Incorporate in France: A Step-by-Step Guide to Business Setup

Renowned for its world-class infrastructure and huge economy, France provides a favorable business environment for business owners worldwide. In this incorporation guide, we’ll cover the step-by-step business incorporation process in France. We discuss the documents needed, company registration requirements, legal compliance needs of companies in France, and the types of business entities available.

Why Incorporate in France?

France is the 7th largest economy of the world, and the 3rd largest in the EU after Germany and the UK. France is an attractive European destination for business incorporation. It has actively pursued Foreign Direct Investments (FDIs) and offers various government perks and incentives for businesses to grow. In 2020, France bagged 1,000+ FDI projects, most of which were engaged in IT or software development. Surpassing the UK, France recently emerged as the most desired FDI destination of Europe.

Besides, France’s central European location gives easy access to other European Union markets. 

So if you are a business owner willing to incorporate in France, you tap into a market with unprecedented opportunities and skills.

Benefits of Incorporating in France

Business incorporation process in France comes with several benefits:

• Access to EU Markets: If you incorporate in France, you get access to a market of over 500 million consumers in the European Union.
• Government Support for Startups: The French government encourages innovation and entrepreneurship with tax incentives. For example, the business loan interest rates can go as low as 2%.
• Highly Educated Workforce: France has a very skilled workforce, making it easier to find quality talent for your business. It also has a highly regarded educational system.
• Innovation and Research: France is a hotspot for companies that are looking for research and development activities.

Legal Requirements for Incorporation in France

Before you start the business incorporation process, it’s important to understand the legal requirements to incorporate in France. The legal requirements range from the types of business entities available to documentation necessary. In this section we cover most of the important ones.

Types of Business Entities Available

France offers several types of business entities for incorporation:

1. Sole Trader (Entreprise Individuelle): Best suited for small businesses and freelancers, where the owner is personally liable for debts. Also, the business is subject to income tax.
2. Limited Liability Company (Société à responsabilité limitée or SARL): Preferred by most business owners, a SARL can have a minimum of 2 business partners and maximum of 100. In case of administrative failure, the liability while limited to their contributions can extend to the personal property. Also, family constituted companies can go for income tax.
3. Single-Person Limited Liability Company (EURL): Similar to SARL but with only one shareholder or owner. A ‘gerant’ manages an EURL, who is basically a managing director or the company secretary.
4. Public Limited Company (Société Anonyme, SA): Ideal for larger businesses, since there is no cap on the maximum number of partners. The minimum share capital for SA is €37,000.
5. Simplified Joint-Stock Company (Société par Actions Simplifiée, SAS): Needs one or more partners. The profits earned are taxable by the corporate law. A SAS’s shares can’t be listed on the public exchanges. The decision making process by the management must be done inside France.

Documentation Needed for Incorporation in France

To incorporate in France, you need specific documentation, including:

• Company’s Shareholder Identification: Notarized and translated identification documents of all shareholders.
• Company Manager Details: Identification documents and appointment letters of the company managers.
• Manager Appointment Document: Official document appointing the manager of the company.
• Founder Information: Addresses, visa details, passports, and other relevant information pertaining to the company founders.
• Registration Application and Fees: Application form required for company registration, along with the applicable fees.
• Memorandum and Articles of Association: Notarized documents outlining the company’s objectives, structure, and rules.
• Board Resolution (if applicable): Document detailing resolutions passed by the company’s board.
• SARL Charter: The SARL charter is the official founding document of a Société à Responsabilité Limitée (SARL). It serves as a key legal document defining the rights and obligations of all parties involved in the SARL.
• Manager’s Criminal Record Declaration: This is a statement confirming that the manager has no criminal convictions.
• Trade Registrar Application Forms:These forms are a crucial part of the company registration process in France and must be submitted to the Trade and Companies Register (RCS). They verify the company’s compliance with French legal requirements.

Step-by-Step Process to Incorporate in France

To incorporate your business in France, follow the steps below.

1. Choose Your Business Structure

Selecting the right business structure is essential, as it will determine your liability, tax obligations, and other regulatory requirements. You can seek Commenda’s professional advice while selecting the type of legal entity during the business incorporation process in France.

2. Register Your Business Name

Your business name must be unique, so look into its availability using the National Institute of Industrial Property (INPI) and the Commercial Court Registry. Registering your business name helps protect it from being used by others while you incorporate in France.

3. Open a Corporate Bank Account

The company must start a corporate bank account to transfer the share capital. A lot of different banks like BNP Paribas, HSBC and Société Générale offer specialized banking services for businesses. Compare and select the one which best suits your business.

4. Register the Business and File Incorporation Documents

After you start a company bank account, register your business at the Enterprise Formalities Center (Centre de Formalités des Entreprises). They take care of all other business related obligations.

Then, you can submit Articles of Association, proof of identity, and proof of capital deposit, to the French Trade and Companies Register (RCS). The AoA must be notarized by a French notary.

5. Obtain Necessary Licenses and Permits

At this point the company receives several registration numbers, which are SIRET (System Informatique for the Repertoire of Enterprises), SIRENE (Supplementary Information Request at the National Entries), and NAF (Nomenclature of Activities in France) numbers.

You should also announce the registration of your company in a regional newspaper. This serves as a formal announcement of your business incorporation process in France to the business community. The SIRET number allows your business to be recognized as an employer of local talent.

Costs and Fees Associated with Incorporating in France

Incorporating a company in France involves several costs:

• Registration Fees: It costs €550 to register your company online in France. This covers the administrative fees, filing fees, notary fees, etc. For only registration of a SARL, SASU or SA, the cost is €37.45.
• Legal Assistance: Hiring a lawyer or accountant can significantly speed up the business incorporation process in France. With the help of Commenda’s incorporation experts in France, the entire process becomes smoother and requires minimal effort on your part!
• Chamber of Commerce: Businesses involved in trading activities need to register with the Chambre de Commerce et d’Industrie (CCI), which costs about €100. 

If your business deals with manual-based operations, you must register with Chambre de Métiers. It costs €200 to participate in the mandatory 5-day training program, and an extra €180 to be listed on the registre des artisans.

For micro-enterprises, registration is free.

Common Challenges and How to Overcome Them

To be incorporated in France, you need to overcome certain challenges.

• Professional Assistance: Hire a local lawyer or accountant who understands French business laws and can guide you through the legal and tax requirements.
• Language and Culture Barriers: Most of the country speaks French. Many of the incorporation documents are in French, which can pose a challenge for business owners from other parts of the world. Hiring local talent becomes crucial because of these reasons.

FAQs About Incorporating in France

Q) Do I need to be a resident to incorporate in France?
No, you don’t need to be a resident. However, non-EU citizens will need a residence permit in the long run. The French government has a tool to help you choose the correct visa and residency permit for your personal use case. If you want to visit and incorporate in France, you can go for a business visa.

Q) What is the corporate tax rate in France?
The corporate tax rate in France is 25%. Businesses must file their corporate tax returns before 30th April. There are other taxes too, like VAT taxes, which stand at 20%. Some goods and services enjoy reduced VAT rates (10%, 5.5%, and 2.1%). If your company distributes dividends, a 25% withholding tax is imposed.

Q) Can I register my business online?
Yes, France offers an online platform to register businesses, which makes the process more convenient for foreign investors. You can incorporate in France via the Guichet-Enterprise website.

Q) How long does it take to incorporate a business in France?

To incorporate in France, it typically takes between 2–4 weeks. However, this can vary depending on how quickly you arrange for the necessary documents, open a bank account, and meet legal requirements.

Conclusion

If you decide to incorporate in France, you get an excellent way to access the broader European market. France’s strong legal framework, support for startups, and highly skilled workforce make it an ideal destination for business owners. 

A business incorporation process in France requires careful planning and research. It can be a tricky process without the help of an expert, especially if you are not an European citizen. 

Let Commenda make your incorporation journey easier. Trusted by over 250+ cross border companies, Commenda makes handling legal compliance and company registration requirements in France so much easier. Book a free demo here!

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