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How to register a company in France?

Modern France is highly attractive to foreign investors because it is characterised by a strong, crisis-resistant economy, a high business culture, a developed financial market, and effective mechanisms for protecting intellectual property.

According to some reports, there are now several tens of thousands of commercial organisations with foreign capital operating in France. The number of such companies is growing every year as more and more foreign entrepreneurs move to the country to start a new company or move their business to France.

Why will it be advantageous for you to open a company in France?

Foreign businessmen choose this country to access unique advantages. Here are the main ones:

Powerful economy

France is one of the top ten largest economies in the world. The French economy ranks second in the European Union, second only to Germany. The economic prosperity of the state, combined with its resistance to financial crises, allows French entrepreneurs to systematically develop their enterprises, attract additional financing and participate in long-term projects without fear.

Access to multi-million dollar markets

The French sales market attracts businessmen not only because of its huge scale, but also because of its high solvency. Moreover, companies registered in France can offer their goods and services on the common European market. The development of international trade is facilitated by the absence of currency control in this country.

Well-developed world-class infrastructure

Commercial enterprises are also interested in this country due to its strong transport infrastructure, including modern seaports, high-speed railways, extensive road network and international air service.

Technology and innovation

Modern technologies play an important role in the French economy. The French government invests enormous funds in scientific research and technical development, and creates favourable conditions for those companies whose business is based on innovation. Paris, for example, is home to a huge number of high-tech start-ups.

Support for business and investment at the state level

The French authorities are constantly coming up with new legislative initiatives aimed at attracting foreign business and investment to the country. Such measures include:

  • Compensation of R&D companies through incentives to reduce tax payments by 30 per cent;

  • Immediate granting of special residence permits for 4 years to foreign entrepreneurs, investors, innovators and their dependents under the government’s Passport Talent programme;

  • France has signed international double tax treaties with other jurisdictions.

Skilled labour force

France is famous for its education system and world-renowned universities. In this country, a foreign businessman will always be able to find hard-working employees with diplomas from the best European educational institutions and excellent professional training.

A convenient country to relocate to

France is not only a favourable jurisdiction for registering your foreign company, but also one of the most comfortable countries in the world. Every year, thousands of enterprising foreigners move with their families to this country to ensure a high standard of living and security for themselves and their loved ones.

Types of companies in France

The choice of organisational and legal form depends entirely on the task that the foreign citizen plans to solve with the help of a French company. Those foreign entrepreneurs who plan to do business directly at the place of registration or abroad choose the following types of commercial organisations:

  1. Société à responsabilité limitée (SARL) — limited liability company

    According to some estimates, up to 2/3 of corporate structures in France are SARL or a type of company limited by guarantee — EURL. This option is ideal for registering a small or medium-sized business.

    The owners of this company are liable for its debts only to the extent of their contribution to the authorised capital. At least 2 founders are required to open a SARL in France

    Registering a French limited company is relatively inexpensive. There is no minimum amount of share capital for these corporate structures, so it can be as little as €1, although a French bank may refuse if you try to open a business account with this amount.

    To avoid rejection and get it right, you can turn to the experts at Imperial & Legal. Our team has been opening European bank accounts for many years. Our specialists are always ready to provide professional advice on all your questions — we know very well what conditions you need to fulfil to open a bank account in Europe.

    The French Société à responsabilité limitée has non-obvious opportunities for tax optimisation. For example, the director of a SARL may be the founder. In this case, the owner manages the business without a salary, relying only on dividends, and thereby obtains substantial savings on related tax payments.

  2. Entreprise unipersonnelle a responsabilité limitée (EURL)

    A type of French limited liability company. It is characterised by a single founder.

  3. Societe Par Actions Simplifieé (SAS) — a simplified type of joint stock company

    This type of company is favoured by experienced foreign entrepreneurs when they plan to launch their business in France.

    Unlike an ordinary joint-stock company, SAS has greater flexibility in management. In its charter, such a company can freely regulate a lot of parameters: the number of founders, the amount of authorised capital, appointment and dismissal of management, the procedure for decision-making by the founders, etc.

    SAS must have at least two founders. The founders of a simplified joint-stock company can be both individuals and legal entities, including tax residents of other countries.

    A variation of this type of company with a single founder is denoted by another abbreviation — SASU (from French “Société par actions simplifiée unipersonnelle”). Simplified joint stock companies with a single shareholder are convenient for opening a branch of a foreign company in France, as in this case 100% of the shares will belong to the head office.

    Shareholders have a limited liability for the results of such a firm, extending only to their contribution to the authorised capital. The amount of the authorised capital of SAS and SASU must not be less than €1. In practice, it is usually stated to be around €500-1,000.

    A simplified joint stock company is managed by a president. The president of such a firm must be paid an appropriate salary (with all associated tax and social security benefits), whether the position is held by the owner or an employee.

  4. La société anonyme (SA) — a joint stock company

    This type of commercial organisation in France is the domain of large businesses. The liability of shareholders in such a firm is limited to their contribution to the share capital.

    French and foreign nationals and companies can be founders of an SA. To establish a closed joint stock company, at least 2 founders are required. A public SA must have at least 7 shareholders.

    The minimum amount of the share capital of la société anonyme is €37,000. The amount of the share capital must be stated in all outgoing company documents. The founders may pay it in cash or in kind, for example with real estate owned by them.

    SAs are governed by a board of directors with between 3 and 18 members. The composition of the board of directors is appointed at the company’s shareholders’ meeting.

  5. Société en nom de collectif (SNC) — general partnership

    This form of business organisation in France is used much less frequently than corporate structures, because in a general partnership the liability of the founders for the debts of the firm is full and joint and several.

    The establishment of an SNC requires at least 2 partners, which can be people and organisations. General partnerships are usually managed by their founders, unless the articles of association of the firm provide for a separate director (from among the partners or third parties).

    The advantages of Société en nom collectif are the absence of minimum share capital requirements, the relative ease of registration of such a company, and pass-through taxation. The latter implies that partnership profits are not taxed at the corporate level, but after their distribution, tax liabilities arise for each partner individually.

  6. Societé en Commandite simple (SCS) — simplified limited liability partnership

    Such a partnership can be formed by 2 founders, one of whom will be a general partner and the other a limited partner.

    A limited partner usually does not take part in the management of the company and risks only its contribution to the share capital of SNS. A general partner, on the other hand, may not contribute to the share capital, but is actively involved in the management of the partnership and is fully liable for the results of the company’s business activities with all its assets.

    A peculiarity of partnerships in France is also that any changes in the structure of the authorised capital can only be made with the consent of all the partners in the partnership.

  7. Société Civile Immobilière (SCI) is a civilian property management company

    Foreign nationals do not register an SCI in France to run a traditional business. Société Civile Immobilière is inherently a convenient legal tool. With its help, large foreign owners of French property solve several problems at once:

    • Effectively dispose of real property between heirs to nip potential conflicts in the bud;

    • The legal way to avoid paying French wealth tax;

    • If a foreign-owned company rents out its French property, SCI and double taxation avoidance agreements can be used to reduce the cost of tax payments. The fact is that the profits of Société Civile Immobilière are only taxed after they have been distributed to the company’s partners.

    To open an SCI in France you need at least 2 founders. There are no restrictions regarding partners – they can be people or organisations, either from France or abroad.

    The size of the authorised capital of a civilian property management company is not regulated in any way. As a rule, the founding partners make a cash contribution or transfer their real estate in exchange for shares in the company. The term of existence of Société Civile Immobilière is limited to 99 years.

Registering a company in France step by step

You will find it much easier to set up a company in France if you are advised at every stage by experienced corporate law specialists. With reliable legal support, the incorporation process can be completed in just a few steps.

Step 1: Preparation

At the preparatory stage, the entrepreneur will have to solve several tasks at once:

  • It is necessary to choose the most appropriate type of French company for the business to be opened. It is worth noting here that some commercial activities in France require a licence;

  • The firm must have an original name that is not the same as the names of organisations already registered in France and not similar to the trademarks registered in the country;

    The company name can be checked on the INPI (Institut national de la propriété industrielle) website. If it is sufficiently unique, it is possible to reserve it for a while by obtaining a certificate on the website;

  • The company will require a registered office in France. If you do not plan to do business at the place of incorporation, you can rent a so-called “virtual office” at the real address of the intermediary company to which official letters and notices will be sent;

  • The internal structure of the company should be decided and management appointed. What does this mean in practice? There must be complete clarity on the amount of the authorised capital, the number of founders, the size of their contribution to the company’s authorised capital, and the form in which that contribution will be made. In addition, the company’s decision-making procedures must be established and a director appointed who will be actively involved in the business registration process;

  • All the previously discussed parameters of the future company are reflected in its articles of association, which should be drawn up at the preparatory stage of registration.

Step 2: Contribution of authorised capital

The founders of a French company contribute their share to the share capital of the company. As an example, we will consider a limited liability company. The contribution to the share capital of a SARL can be made in cash or by transferring ownership of assets owned by the founders: property or intangible assets such as unique technology, professional expertise or connections.

The declared share capital of a limited liability company can be anything, as long as it is greater than €1. Of course, serious entrepreneurs specify more substantial amounts of share capital in order not to complicate their work with other companies and French credit organisations in the future.

When each founder has contributed his share (or has committed to pay his part of the share capital), the manager will have 8 working days to deposit at least 20% of this amount into a specially opened account in a French bank, or into the account of the notary in charge of registering the firm.

The share capital is paid before the company’s articles of association are signed and before its official registration is finalised. The entrepreneur has access to the share capital of his company after it has been registered in France. As a rule, the money is transferred from a deposit account or a notary’s account to the current account of the newly incorporated company.

Step 3: Signing the charter

Once the authorised capital has been paid, all the founders must sign the articles of association or the notarial deed of incorporation that replaces them. The signatures can be done in person, at a pre-arranged meeting with a French notary, or they can be done remotely using an electronic signature.

Step 4: Publish an announcement about the creation of a new company in the official press

The particularities of incorporating a new business in France are such that it is required to publicly announce the incorporation of a new company by means of an announcement in one of the official sources: the Journal of Legal Announcements or an online legal news service.

Step 5: Official registration of the company in France

A new French company is deemed to be already established when the founders have contributed their shares to the share capital, appointed managers and signed its articles of association. In practice, however, it cannot operate without formal registration with the National Register of Companies (NRE), the Commercial and Industrial Register (RCS), the tax office and the social security authorities.

The official entry procedure may vary slightly depending on the type of business organisation. In the case of a company started by a foreign investor (for example SAS or SARL), the declaration of incorporation, together with the accompanying documents and the fee cheque, is sent to the Chancellery of the local commercial court (Greffe du Tribunal de Commerce). Nowadays, it takes 48 hours for the clerk’s office officials to make a decision on the official registration of a business.

How long will it take to register a company in France?

With an experienced business registration agent, the preparatory stage takes no more than 2 working days, the publication of the creation of a new company is carried out within 5-7 working days, and no more than 2 working days are spent on the official registration in the Commercial Court Chancery.

Thus, with competent legal support of each stage, it takes no more than 10 working days to register a company in France.

Corporate taxation in France

The current corporate income tax rate in France is a weighty 25%.

If an SME company is 75% owned by individuals (or other commercial organisations that can be classified as SMEs), the first €38,120 of corporate income is taxed at a reduced rate of 15%. Anything above this amount is subject to a 25% tax.

The VAT rate charged on most goods and services in France is 20%. There are reduced VAT rates that apply to certain goods and works of French companies:

VAT%Goods and services
Standard rate20Most goods and services in France.
Reduced rate10Construction work for private customers, firewood, unprocessed agricultural products.
5,5Food, hygiene products, books, cinema and theatre tickets, equipment and services for disabled people, building work to improve housing insulation.
0Vaccinations and tests for coronavirus infection.

French companies also pay real estate tax (rates vary significantly depending on the type of property and region), social tax on wages paid to French employees (from 40 to 50% of the amount accrued), as well as many small local taxes levied at the district or municipality level.

Our company’s experts have explained how the French pay taxes:

  • The personal income tax rate for French tax residents is progressive and, depending on the amount of income, can vary from 0 to 45%. For foreign residents who receive income in France, the personal income tax rate is 20% (income up to and including €26,070) or 30% (anything above €26,070);

  • The tax on dividends in this country is a weighty 30 per cent, of which 12.8 per cent is tax on the individual’s income and 18.2 per cent on his social contributions.

Since the founder of the company, who is not a French tax resident, pays a dividend withholding tax of 12.8%, one optimisation strategy is that the French SARL’s foreign domiciled majority manager only receives dividends for his services.

French and foreign residents are also subject to property tax and wealth tax. As the latter is imposed on all property with an aggregate value exceeding €1.3 million, in SCI companies registered in France, high-value property is distributed among several partners so that their share does not exceed a certain threshold.

Unfortunately, in the format of a short article it is difficult to cover absolutely all the nuances of company registration in France. Therefore, if you have not found the answer to your question, make an appointment for a consultation with the lawyers of Imperial & Legal.

In our work we are guided by the client’s interests and select individual solutions that take into account all the needs of a start-up French entrepreneur. With our reliable legal support, you will register your company in France in a short period of time, optimise your taxes and successfully submit your first corporate accounts.

FAQ about starting a company in France

What documents must an entrepreneur provide to a business registration agent to register a company in France?

The list of documents required for the registration of a French company by a foreign entrepreneur may include:

  • Birth Certificate;

  • A passport;

  • Documents proving the business person’s place of residence. For example, a bill from a utility company;

  • Marriage certificate and/or divorce certificate;

  • Information for completing the statutory documents.

Can opening a civilian property management company be the basis for a business visa to France?

No, SCI registration is not sufficient to grant its founder a residence permit in France.

How do I register a new French firm with the tax office?

Registration with the tax authorities can be done online on the website of the relevant authority. If you registered your company at the Chancellery of the Commercial Court, after some time, a letter will arrive at your registered office from the French tax office inviting you to register within 30 days of the letter being sent.

After registration, your company will receive a SIREN — tax number, which will be required not only for filing tax returns, but also for opening a current account in a French bank.

When do French SARL, EURL, SAS and SASU require an audit before preparing a financial report?

Your company in France will need the services of an auditor if at least 2 of the following 3 statements are true:

  1. Your company’s turnover in the reporting period, excluding taxes, exceeded the €8 million mark;

  2. Your company’s total pre-tax balance sheet totalled more than €4 million;

  3. During the financial year, your firm had more than 50 employees.

Which business entities qualify as small businesses for the purposes of applying the reduced corporate tax rate by the French tax authorities?

At a reduced corporate tax rate of 15%, the first €38,120 of the profits of small corporations are taxed if their turnover in the accounting period did not exceed €10 million (for financial years beginning after 1 January 2021). In accounting years ending before 1 January 2021, the maximum turnover of a small company must not have exceeded the €7,630,000 mark.

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