Opening a company in France

As the second largest GDP country in the European Union, France is traditionally in the field of view of investors and entrepreneurs from all over the world. In addition to a developed economy, business people in France are attracted by a business-friendly legislative environment, a high level of social security of the population, and, as a pleasant “bonus”, a balanced Mediterranean climate.

Opening a company in France can be a rational step to take your business to the international level. Moreover, the difficulties of legal registration of a company in the country are ready to be taken over by the experts of the Lawrange law firm. The basic cost of registering a company with our support is 4500 EUR. As part of a business registration package or separately, we also handle corporate bank accounts in France. The cost of opening an account for a company is 2500 EUR.

Benefits of opening a company in France

An attractive characteristic of France as a jurisdiction for business is the prospects for development in various sectors of the economy. Among the best areas are HoReCa (hotel and restaurant business) and IT services, tourism and logistics, equipment repair and alcohol sales, real estate investment and winemaking.

Note! Developing some types of business, you can count on tax incentives. For example, such incentives for development will be received by a “green” company, whose activities contribute to the reduction of harmful emissions into the atmosphere. Tax preferences are also provided to IT companies.

Among the main advantages of France as a country for business development:

• reputation of the state among entrepreneurs and favorable territorial location;
• modern infrastructure and high solvency of the population;
• an accessible registration procedure, regardless of the chosen organizational and legal form;
• the possibility of obtaining a residence permit for three years on a merchant card (Carte de Commercant) for investments in the economy from 300,000 EUR;
• the successful experience of many non-resident investors in the French market.

What is required to open a company in France?

There are no trifles when setting up a business. Every step on the way to starting a company requires the right decisions. The need for obtaining permits (licenses) or the absence of such a need depends on the choice of the field of activity. The organizational and legal form affects taxation. The correct organization of accounting minimizes the risk of increased interest and sanctions from regulatory authorities.

Important! To open a company in France, it is necessary to enlist legal support as a matter of priority. And then you won’t have to waste time correcting mistakes, as well as regretting wrong decisions made out of ignorance.

In particular, when opening a company in France, you will have to:

• visiting the tax office for registration of activities (a tax number is assigned during registration, it is not necessary to obtain separately), the registration authority Center des Formalités des Entreprises and the commercial court Greffe du Tribunal de Commerce, where corporate disputes are resolved;
• opening a bank account and depositing authorized capital – although there are no requirements for the minimum amount of authorized capital for most OPFs, in order to ensure the trust of bankers, it is advisable to deposit 4,000 – 6,000 EUR into the account, and then use this money for the needs of the company;
• obtaining an Extrait Kbis – an extract (certificate) from the Commercial and Industrial Register (RCS30), which belongs to the Registre national du commerce et des sociétés, and then unlocking a bank account with a deposited authorized capital based on this extract.

***Note: An extract (certificate) of KBIS from the RCS register is a document confirming the existence of a company and containing information about this legal entity. The extract indicates the address of the registered entity, areas of activity, data on the governing bodies.

Forms of companies in France

An idea about the legal forms (LF) of doing business in France should be obtained before registering a company, as this is important. The choice of the LF is determined by the intended areas of activity, the number of co-founders and funding schemes. The organizational form determines the presence or absence of requirements for the authorized capital, and also affects taxation.

Important! Read the information below, and then consult with representatives of JSC Lawrange to choose the best form of organization for your specific business.

In France, as in other jurisdictions, a business can be run as a legal entity or a sole trader. The main advantage of individual entrepreneurship lies in the freedom of action without the consent of partners, but the main disadvantage is personal responsibility on business obligations and debts. At the same time, a businessman can choose the EIRL regime (individual entrepreneur with limited liability).

Unlike a sole trader, the assets of legal entities (companies) are separated from personal assets. And this is the main plus of any of the LF companies. In the event of difficulties (if the entrepreneur has not made serious mistakes in de jure or de facto management), personal assets will be protected from encroachment by the company’s creditors. But in some LFs (for example, in SNC), partners are jointly and severally liable for the company’s debts. A common negative for legal entities is the need for some initial investment for business development, as well as compliance with reporting, auditing, and so on.

Limited Liability Company – SARL (Société à Responsabilité Limitée)

As a matter of priority, JSC Lawrange experts recommend that clients consider this option for organizing a business. As an analogue of an LLC, it is suitable for small and medium-sized businesses with small investments, including commercial projects of non-residents.

SARL Specifications:

• a company is established by one or more persons (legal or natural) who are liable for obligations within the limits of the contributions made;
• minimum requirement is one director and one shareholder;
• director – without fail a citizen of France or one of the EU states;
• authorized capital – from 1 EUR, and can be freely established in the charters;
• you must have a local registered address.

Attention! Among the arguments in favor of the establishment of SARL:

1. a contribution to the authorized capital may be replaced by the provision of services or works, as well as special knowledge;
2. if the company in France conducts successful activities, you can apply for a residence permit;
3. after registration, the authorized capital of the company can be used at its discretion;
4. for business development, you can get loans in French banking institutions.

Limited liability company with one member – EURL (Entreprise Unipersonnelle à Responsabilité Limitée)

This form of business is a derivative of SARL. But the rules of the enterprise are adapted for one participant.

EURL Specifications:

• established and managed by one person (an increase in the number of shareholders is allowed, but with the transfer of the company to SARL);
• the choice of a tax payment scheme is allowed – from the profit of the enterprise or from the personal income of the founder;
• liability for the obligations of the company is limited to the size of the contribution to the authorized capital;
• bookkeeping and reporting required.

Joint stock company – SA (Société Anonyme)

Represents a business structure that must meet more stringent requirements than SARL. This option is suitable for large businesses.

SA Specifications:

• established by at least 7 shareholders (legal entities or individuals);
• shareholders’ liability is limited to the amount of contributions;
• management is carried out by the Board of Managers (Directors), which includes from 3 to 24 members (individuals only);
• authorized capital – from 37,000 EUR, half is paid upon registration, the rest of the amount – over the next five years (capital can be contributed in the form of property in compliance with the expert assessment procedure);
• an external auditor should be appointed and annual audited accounts should be provided.

Simplified Joint Stock Company – SAS (Société par actions simplifiée)

A kind of closed JSC, which is characterized by simplified administration. Such an OPF is suitable for divisions of corporations (subsidiaries). The peculiarity lies in the minimum regulation of the decision-making procedure in the legislation. Therefore, the features of management are regulated by the charter.

SAS Specifications:

• established by one or more shareholders (if there is one shareholder, then such a one-person enterprise is called a sole simplified joint stock company – Sociétépar Actions Simplifiées Unipersonnelle, SASU);
• a chairman (president) must be appointed without fail;
• the minimum amount of the authorized capital is not established by law;
• the meeting of shareholders makes decisions on the basis of the charter and regulations;
• control over management is carried out by one or more accountants-auditors.

General partnership – SNC (La société en nom collectif)

The so-called ‍partnership with unlimited liability – approaches in legal essence to partnerships in England and other jurisdictions.

SNC Specifications:

• is established by at least two members (legal entities or individuals), the limit number of partners is not determined by law;
• the minimum amount of the authorized capital is not established by law;
• shares are not freely transferable;
• all partners have unlimited liability for business obligations and debts;
• one of the managers (directors) must be a resident of the European Union.

Preparation of information and documents for company registration

To open a company in France, it is necessary to collect and process some information. Lawrange JSC team starts working after receiving the following information from the client:

1. two or three options for the name of the future company;
2. the planned structure of the enterprise – who will be: a) the beneficiary, b) the shareholders; c) director;
3. areas of activity.

Company registration is carried out on the basis of the following documentation:

• copies of the passports of the founders and the manager;
• confirmation of the place of residence of the founders (receipts for utility bills);
• certificates of non-conviction of the manager;
• the charter of the company (we prepare);
• a document confirming the appointment of a manager (we prepare);
• application for registration (filled in by us);
• receipts for payment of state duties.

Stages and terms of opening a company in France

The algorithm for registering an enterprise in France with the support of Lawrange JSC is as follows:

• Step 1. Choosing a company name.

Names proposed by the client are checked for originality and compliance with the requirements of the law. Among them, the admissible is determined. The verification period is no more than one day. In this case, a suitable name is reserved.

• Step 2. Preparation of constituent documentation.

Initially, the issue of the business structure (organizational and legal form) is being resolved, taking into account the prospects for obtaining tax benefits and other preferences from the state. Then, in accordance with this structure, a charter is formed (with a translation into French). The issue of a legal address is also being resolved.

• Step 3. Opening a bank account to deposit the authorized capital.

It is advisable to deposit to the account within the limits of 5,000 EUR, even if the requirements set the size of the authorized capital from 1 EUR. The money will be available after providing the bank with an extract (certificate) on the registration of the company.

• Step 4. Entering information about the enterprise in the Commercial and Industrial Register and the National Register of Institutions and Enterprises.

Registration of a company entails obtaining a taxpayer number. Also, the company must obtain certificates of compulsory medical insurance, old-age insurance for some specialties and for the payment of maternity benefits. You must join the family allowance system. If it is planned to hire staff, an application is submitted to the labor inspectorate.

***Note: You do not need to visit the tax office separately to pass the tax authorization. After registering a company, a welcome letter will come from this service, in which the TIN will be indicated.

• Step 5. Publication of a notice of the opening of the company in the official media.

We are talking about such specialized periodicals as Le Figaro and Le Monde. Information about the types of activities and a brief description of the company are published.

• Step 6. Obtaining an extract (certificate) Extrait Kbis.

The document confirms the successful completion of the registration procedure, and contains the registration number, which is then used in all documents of the company. On the basis of Kbis, a corporate account with the previously contributed authorized capital is activated.

• Step 7. Obtaining permission (licenses) for certain types of activities.

Company registration terms are up to 30 days

Opening a company account in France

French bankers strictly adhere to the rules “know your customer” (know your customer) and AML requirements. To open an account, you should: a) first study the requirements of a particular bank; b) collect the necessary documents and information; c) establish a dialogue with representatives of a banking institution in the right tone.

Important! Experts of JSC Lawrange know about all the nuances of opening accounts in France, so they help clients save time and nerves.

The cost of services for opening an account in France is 2500 EUR.

The basic conditions for issuing and maintaining an account are as follows:

1. You should submit to the bank: a) an identity document; b) confirmation of the address of residence in France or another country of the founder of the company (a receipt for utilities, a lease agreement, a certificate from a notary on the presence of real estate in France will do); c) confirmation of residence in France (!) of the director; d) the articles of association of the company; e) business plan (if you plan to apply for loans).
2. You will have to pay about 40 EUR monthly for servicing a commercial account.
3. The term for opening a corporate bank account varies from two to six weeks. The terms increase when the bank requests additional documentation and information from the client.
4. Often, a bank account is opened before the registration of the company to deposit the authorized capital, and then “unfreezed” after receiving by Extrait Kbis. But it is possible to open an account even after the registration of the company.

Taxation of legal entities in France

France has a reputation for having a confusing tax system. At the same time, the operation of such a tax system makes it possible to efficiently fill the state budget and ensure a high standard of living for the population.

Important! From January 1, 2022, the corporate tax rate in France was reduced from 26.5% to 25%. Moreover, corporate income tax rates are planned to be further reduced.

The standard VAT rate in France is 20%. But when selling certain products or providing certain services, this rate increases or decreases: 22% – for the sale of luxury goods, 10% – for the provision of transport services, running a hotel and restaurant business, showing theatrical performances and selling food products, 5.5% – for the sale of medical products and books, 2.1% – for the provision of medical services.

Legal entities pay tax on capital gains and tax on dividends. Rates vary depending on a number of factors. For example, 88% of capital gains are exempt from tax when shares are sold if they have been in the possession of the seller for two or more years.

If an enterprise introduces new technologies, follows the path of saving energy resources and raw materials, increases employment in the country, provides significant export volumes outside the EU, and so on, it can receive tax benefits from the state.

Conclusion

France is not a country where you can save on taxes. But this is a promising platform for entering the most desirable markets on the planet. The firm is immediately provided with credibility in the eyes of counterparties.

In recent years, there has been a tendency in the country to simplify and improve the design and conduct of business. The corporate tax rate is gradually being reduced, and this perfectly complements the overall picture of a country loyal to foreign business with limitless opportunities. Lawrange JSC experts recommend opening a company in France to those who choose European prestige, status and willingness to act within the rules strictly established by the state.

FAQ

How much does it cost to open a company in France?

The cost of a package of services for registering a legal entity in France with the support of JSC Lawrange is 4500 EUR.

Who can open a company in France?

A citizen of any country can become the founder of a company in France. French citizenship or a residence permit in the country is not required to organize a business. The only caveat is that the package of documents for registering a company should include confirmation of the address of residence (from the country in which the founder lives).

Can a non-resident become a director of a company in France?

Only a citizen of France or one of the countries of the European Union can be appointed as a director (manager) of a legal entity in France. However, in some cases exceptions are allowed.

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