France is known for its strong economy, great links to Europe and vibrant culture. These elements make it a great destination for starting a business.
But starting a business in France isn’t as simple as just showing up and setting up shop. France is a country that has strict rules and guidelines that dictate who, what and how a person can start a business.
However, it is worth noting that this guide is mostly based on guidance for foreigners, given that starting a business in France is much easier for those with French citizenship.
This guide will take you though the step-by-step process of starting a business in France, helping you understand what you need to prepare and anything you need to consider before.
Things To Think About Before Moving To France For Business
Before moving to France, it’s important to consider a few things. These include…
Cost Of Living
France, particularly cities like Paris, can be quite expensive. The average rent for a one bedroom apartment can be anywhere from €1,500 to €3,000 depending on the location.
Whilst smaller cities and rural areas tend to be more affordable, they can also be less ideal for networking. Before moving, consider your monthly costs and how much your business will need to earn for you to sustain your lifestyle.
Language
While English is spoken in business settings, having a basic understanding of French will help you navigate everyday life. Not only that, it can be useful when it comes to networking events, hiring employees and business negotiations. Taking some French lessons before you arrive can be a good way to get started.
Business Etiquette
Working in another culture means getting to know local customs and etiquette. Whilst France is in Europe, French businesses will likely operate in a very different way from their neighbouring countries. According to Expatica, French business people will likely want to be approached and spoken to in a formal manner. However, it is worth noting that the north and south of France do have some variations based on their locations. Whilst the north tends to follow more formal hours, the south can be more rural and relaxed. Speaking to a local or spending some time in the area before you launch your business can help you ensure you’re ready to do business with the locals.
Who Can Start A Business In France?
Before you start the process of setting up a business, you first need to understand if you can legally open one. This largely depends on your citizenship:
- EU/EEA Citizens: Can start a business in France without a visa or residence permit.
- Non-EU Citizens: Need a residence permit or a visa that allows them to work in France.
You must also be at least 18 years old, have a French address and a social security number.
Choosing A Business Structure
So you’ve decided to open a business in France, and you’re eligible. Now what? Choosing the right legal structure for your business can have an impact on how much tax you pay, what the next stages of registration are, and what permits you might need to get.
Here is a list of some of the most common business structures in France:
- Micro-Enterprises: Perfect for freelancers and those starting small businesses. It is a simple way to set up a business, but both the individual and company are liable for debts.
- Entrepreneur Individuel à Responsabilité Limitée (EIRL): Otherwise known as a sole trader, it’s quick and easy to set up.
- Entreprise Unipersonnelle à Responsabilité Limitée (EURL): The best option for a single person and a single shareholder, allowing you to separate business and personal expenses. It is slightly more complicated to set up and requires admin fees and potentially legal assistance too.
- Société par Actions Simplifiée Unipersonnelle (SASU): A flexible structure with no turnover limits. It allows you to open up to multiple shareholders and offers good social security, but can be expensive to set up.
- Société à Responsibilité Limitée (SARL): A natural evolution from a EURL, a SARL is an LLC with between two and 100 partners. It limits liability to capital investment, making it popular choice for family-run businesses or partnerships among friends. It is very common for SARLS to evolve into a SASU.
- Société par Actions Simplifiée (SAS): Gives shareholders greater freedom and functions a lot like a SASU but with more people. It’s a flexible option, which makes it popular with starups.
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Starting A Business In France: A Step-By-Step Guide
Step 1: For Non EU Citizens: Secure A Business Visa
For non-EU citizens, the first step is to make sure you have the right business visa. There are a few options, depending on how long you want to work in the country. These include:
- Short-Stay Business Visa: For business visits up to 90 days, allowing people to attend meetings, perform audits and offer professional services.
- French Tech Visa: A four-year visa for tech start-ups, founders, and investors.
- To prove that you are eligible for the tech visa, you’ll have to meet a few criteria, such as: having a viable business plan, proving you have at least €20,814.73 for the project and approval from a public body in the area you want to set it up.
- Long-Stay Visa For Self-Employed Professionals: For those setting up businesses in more highly regulated areas like law, medicine, or education.
Once you have selected your visa, set up an appointment at the French Embassy or visa application centre in your home country to get it approved.
Step 2: Choose Your Business Category
When registering your business, you’ll need to select a category for it to fall under. France categorises businesses into four main types:
- Commercial/Industrial: Retail, rental or manufacturing companies.
- Trades/Artisan: Construction, crafts, and manual jobs.
- Independent Professional/Freelance: Consultants and designers who provide a service to businesses.
- Agriculture: Farming and other related activities.
Each category has a specific registration centre that you must contact. These are:
- Chambre de Commerce et d’Industrie (CCI) for commercial businesses.
- Chambre de Métiers et de l’Artisanat (CMA) is for trade/artisan businesses.
- URSSAF for consultants.
- Chambre d’agriculture for agricultural businesses.
Step 3: Register Your Business
Next, you’ll need to register your business, here’s what to do:
- Figure out which registration centre from the list above you should use.
- Get your documents together, these include: Proof of address, ID, social security card, any articles of association and other documents.
- Register online at the Formalités d’entreprises portal or visit the CFE to register your business. You will then get SIRET, SIREN, and APE numbers, which you will need to keep for any future applications.
Step 4: Choose a Company Name and Register It
Before choosing a company name, check if it is available through the Institut National de la Propriété Industrielle (INPI). If it isn’t yet taken, you can also register it as a trademark to ensure no other businesses use it.
Step 5: Set Up A Business Bank Account
Opening a business bank account in France is important to make sure you can take and send payments. There are many banks in France that allow business owners to open accounts, so make sure you shop around for the best options.
Step 6: Understand How Much Tax You Need To Pay
The French taxation system includes several types of taxes:
The standard corporate income tax (CIT) rate in France is 25%. For startups and small companies, there is a reduced tax rate of 15% for companies with profits below €38,120.
The Value Added Tax (VAT), or Taxe sur la Valeur Ajoutée (VAT), has a standard rate of 20%, applied to most goods and services. There are reduced rates of 10% and 5.5% for certain goods such as food, public transport, and books.
On top of this, a tax of 30% is applied to profits given to shareholders as dividends.
Step 7: Get To Know Employment Law (If Relevant)
Hiring employees in France means you have to stick to their labour laws.
The standard work week in France is 35 hours, with a minimum wage of €1,766.92 gross per month. Employees are also entitled to 30 days of annual leave, accrued at 2.5 days per month.
When it comes to maternity and paternity leave, French employees are entitled to 16 weeks of paid maternity leave and 11 days of paternity leave, which is in line with wider European standards.
In addition to this, some employers also help cover travel costs and food, but this is at the discretion of the company.
Starting A Business In France
Starting a business in France can be an exciting gateway to Europe, but it does come with a number of guidelines to navigate. By following this guide, you’ll be on your way to establish a successful business in France, but consult a professional if needed. Bonne chance!