SETTING UP IN BUSINESS
Introduction
France has been the slowest among its EU neighbours in adopting a truly lberal business culture. At the same time, France has aggressively sought to attract foreign investment - and with considerable success. Thanks to strict regulation by banking administrators, France has not been subjected to the economic crisis like in other European countries. She still holds a strong position in the world's economy. One result is that it is now very easy and straightforward to open a company in France, although local advice is essential in order to ensure compliance with legal and financial regulations – contact us to learn more about how we can help with this.
What is the best way to open a company in France?
There is no fixed pattern. Options range from opening a small representative office – a bureau de liaison – through to acquiring an existing company or setting up a new business from scratch.
Is a foreign-owned company at a disadvantage?
To some extent. Unless foreign identity is part of the marketing strategy, most foreign investors prefer to adopt a fairly low profile and project a French image. An easy way to do this is simply to acquire a French company.
What is the most common type of company in France?
There are three main kinds of business entity in France:
- business corporation – Societé Anonyme (SA)
- limited company – SARL
- simplified stock corporation - SAS
What are the requirements for an SA company?
- the minimum share capital is €37,000, of which at least half must be paid up
- the company must have at least seven shareholders
- shareholders are liable up to the limit of their capital contribution
- accounts must be audited in line with statutory requirements
- with regard to tax and social security, senior management are considered as employees
What are the requirements for a SARL company?
- the minimum share capital was recently reduced to €1.00
- the minimum number of shareholders is one
- shareholders are liable up to the limit of their capital contribution
- accounts must be audited in line with statutory requirements
- management are subject to higher tax and social security than those of an SA company
What is an SAS company?
The Societé Par Actions Simplifieé (Simplified Stock Company) is a relatively new type of entity in France. It is a vehicle for creating a joint venture between a French company and a foreign partner. Previously, French companies had found it difficult to enter into joint-venture relationships with foreign companies because of the rigidity of French corporate law. However SAS companies are increasingly finding favor with foreign investors, particularly in the USA, who wish to set up subsidiaries in France.
What are the requirements for an SAS company?
- the minimum share capital was recently reduced to €1.00 (€ 37.000 previously)
- the company must have at least two shareholders and a chairman
- shareholders are liable up to the limit of their capital contribution
- there is no need for a board of directors
How easy is it to recruit staff?
Recruitment itself is reasonably straightforward in France but labor laws are very complex, much more so than in most other EU countries. Employment contracts for a fixed term are only permissible in a limited number of situations. Certain collective agreements negotiated at national level are automatically applicable to certain commercial and industrial sectors. In other sectors, such agreements are only applicable when agreed to by the employer. Collective agreements cover all workers, whether or not unionized. It is essential to take legal advice before offering or entering into any kind of employment contract.
We have a carefully selected team of legal and recruitment specialists based in France. For more details, please contact us.
What is the regulatory environment like?
France has a well-developed legal and regulatory system broadly similar to that in other EU member states. There are few restrictions on setting up companies, except in certain areas such as banking and insurance and there is no restriction on imports or capital from abroad. However state ownership is still a significant feature of the French economy, particularly in infrastructure industries and some restrictions still apply.
Many foreign investors find that the French legal system is slow and expensive, which underlines the importance of securing good legal advice from the outset.
Our team of French legal specialists can help, so please contact us for more details.
Are there financial incentives and what about banking facilities?
France has a world-class international banking network, and there is a wide range of financial institutions with expertise in arranging financial transactions and transfers. The first step in opening a French company should be to establish a local bank account – we can arrange this for you.
On top of commercial bank loans, numerous types of assistance is available for new companies. Susbidies and loans from local collectives help with the research into obtaining loans, offering access to shared expenses with support services, and tax and subsidy incentives for new and innovative companies.
How can I get more information?
Please contact us and we will be pleased to discuss matters in greater detail.