- Starting a Business in France – An Overview
- Branching Out – What Are My Options?
- Legal Structures
- Registering Your Business
- Business Visas in France
- Application Fees
- Application Process
- Bringing Staff from the UK to Your New Business
- How Can Total Law Help?
- Frequently Asked Questions
Starting a Business in France – An Overview
When preparing to set up your business in France, it is important to consider the available options. While it can be hard to know what the future for your business might look like, it is important to try and understand your current and future needs to determine the legal model that will best suit your circumstances. The company structure you choose will determine core aspects of your company such as legal and tax implications, liability and assets, as well as employment regulations.
You might also want to consider whether your business qualifies for additional support. General requirements vary, so you will need to research your particular market on the ‘aides-enterprises’ website. Support includes grants, allowances, honour-loans, or interest-free loans which might be offered by institutions such as central government or public sector agencies, local authorities, or Municipal and inter-municipal councils.
If you wish to expand an existing company into the French market, you will need to set up a new legal entity to represent your business. There are three main categories which offer different levels of complexity and autonomy from the parent company.
This is a good first step when expanding into a new market, as it facilitates communication with your French customer base and partners while retaining a simple legal structure. Liaison offices are no point of direct commercial activity, which still comes from the parent company, and involve simplified tax implications and liability.
This structure is not recognised as a full legal entity in France and doesn’t usually need to be registered with the RCS (‘Registre du commerce et des sociétés’). You will need to declare its existence to the Business Formalities Center (‘Centre des Formalités pour les Entreprises’ or CFE) which costs around €200.
Liaison offices don’t pay corporate tax, VAT, housing tax, or social security contributions, and no separate bank account is required.
Registration with the RCS may become necessary when a bank account is desired, as many banks require evidence of business registration.
Should your liaison office employ workers, you will additionally need to file declaration formalities with the URSSAF and pay social security contributions.
A branch is one step up from a liaison office and allows direct commercial activities. It is considered a geographical expansion of your company with a physical establishment in France and includes relative independence from the parent company while remaining under its control, lending it autonomy while limiting liability.
As commercial transactions and contracts may be in the name of the branch (on behalf of the foreign company), a branch needs to be added to the company register (‘Registre du commerce et des sociétés’ or RCS). You must register with the Commercial Court Registry and the Business Formalities Center within 15 days after opening.
A branch is subject to corporate tax, housing tax, and social security contributions. VAT only applies to the parent company.
A subsidiary is the most complex form of expansion and establishes an independent legal entity. It offers the most autonomy from the parent company as it includes a separation of assets and access to government support schemes for the French business.
While specifics depend on its legal form, a subsidiary generally holds personal liability for mismanagement and debt. Additionally, subsidiaries will be subject to corporate tax, housing tax, VAT and social security contributions.
Subsidiaries may take the legal form of an SA, SAS, or SARL.
France offers several different legal structures under which a business might be established:
- SARL (‘Société à Responsibilité Limitée’)
- EURL (‘Entreprise Unipersonelle à Responsibilité Limitée’)
- SAS (‘Societé Par Actions Simplifieé’)
- SASU (‘Société par actions simplifiée à associé unique’)
- SA (‘Societé Anonyme’)
- EI (‘Enterpreneur individuelle’)
- ME (Micro Enterprise), previously called AE (‘Auto-Entrepreneur’)
While the SA is one of the most complex forms for a business, the most common structures are the SARL or SAS, which are both limited liability companies. A SAS is more flexible in its operation, while the SARL is more regulated.
If you are the sole founder, you may choose between a single-founder SARL (‘SARL à associé unique’) also known as an EURL (‘Entreprise Unipersonelle à Responsibilité Limitée’), or a single-founder SAS, also known as SASU (‘Société par actions simplifiée à associé unique’).
The EI and MA offer alternatives for independent entrepreneurs wishing to pursue their business in France.
The SARL offers a good foundation for a small to medium-sized limited liability company. It requires 2 founding partners and can have up to 100. While partners may be natural persons (individuals) or legal persons (companies), the director or manager must be a natural person.
Advantages include the low starting capital of only €1 and the freedom to decide share capital among partners.
Additionally, SARLS offer security, as liabilities are limited to the partners’ contribution amounts. However, the SARL is highly regulated by French law and offers less flexibility than other structures.
It is available to craftsmen, shopkeepers, industrialists, and liberal professions, and is suitable for family-run businesses. Ineligible trades include judicial and healthcare professions (except pharmacists) and tobacconists.
SARLs are subject to corporate tax but may apply for general income tax instead, whereby tax will be payable by the partners instead of the company.
The EURL is the single-founder equivalent to the SARL and shares most of its properties. Unlike the SARL, a EURL can only be managed by a natural person. Legal persons are not eligible to establish a EURL. The EURL itself may be a legal or physical entity.
This structure has the same benefits as the SARL. This means that the starting capital is €1 and that liabilities are limited to contribution amounts.
EURLs are subject to income tax but may apply for corporate income tax.
The SAS is a simplified stock company with 2 or more founding partners. There is no limit to the partners a SAS might have. It is headed by at least one company president who may be a natural or legal person, making this legal form desirable for establishing a joint venture between foreign companies and french companies.
This structure requires a low starting capital of €1 and offers great flexibility to the partners, who may decide how to structure its operations through by-laws. While the SAS is permitted to sell shares privately, it cannot be listed on the stock market or make public offerings.
SAS businesses are subject to corporate income tax. New ventures (less than 5 years) may apply to be considered for income tax on a limited basis. They must have less than 50 employees and an annual turnover of under 10 million euros. Companies trading in restricted markets are not eligible.
The SASU is the single-founder equivalent of the SAS. Different to the EURL, the SASU may be founded by either a natural or legal person and allows future expansion by adding partners, which would make it a SAS.
This structure is desirable for start-ups and independent entrepreneurs who wish to have a more detailed business structure. Ineligible trades include judicial professions and tobacconists.
Advantages of the SASU include the low starting capital of €1, as well as the highly customisable options for operation. The single shareholder’s personal assets will be protected in case of debt.
A SASU is usually subject to corporate income tax but may apply for general income tax instead.
The SA is the most complex out of the common business structures in France and is usually used by larger corporations that wish to go public on the stock market. It requires a minimum of 7 founding partners, but there is no upper limit.
One notable difference to the other company structures is that a SA requires a much larger initial capital of at least €37,000 to incorporate, and €225,000 to make a public offering. Shareholder liability is limited to their contribution.
A SA must pay corporate tax.
The EI covers sole traders who do not want to establish a private limited company. It is subject to personal income tax.
Since the discontinuation of the EIRL in 2022, the EI provides better asset protection by limiting liable assets to those allocated to the trade. Entrepreneurs must add a mention of EI or ‘entrepreneur individuel’ before or after their name on all official correspondence involving their trade, to make sure this protection applies.
Different to the ME, this status covers a sole trader without the simplification in accounting and formalities.
The ME allows a micro entrepreneur to open a small business. It is open to freelancers and other self-employed traders, including those with EI status.
While not a traditional business structure, the ME benefits from simplified tax and accounting rules. This means that you won’t need to maintain full accounting records, only tracking income instead. You may need to track expenses when operating as a trader (‘commercant’).
Micro enterprises don’t claim expenses or charge VAT if their turnover remains under the regulated thresholds of €85,500 (trading) and €36,500 (services). Social security contributions are payable in proportion to income instead of a flat rate.
A ME must declare its turnover, no matter what. If it exceeds the capped turnover rates of €176,200 (trading) or €72,600 (services) for 2 years in a row its status will automatically be removed.
Before you are ready to register your business you will need to select the best legal form and register your company’s name and trademark. You will need to check the Commercial Court Registry and the French Patent and Trademark Office (INPI) to see if your name is available.
You will also need to set up a business bank account and deposit the share capital (if applicable). You may need to present your business plan to be able to do so. The account will be blocked until your company has been successfully registered. To activate your account, provide your K-bis extract or SIREN number.
You will need to draw up your company formalities, stating the:
- Company name
- Company Logo
- Legal form
- Corporate purpose
- Duration (a maximum of 99 years, renewable)
- Registered location
- Registered share capital
- Valuation of each shareholder’s contribution
- Number and distribution of shares among partners
- Year-end or accounting reference date
If you are unsure how to set up your formalities or would like advice for other parts of this process, you can call Total Law today at 0333 305 9375. Our experts have experience in navigating the legal landscape of starting a business in France and will be happy to assist you.
Incorporating Your Business
Before officially registering, you must publish a note of incorporation. This is to inform all interested parties of your intention to start this business.
After this, you will be ready to register with the National Register of Companies (RNE) and the Trade and Companies Register (RCS), or URSSAF. You will need to declare your company online, after which your details will be passed on to the appropriate authorities:
- INPI (National Institute of Industrial Property) for registration in the RNE (National Register of Companies), if applicable.
- The Registrar’s Office for registration in the Trade and Companies Register (RCS)
- The relevant social organisations and tax authorities.
You will receive your incorporation certificate (Extract K-bis) which will include your SIRET number. You will also receive your SIREN number (unique business number) from the INSEE.
While the exact timeline depends on your planning process, you should expect to wait approximately 2 weeks for your registration to be processed. Activating the bank account may take another 4 weeks.
The cost of starting your business will largely depend on its nature. In general, you should expect to pay a registration fee ranging between €40 to €200.
Publishing your formalities will also cost between €200 and €230.
Keep in mind that while the minimum capital for some business structures is only €1, banks might require a larger deposit and often prefer at least €4,000.
Unless you plan to have no physical presence in France, you will need to obtain a residential permission that permits you to carry out commercial, craft, or industrial activities in France.
Depending on your circumstances and business plans, you may decide to apply for one of these options:
- Talent Passport for New Businesses
- Talent Passport or Innovative Business Projects
- Entrepreneur or Independent Professional Residence Permit
You will need to show proof of your planned business ventures when applying for any of these permissions.
Talent Passport for New Businesses
The Talent Passport for new business creators (‘Créateur d’entreprise’) may be the best choice if you are starting a new business in France that wouldn’t qualify as a start-up. It is valid for 4 years and can be renewed.
Eligible candidates must provide evidence of:
- A master’s degree level qualification or equivalent, or 5 years of relevant professional experience
- A real and serious plan for an economically viable business
- An investment of at least €30,000 in the planned business
- Sufficient annual financial means equal or above the statutory minimum wage requirements (SMIC) of €20,966.40 (May 2023)
If you are establishing a business in your own name, you will also need to provide a copy of the preliminary commercial lease or sublease of your future business premises, stating the planned business activity and your permission to utilise the premises.
Talent Passport for Innovative Business Projects
The innovative business project Talent Passport (‘Passeport talent: Porteur de projet innovant’) is intended for start-up founders and may be suitable if you are coming to France with an eligible innovative business idea. International start-up founders who were selected by an incubator of the French Tech label may qualify under the French Tech visa pathway.
To qualify, you must:
- Have an innovative business project
- Have your project be recognised by a suitable public-sector body
- Have sufficient financial means that meet the annual minimum wage requirements (SMIC) of at least €20,966.40 (May 2023).
This permission may be renewed after 4 years.
French Tech Visa for Founders
The French Tech sector offers this programme to support international start-up founders with an innovative business idea in a relevant tech sector and to boost the French economy. General eligibility requirements are the same as for start-up founders, however, you will need to apply and be selected by a French Tech Visa partner incubator or accelerator, or gain support from at least 2 members of the French Tech ecosystem.
Selected candidates will be able to obtain a Talent Passport for an innovative economic project, while also receiving additional support from the existing Tech ecosystem in France.
Entrepreneur or Independent Professional Residence Permit
This residence permission, also called ‘Carte de séjour temporaire Entrepreneur / Profession libérale’ is a temporary residential permission intended for foreign entrepreneurs. It is valid for 12 months, renewable, and will allow you to engage in the liberal profession under which you applied.
Eligible entrepreneurs must be:
- Be engaged in an economically viable activity
- Able to pay themselves a wage that meets the annual minimum wake requirements (SMIC) of €20,966.40 (May 2023)
- Engaged in an activity that adheres to public safety, health and order requirements
You will need to provide details about your work and project when applying, including proof of ability. Additionally, self-employed applicants must show proof of registration with the URSSAF (‘Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales’) for social security payments.
Where relevant, you will also need to present your authorisation to participate in a particular restricted trade or profession.
When applying for a business-based residential permission, you must provide the following documents:
- Valid Passport
- Evidence of your current status (long-stay visa marked ‘Talent Passport’, VLS-TS, or current residence permission)
- Sworn statement declaring non-polygamy (if you are married)
- Proof of address (dated within 3 months)
- 3 recent passport-style photographs
- Proof of payment for all relevant fees
- Certificate of viable and serious business plans
- Evidence of sufficient financial means
- Any additional evidence required for your circumstances (e.g. french company registrations, investments, or relevant qualifications)
Certified translations may be required for documents that are not originally in French.
Applications for business-related residential permissions generally cost a total of €225, which is made up of a €200 tax payment for the permission as well as €25 in stamp duties.
When applying for your initial long-stay visa you will need to pay €99.
Renewal of permissions costs €225.
To apply for a residential permission for business purposes, you must obtain a certification attesting to the viability and seriousness of your business plans. You will need to apply online on the simplified procedures website (‘démarches-simplifiées’).
Outside of France
Applications for residential permissions must be filed in France. If you are applying from the UK, you will first need to obtain a long-stay visa from your local French consulate. You may apply online and will need to pay the associated fee of €99.
This visa will be valid for 12 months, but you should apply for your residence permit soon after entering France.
Entrepreneurs will need to verify their VLS-TS long-stay visa with the OFII after entering France. There is no need to apply for residence permission in the first year, as this permission has the same validity duration as the visa.
You may apply for a residential permission when you are in France, which can be done online by filing for a change of status with your local prefecture or sub-prefecture. You will need to make an account and fill out the form. Be ready to provide your personal information and the required documentation. This includes proof of payment for all associated fees via tax stamps.
You will be informed when your permission is available at your local prefecture.
You must apply for your visa or permission 3 months before you plan to arrive in France or 3 months before your current permission expires.
Processing times to obtain your certification of serious business tend to be around 28 days, but actual times may vary.
Bringing Staff from the UK to Your New Business
If your business is permitted to employ staff you will. Be able to do so. If you are planning to employ staff from the UK you will need to make sure that they obtain the adequate residential permissions to live and work in France.
When hiring a new employee this will need to be declared to your local Social Security authorities within 8 days of their employment starting.
Starting a business in France requires a lot of careful consideration. Understanding the process for businesses in France, including the possible legal structures, taxation laws, and further obligations is essential to preventing any problems now or further down the line.
Seeking advice from an experienced professional can make the journey towards starting your business easier. You can call us today at 0333 305 9375 to speak to one of our experts who will be happy to advise you on any part of this process.
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You do not have to live in France to start a business there. If you decide to live abroad, you will not need to apply for a residence permission.
If you are entering France on one of the available Talent Passports, your spouse and dependent underage children will be able to join you on a family-based Talent Passport. If you are in France on a temporary residence permission, your family members will not be entitled to join you but may be eligible to apply for a residential permission of their own.