Whether it’s an LLC, single-person LLC, or a branch, check out the process and other important details to know when incorporating your business in France
As the gateway to the European Union and its robust economy, France offers plenty of opportunities for entrepreneurs and startups. The French government has taken initiatives to become a global leader in innovation by investing in research and development and encouraging innovation through incentive schemes. Beyond that, France boasts an active domestic market, flexible employment regulations, a highly trained workforce, and an easy process for non-EU nationals to procure residency permits.
Types of business entities in France
For companies looking to setup or expand their business in France, there are various business structures available. The entity you choose will have implications on your liability, the amount of tax you will need to pay, and the social security systems of the income generated by your business.
Limited Liability Company (or Société à Responsabilité Limitée – SARL)
The French LLC is the most common entity for entrepreneurs establishing small and medium-sized enterprises (SMEs). The advantage is its simple structure in which the liability of the partners is limited by the share of their contributions. An LLC must appoint at least one director and one shareholder from any nationality. A minimum of €1 for incorporation is required.
Single-Person Limited Liability Company (or Entreprise Unipersonelle à Responsibilité Limitée – EURL)
A single-person LLC only requires one shareholder. The main difference is that profits are automatically taxed on income tax in the shareholder’s name.
Public Limited Company (or Société Anonyme – SA)
The public limited company is for businesses that operate at a large scale. SA requires a minimum shareholder capital of €37,000. There must be a minimum of seven shareholders of any nationality with at least three appointed as directors. Furthermore, PLCs are obligated to have an annual audit in line with statutory requirements.
Limited Joint-Stock Company (or Societé Par Actions Simplifieé – SAS )
SAS is a new type of entity in France. It is an option for those looking to set up a joint venture between a French company and a foreign partner. To incorporate this type of business entity, one director and one shareholder with €1 as the minimum capital are required. Each shareholder is only liable depending on the amount of their contribution.
The advantages of the SAS over the SA are that directors can be legal persons (companies) , and there is no limit to the number of shareholders.
You can easily set up a branch of your company in France. French corporate law adheres to the rule that a branch office can be 100% foreign owned. The scope of operations and the business structure of a branch can be dictated by the parent company. However, a branch office will have a separate management team in the country and require a corporate bank account in France.
On the other hand, branches will face French corporate taxation and a remittance tax of 30%. It is important to note that the branch office will be taxed only on the income generated in France. Branches are also considered a permanent establishment and fall under France’s double tax treaties.
Process of incorporating a company in France
- Reserve your company name at the Institute National de la Propriété Industrielle (INPI) website. If your company name is unique, you will be issued a certificate of reservation.
- Set up a French bank account for your business if you do not have one yet. Deposit the minimum share capital along with a certificate stating the amount and the share of each shareholder.
- Register your business at the Centre de Formalités des Entreprises (CFE). The CFE is the single body for statistics, tax authorities, social security, labor and health insurance which simplifies the registration process for businesses.
- Next, a company representative needs to file a registration request. Then, submit the Articles of Association, bank certificate detailing the capital deposit, the addresses of the company, and the directors of the company.
- Once completed, your company will be registered and entered in the Registre Nationale des Entreprise.
- Purchase the necessary Stamp and Company Books for accounting purposes from the Commercial Court or any authorized stores.
If you are setting up a branch of your company in France, you will need to prepare further requirements.
- Find a space in France for your branch office’s legal address and prepare a contract showing this.
- Appoint a French resident as your company representative if located outside the EU and a document concretizing this.
- Register your company with the Trade Register and tax authorities.
- Translate the parent company’s memorandum and articles of association.
- Prepare a certificate of good standing issued by the Trade Register from your home country.
How INS Global can assist your company
Expanding into the French market is an extensive undertaking. Partner with an experienced organization like INS Global for a seamless and compliant expansion to capitalize on new opportunities. Our experts are knowledgeable in the administrative process and local regulations needed to incorporate your company in France.
INS Global can also assist your businesses with our full suite of services such as PEO solutions, requirements, and payroll administration. Ready to take your first step to expand in France? Get in touch with us today.