If you’re an Australian who wants to expand their business into Europe, then France is becoming the go-to place for Australian trade and startup entrepreneurs who want to break into EU markets.
France is now the hub of European startups and has established itself as a hothouse of startup talent. Funding and support for startups in France have taken off, thanks in large part to the creation of tech hubs in every major city, and the world's largest tech campus Station F in Paris.
The advantages of choosing France, especially for trade businesses which rely on access to import and export markets in Europe, is that France is located in an excellent position for connecting to both Northern and Southern Europe. It borders Belgium, Luxembourg, Germany, Switzerland, Italy and Spain, as well as the independent south coast corner of Monaco. Together with the short hop across the channel to the UK and Ireland, and direct shipping lanes across the Mediterranean to Africa, France is perfectly located for easy access to a whole host of potential customers.
Once your French company is incorporated with a registration number, you can provide a range of services as well as importing and exporting quite freely, as long as you comply with regulations. When your company has a French registration number, you can easily get an EORI number – which stands for Economic Operators Registration and Identification system - that allows you to import and export goods throughout the EU. It makes administration much easier when it comes to the borders and customs authorities, and streamlines the declaration of goods as it means you are regarded as a French company who imports from outside the EU, as opposed to a foreign exporter who wants to import into the country.
There are also advantages in being able to open a European bank account and invoice from Australia in euros, which can save money in currency exchange services. And by having a business address in France, not only does it give your business some extra credibility (especially if you have an address in the fashionable capital of Paris) but you can also apply for temporary or permanent work permits and visas, which allow you to stay, work or even become an EU citizen, not just in France, but also throughout the rest of Europe.
In terms of taxes, your French company is liable to pay French taxes but if you’re a shareholder or legal representative of the company and you still live in Australia, you are only liable to pay your income tax in Australia. If you’ve decided to make the move to France and become a resident of France, then only the French declaration and rates would apply. As the French corporation tax is only 26.5% compared to Australia’s 30%, that could gain you a hefty amount if your business is successful, not to mention the lower tax rates on capital gains.
French business regulations
The best type of company for Australians to open in France is called an SAS - the Société par Actions Simplifiée, which is a limited liability company. The main characteristics of an SAS are as follows:
- The minimum share capital was recently reduced to €1 but we recommend a minimum amount of around 4,000 euros. Please bear in mind that this is "working capital" and this can be taken out of the account for use at any time.
- At least one director (called a President) and one shareholder is required. They can be the same person.
- The president can be a legal entity, not necessarily a physical person.
- An auditor could be required if the annual turnover exceeds 8,000,000 euros and/or if you have more than 50 employees, but this is unlikely the case at the start of the SAS.
Under French law, a registered address is mandatory. You can apply for a virtual office (with mail forwarding and scanning services, and telephone answering services) or you can go for an office, factory or warehouse location. Whatever you choose, it’s easy to change between the two, or change addresses if you prefer. Many Australian entrepreneurs start off with a prestigious headquarters address in Paris which then allows them to set up branches in other French cities such as Lyon, Bordeaux or Aix en Provence. With France’s great 5G coverage and broadband connections, it’s possible to choose anywhere that takes your fancy. And with strong Australian connections in France’s business communities such as Business France and the French Chambers of Commerce and Industry, you will find plenty of help at hand to smooth your way into French commerce.
One of the positive outcomes of the pandemic is that due to difficulties in travelling for foreign entrepreneurs, the French business system loosened certain restrictions that means you can do pretty much everything such as set up your company, sort out a bank account and set up your office, all remotely.
For more information on how you can set up a business in France if you’re an Australian, you can download our free guide below or take a look at our French company formation page.