If looking for jobs in France is not an option for you and you are thinking about how to start a business in France, this article will help you.
Starting a business is a big step for several would-be entrepreneurs, but it doesn’t have to be so scary if you have the correct information.
According to the Ernst & Young G20 Entrepreneurship Barometer report 2013, starting a business is less complicated in France than it is in the majority of other G20 nations because it is less expensive, requires fewer steps, and takes less time.
For those interested in wanting to start a business in France, we’ve compiled a helpful checklist of the steps you’ll need to take.
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The Fundamentals To Start A Business In France
Anyone can start a business in France. To own a business in France, you DO NOT need to reside there or be a citizen of the EU. Even if you reside and work outside the EU, you can still register a business address in France and start a company there.
That can entail setting up a virtual office or locating physical space for your company. You don’t necessarily need to purchase a home or change your citizenship! Below, this guide provides more information about starting a business in France.
Choose a category for French businesses
Businesses in France fall into one of five categories:
- industrial or commercial, such as owning or operating a shop, café, or factory;
- Trades/artisans, which include construction trades, manual labor, and some manufacturing;
- Independent or freelance professional, such as a dentist, writer, interpreter, or musician, who works alone and renders a service;
- Commercial agent, where you act on behalf of another company, such as negotiating or selling;
Each of them has a separate registration office (Centre de Formalités des Entreprises, or CFE), which is situated in each French department. You must register your company with the relevant CFE and inform them of any changes.
French legal structures for businesses
You must choose the business and tax structure that is best for your company. In France, there are two varieties of legal business structures:
1. Sole trader (enterprise individuelle or EI);
You and the company are one legal entity under this legal framework. Your professional and personal assets merge, but you can make a seizure declaration to protect your home.
You can establish a micro-enterprise under this legal structure.
The old auto-entrepreneur and micro-enterprise systems are combined in this. See our guide to becoming self-employed in France for more information on micro-enterprises.
You can also choose to operate as an EIRL (Entrepreneur of Individual Limited Liability), which keeps your personal assets separate. You trade under your personal name in both cases, though you can adopt a company or trade name.
If you apply for EI status, you must file a personal income tax return and pay taxes under the appropriate heading for your business: industrial and commercial profits (BIC) for merchants and craftspeople or noncommercial benefits (BNC) for freelancers. You have the option to pay corporate tax if you choose EIRL status.
2. Company (société), such as an SARL, EURL, SA, and SAS;
A business (société) you decide to form will be legally independent of you. Your private property is shielded from the creditors of the business. If you use the corporate property for private gain, you risk legal action.
Your business needs a unique name, address, and a minimum amount of assets. You represent the company, not yourself when you act. You could be subject to régime du reel or company tax (IS).
Unlike setting up a single proprietorship, forming a corporation is more complicated. It requires designating officers, filing legal notices with the press, and filing your status with the tax office.
There are two primary sorts of businesses:
- A EURL, or Enterprise Unipersonelle à Responsibilité Limitée, is administered as a limited liability single shareholder corporation by a gérant, who may or may not also be the business’s managing director or company secretary and is either salaried or not.
- A limited liability business called a SARL, or Société à Responsibilité Limitée has two to one hundred partners. Each party’s liability is capped at their capital investment.
How to Start a French Business
The first step in starting a business is registering it. Before they can operate, all businesses must register. This must be done via the Centre de Formalités des Entreprises (CFE) or online at www.guichet-entreprises.fr.
There are distinct CFE for each type of business activity, and your application must go through the appropriate CFE. You can locate your local offices by visiting their websites. As an example:
- Chambre de Commerce et d’Industrie (CCI), if you want to open a shop or a commercial company that does not involve “craft, trades, or artisans.”
- Chambre de Métiers et d’Artisanat (CMA), for manual workers and artisans.
- Les Greffes des Tribunaux de Commerce for regulated professional firms.
- URSSAF for professionals and intellectual services such as translators and web designers.
Click on the appropriate CFE for your type of business from the list below.
Documents required for business registration in france
Depending on the nature of your business, you may need to register the following documents:
- proof of address (EDF utility bill, rental agreement);
- Valid ID (valid passport or national travel ID, residency card);
- Evidence that your spouse is aware of liability.
Create an online CFE file by clicking here.
If you start a business in France, you may need to deposit funds with a notary or bank, draft statutes (see this information at APCE), appoint a CEO, and publish a notice of incorporation in a legal gazette.
What takes place at CFE
The CFE will process your application and forward your supporting documentation to the necessary organizations. Depending on the nature and scope of your company and whether you want to hire staff, these could include:
- The National Institute of Statistics and Economic Studies (INSEE), will assign SIRET, SIREN, and APE numbers and register your business with the national business directory (see below);
- the tax office, Centre des Impôts;
- the commercial court register, or Registre du Commerce et des Sociétés (RCS);
- the labor office (Direction Departemental du Travail & de L’emploi);
- social security;
- Unemployment insurance, pension, and employment office (Pole Emploi); 6. health insurance (Caisse Regionale D’Assurance Maladie);
- Greffe du Tribunal de Commerce if you’re incorporating a business or running a commercial enterprise;
- If you intend to practice a trade or craft, consult the Répertoire des Métiers.
- Caisses Sociales and Inspection du Travail if you intend to employ others.
French Business Registration
A unique 14-digit registered number made up of a SIRET and SIREN number will be given to you when you receive the “Extrait Kbis” (the certificate of incorporation). This number serves as your company ID and must be written on all official documents, invoices, and websites. These are the key figures you require when opening a business in France.
The SIRET consists of your 9-digit SIREN number in addition to a 5-digit code unique to your business. Additionally, you will have an APE (Activity Principal of the Enterprise) or NAF code that designates the primary activity of your company.
When the Kbis arrives, your bank manager will be able to activate your business bank account and unblock your share capital. The tax office will also send you a welcome letter with your VAT number and contact information. Your VAT number begins with the letters FR and is followed by a two-digit code and your SIREN.
Businesses That Are Regulated in France
Accountants, veterinarians, hairdressers, builders, and even wine dealers are subject to stringent regulations in France. If your business is in one of these regulated professions, you must register with the relevant organization.
Before you can work, you may need to demonstrate that you have the necessary qualifications, experience, and insurance liability.
Check the APCE website to see if the business you want to start is regulated – simply click on the adequate letter of the alphabet to find the field you need.
Check The Name Of Your Company
The Institut National de la Propriété Industrielle (INPI) offers a free online check to see if the name you want to use for your business is already being used by another business.
If you want to safeguard your own company name or logo, you must file a trademark application (dépôt de marque) with the INPI; otherwise, if someone else later begins using the same name or logo, you will lose your legal right to use it.
Check sure the domain name you choose is available through the AFNIC, the registry for.fr domain names when you create a website.
Establishing An Offshore Business in France
There are many significant benefits and drawbacks to consider when setting up an offshore company, or one that is registered, created or incorporated outside of your place of residence.
In all of the well-known offshore financial centers and tax havens around the world, offshore incorporation is a simple procedure. They can offer the business and its owners a variety of advantages.
Employee Recruitment In France
If you want to start a business in France, you should be aware that hiring workers is expensive in France. If you decide to hire personnel, keep in mind that in addition to paying social costs for your business, you will also have to pay social charges for your employees.
Accordingly, you must pay employees a net salary in addition to an additional 75% in employers’ and employees’ contributions (companies pay the employee contributions).
France’s labor laws provide excellent protection for workers. Get expert guidance on drafting employment contracts, workplace regulations, employment law, and the French minimum wage.
One aspect to consider when you want to start a business in France is the language. Even though roughly two-fifths of the population understands English sufficiently, many more do not. Even those who do will be more receptive to your business if your communication and marketing are entirely in French.
It is a good idea to research local customs and market trends regardless of the country into which you are expanding, but the French are more receptive to foreign businesses that make an effort to communicate and operate in their culture.