability company which is characterized by the fact that it has one shareholder;
– the joint stock company, also known as the public limited liability company;
– the simplified public limited liability company which is preferred by foreign companies interested in the French market;
– the partnership which implies having at least two members called partners.
Our consultants in France can offer detailed information about each type of business form and help you with the procedures related to starting a business in France.
Share capital requirements for starting a business in France
– foreign investor who want to start businesses in France must comply with the following share capital requirements imposed by the law:
– the sole trader needs no minimum share capital;
– the partnership does not require a minimum share capital;
– there is no minimum share capital imposed on the private limited liability company;
– the unipersonal limited liability company requires no minimum share capital;
– the joint stock company requires a minimum share capital of 37,000 euros.
Business registration numbers in France
We can help foreign investors who want to register any of the types of companies above. The SIRET and SIREN numbers are two of the main identifiers of a company in France. The SIREN number is issued upon the registration of the business with the Trade Register and is made of 9 digits. The SIRET number is made of the SIREN number to which 5 digits are added. The last 5 digits represent the geographical location of the company in France. Another 5 digit code issued to a French company is the APE – it designates the main object of activity of the business.
Tax and social security registration of a company in France
Starting a business in France implies several steps and one of the final steps of the business registration process refers to obtaining a tax registration number and registering for social security purposes. French companies must also register for VAT, however, this requirement is not mandatory from the beginning. Obtaining a VAT number is mandatory only for trading companies in France, however, it also becomes mandatory for companies which register an annual income of 35,000 euros. French companies hiring personnel must also register for social security purposes as employers. It is also useful to note that French companies involved in trading activities can register with the Customs Authorities and obtain EORI number.
Business licensing for companies in France
The last step which will enable a French company to conduct business activities is obtaining special licenses and permits. While the general licenses are issued by the municipality, other special licenses are issued by specific authorities. Foreign investors should also know that depending on the type of company they want to open, they need to register with different authorities, as it follows:
– if the company will complete commercial activities, it must register with the Chamber of Commerce and Industry;
– if the business will complete a specific trade or craft, it must register with the Chamber of Craftsmen;
– in the case of sole trader completing liberal professions, registration with URSSAF is required;
– for those operating in agriculture, registration with the Chamber of Agriculture is required;
– financial companies must register with the Central Bank and/or the Financial Supervisory Authority.
Other activities can also require obtaining other licenses or undergoing specific inspections. It is best to consult with our tram on the licenses and permits needed for your business, in accordance with the activities you plan on undertaking here.
Start-up costs in France
On average, it is relatively easy to start a business in France in terms of costs and time, compared to the other G20 countries. Cost components include:
– facility costs,
– utility costs (electricity, telecommunications, and others),
– corporate tax.
Other start-up costs in France can include taxes for mandatory procedures, notary fees, the minimum share capital and auxiliary costs. On average, the time needed to start a business in France is 7 days, much lower than the G20 average. Our law firm in France can provide detailed information about all necessary start-up costs, depending on the type of company you choose to set up in France.
French holding companies
Another option for those interested in starting a business in France is the holding company which offers many advantages, especially from a fiscal point of view. Being a member state of the European Union, France follows the regulations of the EU’s Parent-Subsidiary directive. Thus, when a French holding company is controlling more than 10% of a subsidiary for more than one year, the dividends remitted by the EU subsidiary are free from taxation. However, on the basis of numerous double tax treaties signed by France with other countries, tax exemption can be applied in order to avoid the withholding taxes on dividends and also the companies can be exempt from paying corporate taxes, when the subsidiary is not in an EU country.
For more information about starting a business in France, please contact our law firm in France. We can provide a wide range of legal services, personalized according to your specific business needs in this country and also in other European states. If you need to set up a company in Malaysia, we can put you in touch with our local partners.
How we can help you
If you are considering forming a business or you need expert help with company registration in France, LegalGenius™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.
Please use our Company Formation Wizard if you would like to set up your registered company in France or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at email@example.com