Starting a Business In France: An Overview
You can start a business in France if you meet the requirements. One of the major requirements is that you need to have a resident permit; this requirement is only for non-EU nationals. European union nationals do not need to apply for a long-stay visa to start a business. All they need to do is register their presence with the Mayor of their city.
Starting a business in France can be challenging due to the bureaucratic processes, but it is worth it. France has a viable economy that investors and business people leverage to make a profit.
If you are looking to hire employees at the start or anytime in the future, you will get to pick from the talent pool in France. This is excellent news for employers as the French workforce is highly educated.
Who Can Start a Business in France: Eligibility Criteria
To start a business in France, you’ll need to meet certain eligibility criteria.
- You must have a residence permit.
- You must have a social security number.
- You must have a French address.
- You must be at least 18.
- You must have the qualification required for the kind of business you want to venture into. Business people who deal in healthcare products are required to meet certain professional qualifications before starting up a venture.
- You have to engage the services of a French accountant or financial adviser. You’ll need their advice on how to manage your finances and how to navigate the French tax payment system.
The micro-entreprise, formerly auto enterprise, is a business set up for small-scale businesses. In France, the micro-enterprise is not regarded as a full-blown business venture. It is simply a tax status. The micro-enterprise must be run by a sole trader. It cannot be a limited company, nor can it trade shares.
People who go for this business structure are called Entreprise Individuelle (EI). One of the benefits of this structure is that you do not pay taxes as a business but as an individual.
To be regarded as a micro-enterprise, your business turnover must not exceed a certain threshold.
- If you intend to sell goods, your turnover, excluding VAT, for the next 2 years must not exceed € 188,700.
- If you intend to provide services, your turnover, excluding VAT, for the next 2 years must not be more than € 77,700.
- If you intend to go into farming, your turnover without VAT for the next 2 years must not exceed € 91,900.
Since there is a limit on how much you can earn as a sole trader, you are not expected to make a minimum contribution to social security like other business structures. Your social security contributions depend on the amount of sales you make in your business.
You are not mandated to employ an accountant or keep accounting books. You can do the accounting if you feel up to it.
Furthermore, the micro-entrepreneur cannot charge VAT on customers or claim VAT on expenses made.
The business and the owner are the same entity. However, new business laws now protect the personal property of the owner, like cars and houses. This only works if those were not purchased via loan.
Finally, some businesses cannot operate on the micro-enterprise level.
- Real estate companies.
- Agricultural profession.
- Financial institutions.
- Accounting companies.
- Insurance companies.
Entreprise Unipersonnelle à Responsabilité Limitée (EURL)
This structure is a limited liability company that has only one owner. This is the smallest form of an enterprise regarded as a business in France.
To start a business in this category, you must provide articles of association and pay a registration fee.
You must also publish an official announcement that you are creating an EURL. This announcement will cost you €121.
Below are the advantages you stand to enjoy if you choose to operate your business at this level:
- You have the sole right to make decisions as you please.
- Your personal properties will not be tampered with in the case of a crackdown from your business creditors. You are a separate entity from your business.
- You can decide how much capital that can go into the business.
- You can easily migrate to a bigger business structure by bringing in shareholders and partners.
- You are free to choose the tax system that is most convenient for you. This can be the corporate or income tax regime. This means you can decide if the business should be taxed via your income or the company’s profits.
- You can also downsize your company to a lower level if needed.
- Your profits from the business can be paid to you as dividends.
There are also some disadvantages of this business structure:
- It is mandatory for you to make contributions towards social security.
- You must have a gérant; this is someone responsible for the day-to-day management of the business. Normally, this can be the business owner. But if you have other things to attend to and would want a third-party manager, you’ll have to pay them a salary and also contribute towards their social security.
Société par Actions Simplifiée Unipersonnelle (SASU)
The Simplified Joint Stock Company offers more legal freedom. The government places no limit on how much turnover you have yearly.
You can start the company with any amount, which can be in cash or assets. It is also mandated that you must pay corporate tax and create articles of association. This could cost you up to €1,500. In this business structure, you must also pay yourself and keep evidence of the invoice.
A SASU company’s shares cannot be publicly traded.
The SASU company, upon the appointment of a managing director, must make the announcement official at the French company register of the Commercial Court and newspapers.
The SASU may not need an accountant or an auditor if the business does not meet any of the requirements below:
- The SASU has other companies under its control.
- The SASU had a turnover greater than €1,000,000 at the end of its 2-year existence.
- The SASU had a turnover greater than €2,000,000 and has over 20 permanent employees.
Under the SASU business model, the business can only pay corporate tax. However, there are exceptions. You can pay income tax if any of the following applies:
- The company has not been officially listed on the regulated market.
- The company has an annual turnover of less than €10,000,000 and has less than 50 employees.
- The company is less than 5 years old.
- The company engages in craft, commercial, liberal or agricultural activities.
Société à Responsibilité Limitée (SARL)
This business structure is a limited liability company that can only be formed by a minimum of 2 persons and a maximum of 100. The government of France does not specify any minimum capital that can be used to start a business.
All the associates or partners of your business must sign the articles of association. This business model also allows for adding more investors and shareholders; so far, there are not more than 100. However, for new shareholders to be added, all existing members must reach that consensus.
Like the EURL, you must have a gérant (managing director). It is possible to have more than one director. If the gérant owns over 50% of the company capital, they become a majority shareholder.
How much you’ll contribute to social security depends on if you are a major stakeholder or not. If you happen to hold the most shares, then you are seen as a régime des non salariés (self-employed person). But if you have less or equal shareholding power with someone else, you’ll be seen as a régime des salariés, that is, a salaried employee.
Société par Actions Simplifiée (SAS)
Whereas the SASU company is made up of one partner, the SAS is made up of at least 2. Contributions to the company can be in cash or assets. Note that when starting a SAS with cash, the shareholders must release at least half the funds needed for incorporation. The other half must be released within 5 years of running the business.
Below are some of the advantages of starting a company under this category:
- The partners are the ones who decide how shares will be transmitted and how the business will be run.
- The business partner’s liability is limited to their contributions.
- The business can always be restructured to accommodate more shareholders.
- The business can offer to pay its managers or employees in stock options instead of cash.
The disadvantage of setting up this kind of company is that you must pay huge incorporation fees and wade through many formalities. The process of drafting the statutes of the company is also rigorous.
French Business Visa
The French business visa permits non-EU nationals to travel to France for a maximum of 90 days for business. With this visa, you can attend business meetings and training, perform audits, offer professional service to a client or look out for a viable business area in France.
To be eligible for this visa, you must prove to the Embassy the link between your trip and the purpose.
Here are the documents you must present to the Embassy to prove your eligibility:
- France business visa form.
- Passport valid for at least 3 months after your intended trip ends. Your passport must have at least 2 empty pages where your visa will be attached.
- Medical insurance valid throughout the EU and worth at least €30,000.
- Travel itinerary outlining what you’ll do upon entering France.
- Bank statements showing you have enough money to fund your trip.
- Evidence you have a place to stay in France.
- Criminal record certificate from your home country.
- Receipt of the visa fee payment of €80.
- Invitation letter from the organisation or business in France outlining your reason for travelling, your intended duration and where you’ll be visiting in France.
- Corporate bank statement of the past 6 months.
To apply for the French business visa, do the following:
- Fill out an online visa form at the French Embassy’s portal. After doing that, you’ll get a list of all the documents you need to apply.
- Fill out the Schengen visa form online, then print and sign it.
- Schedule an appointment with the French Embassy in your country or a visa application centre.
- Gather the required documents.
- Attend the business visa interview. There, you’ll also submit hard copies of your documents.
- Pay the visa application fee.
Tech Visa for Founders
The tech visa for founders is a 4-year permit that allows the holder to start a tech-related business or ecosystem in France.
To prove that you are eligible for the tech visa (Talent passport Holder of an innovative economic project recognised by a public body), you’ll have to show:
- You have a viable business plan you want to execute in France.
- You have enough money to implement the said project, which is €20,814.73.
- Your project has been approved by a public body in the locale you want to set up.
- Visa application form, signed and completed.
- Receipt of visa fee payment of €99.
- Passport valid for at least 3 months after your visa expires.
- Digital passport photographs.
- Selection letter from any Tech visa incubator or accelerator.
- Official letter from a public body in France proving that your business idea is viable.
- Bank statements showing you have at least €20,814.73.
- Apply to any Tech Visa partners and get a letter of support.
- Once you get the letter of support, you can apply for your business idea to be recognised by a public body in France.
- After getting the letter acknowledging the viability of your business idea.
- Apply for the tech visa at the website of the French Embassy of your home country.
- Schedule and go for your interview with your supporting documents.
- When you get to France, apply for a residence permit.
Long-stay Visa (Self-employed in a regulated liberal profession),
The validity of this visa is 1 year, and you’ll have to validate your visa within 15 days of entering France. This visa is for self-employed professionals in the legal, technical, medical, teaching and artistic fields.
To be eligible for this visa, you must prove to the Embassy that your business idea will be viable in France.
You are also required to have a yearly income of €20,814.73.
You will also need to show that you are a qualified professional in your field.
- Passport valid for at least 3 months after the expiration of your visa.
- Completed and signed visa application form.
- Digital passport photographs.
- Evidence of professional experience and qualification relevant to the business you want to start.
- Medical insurance policy certificate worth at least €30,000.
- Bank statement showing you have €20,814.73.
- Criminal record certificate from your country.
- Evidence you have a place to stay in France
- Marriage and birth certificates if you intend to go with your family.
How to Apply
- Go to the website of the French Embassy in your country and fill out the online application form.
- Schedule an appointment with the French Embassy.
- Pay the visa application fees.
- Attend your interview with your supporting documents.
- Submit your biometric and passport and then wait for the Embassy’s decision.
Starting a Business in France as a Foreigner: Step By Step
To start a business in France, take these steps:
Step 1: Apply for any of the French visas listed above. This is necessary because you have to obtain a resident permit in France.
Step 2: Choose a business category. There are 4 business categories in France:
- The industrial or commercial category. These are people who do retail and rental services.
- The artisan or trade category. These are people who deal in construction, menial jobs and crafts.
- Freelance or independent professional for remote workers and those who provide intellectual services.
Step 3: Register your Business. Every business category in France has a registration centre that handles the registration of new companies. These centres also offer online company registration in France:
- Chambre de Commerce et d’Industrie (CCI) is the registration centre for the commercial business category.
- Chambre de Métiers et de l’Artisanat (CMA) is the registration centre for craftspersons.
- URSSAF for those offering intellectual services.
- Chambre d’agriculture for agric activities.
Step 4: Get the relevant qualifications for running your business. This is particularly important if your profession is regulated, like lawyers, wine dealers, medical professionals, builders and architects.
Step 5: Get APE, Siren and Siret numbers. After registering your business with the relevant centre, you get a document confirming your registration called Extrait Kbis. This document will also contain your business’ Siren and Siret numbers. These numbers are the identity of your business. The Siret number changes each time you change business location.
You also receive the Activite principale de l’entreprise (APE), which indicates exactly what your business does.
Step 6: The next step is to choose a business name. There is a registry of names at the Institut national de la propriété industrielle (INPI). You can search there to see if someone already uses your business name. The AFNIC portal is the register for domain names for websites. You can also confirm if your website name has been taken on the portal.
How Total Law Can Help
Applying for a business visa that suits your plans and goals can be difficult. Not to mention that there are many technicalities to consider when setting up a business.
At Total Law, we have consultants who can advise you on the best route to start a business. We can help review your documents, assess your eligibility and then make the necessary applications for you.
Call us at +44 (0)333 305 9375 or message us online if you need our expert services or want to know more about what we can do for you.
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