Setting up a Business in France
In the guide below we will look at how to set-up and register a business in France, listing the different departments and procedures involved.
Like most business-oriented projects, creating a business in France is subject to a lot of bureaucracy and you will have to be well prepared beforehand, and know in detail how to register a business in France.
In this guide we will look at:
- Registering your business
- Choosing the correct business structure
- Opening a bank account
- Understanding business tax
- Obtaining a SIREN or SIRET number
- APE code
- Securing your intellectual property
- VAT registration
- Recruiting in France
1. REGISTERING YOUR BUSINESS
There are three different chambers which specialise in setting up new businesses and have advisors that will assist those wishing to create or take over businesses situated in that Department.
When you set up a business you have to register your business either:
- At the Chambre de Commerce et d'Industrie if it is a commercial activity,
- At the Chambre des Métiers if it is a handicraft activity
- At the Chambre d'Agriculture if it is an agricultural
You can also seek advice from a "Notaire" or a chartered accountant before registration, in order to choose the most appropriate way to carry out your business.
2. CHOOSING THE CORRECT BUSINESS STRUCTURE
In France, three main corporate structures allow the development of a commercial venture whilst securing limited liability for the shareholders: SARL, SA and SAS.
SARL (Société à Responsabilité limitées) or called EURL in case of a sole partner
- Most suited for small operations (from 1 to 100 partners; minimum of 1 euro for the share capital)
- Often chosen because of the set of mandatory regulations which constitute a standard set of rules for the articles of association.
- However, there is almost no flexibility (no board, no preferred shares, etc.), the partners' names must appear on the articles of association and the transfer of shares is restricted.
SA (Société Anonyme)
- A similar structure to a public company listed on the stock exchange and is therefore most suited for big operations (minimum of 37,000 € for the share capital and at least 2 shareholders).
- The law provides for many mandatory provisions, including governance (CEO with a Board of directors or an executive committee with a supervisory board) and there is very little room to adapt the articles of association.
SAS (Société par Actions Simplifiée) or called SASU in case of a sole partner
- This the most flexible form of company with very few mandatory rules.
- The articles of association can be tailored to serve both small (no minimum share capital and one shareholder possible) and big operations.
- It is possible to adapt freely both the governance and the share structure.
3. OPENING A BANK ACCOUNT
Opening a bank account is a fairly straight forward procedure if you have all the documentation that is required. The following documents need to be provided in order to open an account:
- Titre de séjour or long stay permit
- Proof of residence in the form of a utility bill appertaining to the last 3 months or a notaire's "attestation" certifying you own a property in France
- A copy of your employment contract or proof of revenue (pensions )
Once your documents have been processed you will receive various documents or contracts for each account that you have opened.
You will be issued with a RIB (Relevé d'Identité Bancaire) that contains all your banking information, account numbers etc. These RIB's are very useful as they are always asked for when opening accounts or for debit orders.
Bank charges for bank cards do occur as well as monthly administrative fees that vary according to banks. If you happen to exceed your agreed credit limit, bank charges "agios" will be charged.
4. UNDERSTANDING BUSINESS TAX
It is imperative to work through the tax consequences of your specific project before deciding whether to invest or move.
French tax regulations and laws are very complex and therefore it is greatly encouraged to seek professional advice either with a "Notaire" or with a chartered accountant.
The most common social charges for an independent worker are:
- The RSI ("Régime Social des Indépendants")
- The URSSAF (« Union de Recouvrement de Sécurité Sociale et Allocations Familiales « )
- The Pension Funds (many different pension funds according to your profession)
- The MSA ("Mutualité Sociale Agricole") for all the agricultural activities
5. OBTAINING A SIREN OR SIRET NUMBER
The SIREN number is the unique identification number for each business. When registering or declaring an activity with un centre de formalités des entreprises (CFE), any company or individual entrepreneur is assigned this 9-digit number.
As soon as registration comes into effect, the INSEE sends a certificate of registration with the Siren number, which identifies the company.
The SIRET number (composed of 14 digits), is that which uniquely identifies each establishment of the same company
6. APE CODE
- The APE code identifies the branch of activity of the company or self-employed
This is also received from the INSEE along with your SIREN and SIRET.
- The APE code is used to determine the applicable collective
- In the event of a change of main activity, it is also possible to request the allocation of a new APE
7. SECURING YOUR INTELLECTUAL PROPERTY
- An assignment of IP rights will need to conspicuously describe the rights that are being transferred and to define the scope of application of the assignment, the duration of the assignment and the territory on which it applies.
- The assignment will also need to define the price agreed upon for the transfer of such IP rights.
- You should avoid any waiver of moral rights in your contracts, as moral rights are unalienable in France
8. VAT REGISTRATION
- As a business established outside France, you may have to apply for a VAT registration number in France to the extent that you are regarded as the person responsible for VAT payment vis-à-vis the local tax
- Every company liable for VAT in the European Union (EU) has an individual tax identification number issued by the tax authorities.
- This number must appear on the company's invoices, declarations for trade in goods and VAT
- For companies domiciled in France, the number consists of the FR code, a 2-digit code and the company's Siren number (9 digits)
Documents Required for Companies established in the EU
- Recent incorporation certificate or excerpt of trade register;
- Articles of association (with a non-binding translation in French of the business purpose of the company)
- IMP form to be completed in 2 original copies
- VAT number in EU member state
Documents Required for Companies established outside the EU
- Recent incorporation certificate or excerpt of trade register;
- Articles of association (with a non-binding translation in French of the business purpose of the company).
9. RECRUITING IN FRANCE
- In France, it is important to understand the significance of Positions and the corresponding power levels are clearly defined.
- Most communication lies underneath the surface and is a complex network of personal ties and alliances that help people to accomplish matters.
- The importance of personal networks cannot be underestimated, doing business without knowing the person is out of the question.
- If you want to hire the right person for the job, it is crucial to find some common ground.
- Graphology is still one of the selection tools used in the application process in France. So be prepared to receive a handwritten application letter of about 15 to 20 lines, which focuses on the applicant's most recent activities and demonstrates with examples why they consider themselves the right person for the job.
- Around 75 percent of French employers request a hand-written application letter.
Article brought to you by the FRANCO-BRITISH CHAMBER OF COMMERCE AND INDUSTRY.
The primary objective of the Chamber since 1873 has been to promote commercial exchange between France and the United Kingdom. Their Members range from global multi-nationals to small and medium sized firms wishing to develop their cross-channel activity.
- Their approach is twofold:
- Firstly, the Chamber is a unique observatory of the current economic and political environment, which helps businesses monitor and prepare for external events, such as Brexit, amongst
- In addition, the Chamber is a powerful tool used to create new business opportunities by renewed networking.
For more information please visit https://francobritishchamber.com/