Thinking about starting a business in France? You’re not alone! France is one of the most dynamic and business-friendly countries in Europe, offering a thriving economy, world-class infrastructure, and a highly skilled workforce. Whether you’re a local entrepreneur or an international investor, France company registration opens the door to endless opportunities in a market known for its innovation and growth.
From its strategic location in the heart of Europe to its supportive government policies, France makes it easy for businesses to set up and flourish. The process to set up a company in France is straightforward, with flexible business structures like the SARL (LLC) and SAS (Simplified Joint Stock Company) designed to suit your needs. Plus, with attractive tax incentives, strong intellectual property protections, and access to a large consumer base, France is the perfect place to turn your business ideas into reality.
In this guide, we’ll walk you through everything you need to know about France company registration, from choosing the right business structure to completing the necessary paperwork. Furthermore, we will be covering the taxation structure and benefits of company incorporation in France.
Why Register a Company In France?
- The process of establishing a business in France is fairly simple when contrasted with other countries in the EU. When compared to the EU, France is the only country to favour private sector investment over setting up a business by itself.
- The French government provides a variety of perks and incentives to help companies to grow. For the protection of intellectual property, the nation is a signatory to accords like the TRIPS Agreement, which provides substantial protection for foreign intellectual property rights.
- The nation provides adequate infrastructure and services for initiatives, including energy, roadways, railways, ports, and other things.
- With an educated and highly skilled workforce, the cost of manufacturing the goods lowers. Because of this, it is the most popular place for investors and entrepreneurs to launch a new firm.
Procedure for Company Registration in France
The process of company registration in France is discussed below:
Step 1: Select an Appropriate Legal Structure
The first step to register a company in France is to choose the most suitable legal structure for your business. For entrepreneurs wishing to set up a small to medium-sized business, a French LLC (SARL) is typically the best option. However, for larger or more complex businesses, other structures like the SAS (Société par Actions Simplifiée) may be more suitable.
You can consult our incorporation experts to select the most suitable legal structure for you.
Step 2: Check the Company Name Availability
The second step involves selecting a unique name for the corporation and confirming its availability. This can be done via the Institut National de la Propriété Industrielle (INPI) website, which handles trademarks, and the Registre du Commerce et des Sociétés (RCS), the French Commercial Court Registry. The name must adhere to French naming rules and not conflict with any already-existing trademarks or company names.
Step 3: Prepare the Articles of Association
The Articles of Association outline the company’s regulations, organizational framework, and operating procedures. This documentation has to be signed by all shareholders and notarized.
Step 4: Deposit the Share Capital in a Business Bank Account
For certain legal structures (e.g., SARL, SAS), the company has to open a business bank account in France and deposit the share capital there. The minimum capital requirement for a SARL is €1, while a SAS may require a higher amount depending on the business activity. Once the company is registered, the funds are released for business use.
Popular banks in France for business accounts include BNP Paribas, Société Générale, and HSBC. It is recommended to compare fees and services before selecting a bank.
Step 5: Register with the Centre de Formalités des Entreprises (CFE)
The CFE is the one-stop shop for company registration in France. Documents such as the Articles of Association, evidence of share capital deposit, and identification documents must be submitted by the applicant. The CFE will handle the registration with the relevant authorities, including the Registre du Commerce et des Sociétés (RCS) and tax authorities.
Step 6: Publish a Legal Notice of Incorporation
A legal announcement of the company’s formation must be published in a designated legal gazette, such as JAL (Journal d’Annonces Légales). This step is necessary to inform the public about the establishment of the company in France.
Step 7: Receive the Company Identification Numbers
After completing the registration process, the company will receive its official identification numbers:
- SIRET (Système d’Identification du Répertoire des Établissements): A 14-digit number identifying the company’s location.
- SIREN (Système d’Identification du Répertoire des Entreprises): A 9-digit number identifying the company.
- NAF/APE Code (Nomenclature d’Activités Française): A code classifying the company’s primary business activity.
These numbers are essential for conducting business in France, including invoicing, hiring employees, and filing taxes.
Eligibility Criteria for French Company Formation
The following eligibility criteria have been met for company registration in France:
1. Objects Clause
The object clause in the memorandum should state the purposes for which the company was created.
2. Information on Key Executives
The most important information regarding the executives should be disclosed while applying to register a company in France. Details about the shareholders’ names, the registration address, as well as other details would fall under this category. In addition to this, further shareholder-related information should be disclosed. This would comprise data pertaining to the visa.
3. Information on Directors
Information about the directors of the company has to be made available.
4. Minimum Capital
The minimum capital requirement will be determined by the shareholders of the AOA and could be as small as EUR1.
However, if the business is a French Public Limited Company, the minimum capital requirement is EUR 37,000. A one-fifth portion of the capital authorized is due at registration time.
Documents Required for Company Registration in France
A firm must have the following paperwork to be registered in France:
- The identification documents of the company’s shareholders have to be notarized and translated.
- Information about the managers of the company, as well as their identification documents and appointment letters.
- Appointment of Manager Document.
- Information on the Founders of the Company includes their address, visa information, passports, as well as other information pertinent to the company.
- Application Form for Registration and Fees.
- Memorandum of Association and Articles of Association which must be notarized.
- Board Resolution( If required)
- Charter of the SARL
- A declaration that the manager has no criminal convictions.
- Forms for applications are made available through the Trade Registrar.
- The decision to launch the company was published in the National Gazette.
Types of Business Entities for French Company Registration
When registering a company in France, selecting the appropriate business structure is critical. Here’s a summary of the most popular choices:
1. French LLC (SARL)
The SARL, or Société à Responsabilité Limitée, is the most common structure for small and medium-sized firms. It only needs a minimum of 1 director and 1 shareholder, with a minimum share capital of €1. SARLs provide limited liability protection, which means that shareholders are not individually accountable for the business’s debts. This structure is simple to set up and has no residency requirements for directors or shareholders.
2. Simplified Joint Stock Company (SAS)
The SAS (Société par Actions Simplifiée) is highly flexible, making it perfect for startups and holding companies. It requires one shareholder and one director, with a minimum capital of €1. Unlike SARLs, SAS in France allow shareholders to customize governance rules. However, shares cannot be publicly traded.
3. Partnerships
Partnerships in France allow multiple partners to share profits and responsibilities. Common types include:
- SNC (Société en Nom Collectif): General partnership with shared liability.
- SCS (Société en Commandite Simple): Limited partnership with both general and limited partners.
Partnerships are ideal for collaborative ventures but require careful planning to manage shared obligations.
4. French Public Limited Company (SA)
The SA (Société Anonyme) is designed for larger corporations planning to raise capital through public share offerings. It requires a minimum capital of €37,000 and at least two shareholders (or seven if publicly traded). SAs typically have a more complex management structure, which includes a board of directors or an executive board.
5. Branch Office
A branch office enables international enterprises to operate in France without forming a distinct legal company. While it is easier to set up, the parent business is still completely responsible for the branch’s obligations. There’s no minimum capital requirement.
6. Representative Office
A representative office is a non-trading entity utilised for market research, promotion, and liaison activities. It cannot engage in commercial operations and must be managed by a resident representative.
Tax Structure in France
Every company operating in France is subject to various taxes, including corporate tax, VAT, and withholding tax. An overview of the main taxes that French enterprises must pay is shown below:
1. Corporate Tax
The standard corporate tax rate in France is 25% for most companies. However, small and medium-sized enterprises (SMEs) with a turnover of less than €10 million and taxable profits below €38,120 may benefit from a reduced rate of 15% on the first €42,500 of profit. This reduced rate is designed to support smaller businesses.
2. Value-Added Tax (VAT)
VAT is an indirect tax applied to the sale of products as well as services in France. The standard VAT rate is 20%. However, reduced rates apply to specific products and services:
- 10%: For certain goods like transportation, tourism, and some renovation work.
- 5.5%: For essential items such as food, books, and energy-saving equipment.
- 2.1%: For pharmaceuticals, certain cultural events, and newspapers.
Companies are required to register for VAT and submit periodic returns, usually every month or every three months, depending on their turnover.
3. Withholding Tax on Dividends
A withholding tax of 25% applies to dividends distributed to shareholders.
4. Tax Exemptions and Incentives
France offers various tax incentives to encourage investment and innovation. For example:
- Businesses investing in priority sectors (e.g., research and development, green energy, or economically disadvantaged regions) may qualify for tax exemptions or reduced rates.
- The Research Tax Credit (CIR) allows companies to claim a credit of up to 30% of eligible R&D expenses.
- Certain investments may benefit from a seven-year corporate tax exemption, particularly in designated priority zones or for innovative projects.
Benefits of Company Registration in France
The following are the advantages of opening a company in France:
1. One of the Biggest Economies in the EU
France is the second-largest marketplace for consumers in the EU and has 65 million buyers in the country up to the sum of a trillion per year. With 83 million visitors annually, the tourist sector is booming. France is the second biggest exporter of food and beverages and the foremost important exporter of pharmaceuticals.
2. Intellectual Property Protection
France has ratified agreements like the TRIPS Agreement, which greatly protects the intellectual property rights of foreign nationals. All businesses that operate in France can use a common patent registration process that gives greater protection for patents in France company registration. This also provides international patent protection.
France is positioned as the 12th most effective country to register patents worldwide by the World Economic Forum. The French government has a strict policy of examining instances of IP infringements, and they charge a penalty of up to 7500 euros if anyone violates the rules.
3. Low-Interest Loans for Public Sector
Public Sector France does provide loans with a low rate of interest.
The low-interest loan could be up to EUR 1.5 million for funding research and development projects of companies with:
- Under 250 workers,
- Have less than EUR 50 million in annual revenues, and
- Have been operating for at least three years.
For non-listed resident businesses, options for equity investments are permitted. Credit insurance is provided to all companies in France for a nominal cost.
4. Tax Incentives Offered by the Government
There are a variety of tax incentives and other programs offered by the French Government. The interest rates on business loans for entrepreneurs from all over the world can be as low as 2 percent. When the investments are in one of the areas that are designated as a priority by the French Government, these businesses will be exempted from paying corporate taxes for seven years.
Although the tax rate for corporate entities can be up to 34 percent in France and the net tax rate could be reduced to 9 percent if the investment is made in particular areas. Additionally, the government offers other social security benefits.
5. Excellent place to go in search for FDI
France has emerged as the most desirable place to invest Foreign Direct Investment, moving ahead of the United Kingdom. France has received more than a thousand FDI projects in 2020, and the highest investment is being made in the area of IT and software projects.
6. Good Infrastructure
The country has adequate infrastructure facilities in the areas of transportation, energy ports, railway projects, and many other projects.
Conclusion
For entrepreneurs looking to launch their companies in Europe, France is a great place to start. Its advantageous location, strong economy, and well-developed infrastructure make it a great place for businesses to expand. Whether you’re a local resident or a foreign investor, France offers an array of business structures to suit various needs, from LLCs to representative offices, each with distinct advantages. Additionally, the French government’s support through tax incentives, financial incentives, and a highly skilled workforce makes it an attractive choice for company registration.
If you’re looking to establish a company in France, our team of experts at OnDemand International can guide you through every step of the process. With years of experience in business formation, we are here to help you navigate the French legal and regulatory landscape and set up your company smoothly. To start your path to a successful French business registration, get in touch with us right now.
FAQ’s
The most suitable type of business for the registration of a company in France is a French LLC. This type of business structure offers the advantages that come with the limitation of liability. In addition, professionals utilize the company to launch an entrepreneurial venture.
Typically, it takes around two weeks to establish a business in France.
The answer is yes, French businesses do not need resident directors. Directors can be of any nationality.
The registration procedure in France is completely carried out on the internet.
The French Public Limited Company (SA) has three directors and at least seven shareholders. The shareholders need not be French nationals.
French businesses are permitted to employ foreign citizens. However, they are required to abide by the rules outlined in the French Labor Code and Immigration.
VAT and corporation tax are due from French businesses. The VAT rate is 20%, and the corporation tax rate is 34%. All businesses must be registered by the VAT and corporate tax regulations.
