Setting up a business in France

Setting up a business in France

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If you're looking to work in France, since 2015 France has made it easier for foreign residents to set up a business in France.

Setting up a business in France is relatively easy. According to the Ernst & Young G20 Entrepreneurship Barometer report 2013, it’s easier to start up business in France than most other G20 countries: it’s cheaper, there are fewer steps and it takes less time. You can go through all the procedures required to set up a small to medium-sized business – even one of up to 50 employees – in as little as four and a half days.

If you want to start a business in France you’ll need to have a residence permit, or be an EU citizen and you may need to have qualifications or diplomas that are recognised in France. Then you’ll need to research the market, make budget forecasts and financial plans, and if necessary look for funding. You’ll have to select your legal status and register your business. This guide explains more on setting up a business in France below.

Yes, there is a fair bit of bureaucracy – but you can submit your tax declaration online, it’s free to set up a business and handling the paperwork demanded by French authorities is a good step to testing your French business sense.

The information given here provides a general overview only; you should always get professional advice from a French accountant or financial expert when setting up your own business in France.

French businesses: Choose a category

In France businesses are divided into five different categories:

  • Commercial or industrial, such as running a shop, café or factory;
  • Trades/artisan, which includes building trades, other manual jobs, some manufacturing;
  • Independent or freelance professional – working independently and providing a service such as a dentist, writer, interpreter, musician;
  • Commercial agent, where you act – negotiate or sell for example – on behalf of another company;
  • Agricultural.


Each of these has its own registration centre (Centre de Formalités des Entreprises or CFE) local to each department in France. You have to set up your business through the appropriate CFE and advise them of any changes, such as a new address.

French business legal structures


You have to decide which type of business structure – and tax regime – suits your business. There are two types of legal business structure in France:

  • a sole trader (enterprise individuelle or EI);
  • a company (société), such as an EURL, SARL, SA and SAS.


What type of legal structure you choose depends on what business you want to start (some require a specific structure), so check with the Chambers of Commerce or relevant professional body. Other factors that will affect your choice of legal structure include whether you want to be in sole charge of the business, your turnover, if you have personal assets you want to protect or if you want to pay tax through income tax or corporation tax.

Sole trader
In this legal framework, you and the business are treated as one legal entity. Your professional and personal assets are merged although you can make a ‘declaration of seizure’ to protect your home. Under this legal structure you can, as from January 2015, set up as a micro-enterprise. This merges the old auto-entrepreneur and micro-enterprise systems. For more information on micro-enterprise, see Expatica’s guide on how to set up a small business or become self-employed in France.

You can also opt to set up in business as an EIRL (Entrepreneur of Individual Limited Liability) where your personal assets are separate. In both cases you trade under your own name although you can take on a company or trade name.

If you take on EI status, you pay tax through your personal income tax return in the category for your business: industrial and commercial profits (BIC) for traders and artisans, or Non Commercial Benefits (BNC) for independent professionals. If you opt for EIRL status you can choose to pay corporate tax.

Company
If you choose to set up a company (société), it will be legally separate from you. Your personal assets are protected from the company’s creditors but you may be prosecuted if you use the company’s assets for your own personal use. Your company must have its own name, address and a minimum of assets. You act on behalf of the company, not on your own behalf. You may be taxed under corporate tax (IS) or the régime du reel. Creating a company is not so straightforward as it is for a sole trader. It involves recording your status with the tax office, appointment of officers and publishing legal notices in the press.

There are two main types of company:

  • An EURL or Entreprise Unipersonelle à Responsibilité Limitée is owned by a single person and run as a limited liability single shareholder company by a gérant (managing director/company secretary) who may or may not be the owner of the business and salaried/non-salaried. 
  • A SARL or Société à Responsibilité Limitée is a limited liability company with between two and 100 partners. Liability for both is limited to the capital investment.


Regulated businesses

Some occupations are regulated in France, including accountants, vets, hairdressers, builders and even wine dealers. If your business is one of these regulated professions, you will have to be registered with the appropriate organisation and may need to prove that you have the right qualifications, experience and insurance liability before you can work.

Find out if the business you want to set up is regulated here via the APCE website – just click on the appropriate letter of the alphabet to find the sector you need.

Check your company name

You can check online and free of charge whether the name you want to use for your company is already in use by another company through the Institut National de la Propriété Industrielle (INPI). If you want to protect your own business name or logo you must register it as a trademark (dépôt de marque) with the INPI; if you don’t ­ – and someone else starts using the same name or logo in the future – you will have no legal right to keep it.

If you’re going to create a website then check that the name you want is available through the AFNIC, the registry for .fr domain names.

Financial assistance

French banks are required to offer financial assistance to new businesses. These include a start-up loan Prêt à la Création d'Entreprise (PCE) for up to EUR 7,000 or business loan called Prêts Bancaires aux Entreprises (PBE).

Check out the website of your Conseil Régional for information on financial assistance and loans as well as business advice.

If you are unemployed or about to become unemployed, it will be worth investigating two schemes: ACCRE and NACRE.

ACCRE offers financial support to unemployed people who wish to start up a business, through paying reduced social charges. Eligible people include those who are registered as unemployed with the government employment agency Pôle Emploi, or are about to be made unemployed by a bankrupt or liquidated company. If you set up as an auto-entrepreneur, you can get a reduced rate of charges for up to three years; if you do not, then you have to pay all social charges once your annual income goes above EUR 20,814 (2014 figures).

NACRE offers interest-free loans and business advice. Find out more from your local Direccte (Directions régionales des entreprises, de la concurrence, de la consommation, du travail et de l'emploi).

If you want to apply funding for your business supported by the EU click here to find appropriate banks and venture capitalists in France.

How set up your French business

The first step in setting up a business is to register it. All business have to be registered before they can start to operate. You have to do this through the Centre de Formalités des Entreprises or CFE) or online at www.guichet-entreprises.fr.

There are different CFE for each type of business activity and you need to make your application through the appropriate CFE. You can find your local offices through their websites. For example:

 

To find the correct CFE for your type of business, click on this list.

Documentation needed for business registration
What documents you need to register will vary depending on your type of business but may include:

  • Proof of address (EDF utility bill, rental agreement);
  • Proof of ID (valid passport or national travel ID, residence card);
  • Proof that your spouse understands liability.

 
Click here to create an online CFE file.

If you are setting up a company you may need to deposit funds with a notary or bank for example, draft statutes for the company (see this info at APCE), designate a CEO and publish a notice of incorporation in a legal gazette.

What happens at the CFE
The CFE will send process your application and send your documents to the relevant bodies. Depending on the type and size of your business and whether you will be taking on employees, these may include:

  • National Institute of Statistics and Economic Studies (INSEE), which will register your company with the national business directory and allocate SIRET, SIREN and APE numbers (see below);
  • Centre des Impôts (the tax office);
  • Registre du Commerce et des Sociétés (RCS) – the commercial court register;
  • social security;
  • labour office (Direction Departemental du Travail et de L’emploi);
  • health insurance (Caisse regionale D’assurance Maladie);
  • unemployment insurance, pension, employment office (Pole Emploi);
  • Greffe du Tribunal de Commerce if you’re forming a company or your business is commercial;
  • Répertoire des Métiers you want to carry out a trade or craft;
  • the Caisses Socials and Inspection du Travail if you’ll be employing others.

 

Business administration course

Depending on your qualifications and experience, if you want to set up a business as a trades person (artisan), you may be required to undertake training (Un stage de préparation à l'installation or SPI), meetings or workshops in order to learn about different aspects of running your own business. Your spouse can take the course too. There are similar optional courses available to those setting up commercial and industrial businesses. These courses cost around EUR 250 but you may be able to get some help with this – ask your Chamber of Commerce.

SIREN, SIRET and APE numbers

When you register with your business, INSEE will issue you with a unique, 9-digit identification SIREN number. This official business number is proof that your business is registered and will be used by all government and official agencies when referring to your company.

Within about two weeks of registration, you’ll be sent an Extrait KBIS, containing a 14-digit SIRET number. The SIRET number refers to each business location you may have and consists of the SIREN number plus a 5-digit establishment ID number. Tip: if you want to find out more about your competitors, you can key in your competitors’ SIREN numbers here to discover when they set up their business, how many employees they have and, if they’re a limited company, financial information such as turnover, profit and loss – could be useful!

You will also have an APE (Activite Principale de l'Entreprise) or NAF code which identifies the main activity of your business. Each business in France is categorized using these codes, which consist of four digits and a letter.

Hiring employees

Employing workers is expensive in France. If you want to take on employees bear in mind that you will have to pay social charges for your staff in addition to the social charges for your company. This means that you have to pay employees a net salary plus a further 75 percent in employers and employees’ contributions (companies pay the employee contributions).

Workers are well protected by labour law in France so you should get professional advice on drawing up contracts, working conditions and employment law.

How to prepare a French invoice (facture)

You must include the following information on your invoices in France:

  • date of invoice;
  • date of service or sale;
  • description of service or sale;
  • price, any discounts;
  • total amount excluding VAT (prix HT, hors tax), the VAT (TVA) or mention that TVA not charged and total sale price (TTC);
  • client name and address;
  • company name, company form (eg SARL);
  • registered address;
  • SIREN number (RCS if applicable).

 

Managing your accounts

  • Keep on top of paperwork;
  • Keep business and personal accounts separate;                                                     
  • Keep all receipts;
  • Have a separate bank account;
  • Put money aside to pay tax, social charges and VAT (if applicable).

 

Getting professional advice

It’s always a good idea to get professional advice when you’re setting up a business. An accountant (expert comptable) can advise on taxation, charges, the law and any available rebates for example. Find an accountant through the French accountants’ professional body the ‘l’Ordre des Expert-Comptables or local Chamber of Commerce, or consider using an affiliated accounting centre. If you want to set up a limited company, consult a good notaire through Notaires de France.

Useful contacts

  • APCEAccueil Professionnels et Entreprises ­– the national organisation for start ups in France.
  • Centre de Formalités des Entreprises or CFE, the organisation responsible for handling business registration throughout France. There are different offices for each type of business.
  • Direccte (Directions régionales des entreprises, de la concurrence, de la consommation, du travail et de l'emploi)
  • INPI – the Institut National de la Propriété Industrielle, which deals with trademarks, patents, designs and company names.


For more information

 

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