Starting a business in France, one of the world's largest economies, is a unique opportunity for entrepreneurs and investors. By registering a company in this country, you can take advantage of numerous benefits, such as access to the vast European market, advanced infrastructure, and government support.
There are various types of business structures in France, each designed to suit the specific needs and objectives of your business.
Company Registration Process in France
The process of company registration in France involves multiple steps that must be carefully followed to ensure the legal establishment and success of your business. Below, the main steps are explained in a step-by-step manner.
Preparing a Business Plan
The first and most crucial step in establishing a company in France is preparing a comprehensive and detailed business plan. This document helps you define your business’s mission, objectives, and strategies.
Additionally, it plays a vital role in attracting investors and gaining the trust of bank managers. Since French is the official language used in administrative procedures, the business plan must be translated into French.
Choosing the Legal Structure for Your Company in France
After preparing your business plan, you must choose the legal structure of your company, as previously explained. Depending on the type of activity and investment conditions, different options are available, the most common of which include:
EURL
SARL
SAS
Branch
Opening a Business Bank Account in France
Once you have chosen the company structure, you need to open a business bank account in France. Due to strict banking regulations, the bank manager may require documents such as a verified business plan, identity documents, and financial information.
Having a strong business plan at this stage is essential, as the bank must ensure the legitimacy and objectives of your activities.
Depositing Initial Capital in the French Bank Account
For certain types of companies, an initial capital deposit is required in the company’s bank account.
For EURL, SARL, or SAS companies, the minimum required capital is €7,500, but an initial deposit of €4,000 is also possible.
This amount is usually locked until the company registration certificate (Kbis) is issued. However, after completing the registration process, the funds become accessible.
Publishing a Legal Announcement for the New Company
According to French law, every newly established company must be publicly announced. This notice is published in an official journal such as Les Echos or Le Parisien to formally declare the company’s activities.
Completing Administrative Procedures and Company Registration
At this stage, the required documents must be submitted to the relevant authorities:
INSEE (National Institute of Statistics and Economic Studies): To obtain the company identification number.
French Tax Authority (des Impôts): To assess tax status and manage legal payments.
Commercial Court: For the official registration of the company in the French legal system.
Social Security Office: If the company hires employees, registration with this office is mandatory for insurance and social security contributions.
Receiving the Company Registration Number
After completing all the steps and final approval, your company will receive a 14-digit registration number, which includes SIRET and SIREN. This number officially identifies your company in France, allowing you to legally start your operations.
Advantages of Company Registration in France
Registering a company in France, one of the world's leading economies, offers numerous benefits for investors and entrepreneurs. Below, we explore some of the most significant advantages of setting up a business in France.
Large Consumer Market
As the second-largest consumer market in the European Union, France provides exceptional opportunities for new businesses.
With a population of over 67 million and strong connections with other European countries, it serves as a key gateway to potential international customers. Additionally, France's diverse consumer culture and high-income levels contribute to the success of various businesses across different industries.
Intellectual Property Protection
One of the most important advantages of company registration in France is the strong protection of intellectual property rights. The country has one of the most advanced legal systems for safeguarding patents, trademarks, and intellectual assets.
Companies and entrepreneurs can protect their rights against potential infringements through France’s trademark and patent registration laws. This is particularly crucial for innovative and technology-driven businesses.
Tax Incentives
To encourage investment and support entrepreneurs, the French government offers a wide range of tax incentives. These include reduced tax rates for startups, research and development (R&D) tax credits, and tax exemptions for companies operating in specific economic sectors.
These policies help reduce operational costs and create opportunities for businesses to grow at a faster pace.
Low-Interest Government Loans
The French government provides low-interest loans and financial assistance to support businesses. These loans are particularly beneficial for startups and small and medium-sized enterprises (SMEs), helping them secure initial capital and expand their commercial activities.
Such financial support plays a crucial role in easing market entry for new entrepreneurs and reducing financial barriers to starting a business.
Opportunity to Live in France
Registering a company in France allows entrepreneurs and company executives to obtain a business visa and residence permit, enabling them to live in the country.
Immigrating to France through company registration not only grants access to a high standard of living, an advanced education and healthcare system, and a rich cultural environment, but also enhances business networking opportunities and international market access.
Additionally, this advantage can extend to family members of business owners, offering them the chance to experience life in one of Europe’s most attractive countries.
Types of Companies in France
France offers various legal structures for company formation, allowing businesses to leverage the country’s vast consumer market.
With a population of over 67 million, France is one of the largest consumer markets in Europe. Choosing the right type of company depends on the nature of the business, capital investment, number of partners, and their level of liability. Below, we review the main types of companies in France.
Limited liability company (SARL)
The SARL is similar to a limited liability company (LLC) in other countries and is one of the most common business structures in France.
It requires a minimum of two and a maximum of 100 shareholders. A key feature of SARL is that each shareholder's liability is limited to their capital contribution.
This structure is ideal for family businesses or companies with multiple partners. The company is typically managed by one or more directors, who may be either shareholders or external individuals.
Single-member limited liability company (EURL)
An EURL is a single-member company that operates under the same legal framework as an SARL.
This structure allows individual entrepreneurs to establish a legal business entity without requiring a partnership.
The primary advantage of EURL is that the owner’s liability is limited to their invested capital, meaning that the company’s debts do not affect the owner's personal assets.
This type of company is typically suited for small business owners or freelancers.
Branch of a foreign company
A branch allows a foreign company to expand its operations into France without setting up an independent legal entity.
A branch operates as an extension of the parent company, meaning its legal and financial responsibilities remain directly linked to the main headquarters. However, it must comply with French commercial laws and tax obligations.
This structure is ideal for international businesses looking to establish a presence in France without incorporating a new company.
Simplified joint-stock company (SAS)
The SAS is a highly flexible business structure in terms of management and shareholding.
This type of company is ideal for startups, foreign investors, and businesses seeking investment.
Key features of an SAS include flexibility in internal regulations, greater freedom in decision-making, and the ability to attract foreign investors without requiring residency in France.
Limited liability company for regulated professions (SELARL)
French law has adapted the SARL structure for regulated professions such as lawyers, doctors, and engineers, creating the SELARL.
The regulations governing SELARL are similar to SARL, but they include specific ethical and professional requirements tailored to specialized professions.
Public limited company (SA)
A public limited company (SA) is designed for large businesses and major investment projects.
This structure requires at least two shareholders (or seven if listed on the stock exchange) and a minimum capital of €37,000.
The company is managed by a board of directors consisting of at least three members, along with a chairman and CEO.
Due to its complex regulatory requirements, the SA structure is typically suited for large corporations, especially when shareholders prefer indirect management control.
Single-shareholder simplified joint-stock company (SASU)
An SASU is a variation of the SAS, designed for a single shareholder.
Its legal framework is nearly identical to that of an SAS, with some simplified procedures to facilitate administration. However, SASU is generally not the preferred choice for newly established startups.
General partnership (SNC)
A general partnership (SNC) is less commonly used in France because partners have unlimited and joint liability for the company's debts.
This structure requires at least two partners, who must all be registered traders—meaning minors cannot participate.
There is no minimum capital requirement, and management can be assigned to one or more directors. If corporate tax is not chosen, profits are taxed at the individual partner level.
Civil professional company (SCP)
This structure is designed for liberal professions in france, allowing individuals within the same field to operate collectively.
In an SCP, partners share unlimited liability for the company’s debts, and no minimum capital is required for formation. Profits are taxed individually under personal income tax.
Costs of Company Registration in France
Obtaining residency in France through company registration is a legal and financial process that involves various costs. The cost of company registration in France depends on the type of company, registration location, required services, and legal requirements. Below is a detailed breakdown of the costs associated with company registration in France.
Official company registration fees: The initial costs of registering a company in France include administrative and legal fees related to company formation. The total registration cost usually starts at 3,600 euros, but this amount may vary depending on the type of company (limited liability, joint-stock, etc.) and the complexity of the registration process.
Office space – virtual or physical: If the company owner chooses to use a virtual office, the average cost of these services is 30 euros per month. However, if renting a physical office, the costs can increase significantly depending on the city and geographical location.
Minimum share capital: For registering a limited liability company (SARL) in France, no specific minimum capital is required, and applicants can register their company with a small investment. However, for joint-stock companies (SA) and other business structures, the required minimum capital varies.
Legal and accounting fees: After registering the company, utilizing accounting services for financial statements and tax payments is essential. The cost of accounting services for small businesses starts at 2,000 to 3,000 euros per year. This amount can increase depending on the company’s financial turnover and the complexity of its financial matters.
Residency permit fees for non-European managers: If the company’s director or main shareholder is a non-European citizen and intends to reside in France, they must apply for a residence permit. The annual cost of obtaining a residency permit for non-European individuals is approximately 3,000 euros.
Taxes and social contributions: After registering the company, the owner must pay applicable taxes. The minimum payroll tax and social security contributions payable to the social security fund are estimated at around 1,300 euros per month.
Corporate Tax Rates in France
Corporate taxes in France vary depending on the type of company, its revenue, and its economic activities. Below, the main taxes that registered companies in France must pay are reviewed.
Corporate Income Tax
One of the primary taxes that French companies are subject to is the corporate income tax (CIT), which is applied as follows:
The standard corporate income tax rate is 25% of the company's net profit.
Companies with an annual profit exceeding €763,000 are subject to a social contribution tax (Social Contribution Tax) at a rate of 3.3%.
If the company’s turnover exceeds €250 million, an additional 10.7% tax will be applied to its income.
Value-Added Tax (VAT)
Like many other European countries, France applies a value-added tax on goods and services:
The standard VAT rate in France is 20%.
Certain goods and services, including food, medicines, and cultural services, are subject to a reduced rate of 5.5% or 10%.
Tax on Dividends, Royalties, and Other Income
Companies operating in France and earning income from dividends, interest, and royalties must pay separate taxes:
The tax rate on dividends varies depending on the double taxation agreements signed between France and other countries.
Some companies may benefit from exemptions or reduced tax rates based on bilateral agreements.
