France has its economy fifth largest in the world and second largest within the Eurozone. While the country has only liberalised its corporate culture later than many of its EU counterparts, its foreign direct investment drive has been quite fruitful. Therefore now France invites everyone, who is ready to accelerate the market, to become an entrepreneur or an investor. Basically, Start an Idea is a key opener for you if you wish to start your business in France and do not know how to begin. Start an Idea is here to assist you to register your Business in France mainland thereby making your dream come through.
France is one of the member countries in the European Union and it has provided different channels through which foreigners can initiate their own businesses. On the other hand there may be problems to handle a multi layered taxation system, language problems and high expenses for employees can occur. This means an Indian can incorporate a company in France and can trade but he has to go by French laws of formation of the company, and formalities for annual returns and taxes. New to this post and keen to know more about registering your company in France for Indians, read the following details to know the expectations.
Can You Register a Company in France from India?
Yes, as long as all the French laws and regulations have been met and followed to the latter. France permits temporary residence for Indians holding foreign passports, the only condition they need to provide genuine, serious, and commercially feasible ideas for business. However, you shall also need to demonstrate that you have ample amount of money that you will be able to tap into while in that country. This temporary permit of living in the country and visa can be transformed into a long-term stay.
Different Types of Companies in France
Here are the various forms of business constitution that an entrepreneur can form in France.4 5
Microentrepreneur
Micro entrepreneurs are small business units owned and managed by an individual or a sole trader, who’s average annual turnover does not exceed € 72600- € 176200 as per the type of business they perform. It means that microentrepreneurs must be registered or gain registration to get tax advantages.
Single Businessperson or Sole Proprietor (EI)
The sole trader has no stipulated capital base. There is only the business owner as an executive of the company and he or she is fully in charge of the business. There are no registration fees, but the business will be liable to pay income tax.
Individual Entrepreneur With Limited Liability (EIRL)
This business entity is similar to EI but with the difference that entrepreneurs can limit their liability. Secondly, the choice is even simpler since the business has to register for either income tax or corporation tax. However, this decision we are now making is final.
Limited Liability Company (SARL)
It is for this reason that most of the French entrepreneurs are inclined to register limited liability companies. This business constitution must have at least two partners, though the number cannot exceed a hundred. It is not compulsory that the share capital is compulsory but the partners can fix it depending on the size of the company. It is limited; however, it goes up to personal belonging in the case of administrative shortcomings in the company. While a SARL is taxable to corporation tax for profits, an income tax is available for family-t corroborated companies.
Sociedad Anonima (SA)
Most often, large businesses opt for this business structure because there is no ceiling on the number of partners. However, this principle is not less than 2 or 7 if the client company draws a portion of its capital from a public exchange. An operative company is required to hold a minimum capital of € 37,000. It is mandatory to register and the company completes a corporation tax return for its profits.
Corporations Simplified (SAS)
In this structure of business formation, one or more partners are mandatory for the company, while the maximum depends on its size and operations. It is mandatory to register, and the company will be liable for Corporation tax.
Unipersonal Simplified Stock Company (SASU)
This business structure is beginning to develop in France because it permits the business to be started singly by the participant.
Other forms of organization exist in France and among them is the Cooperative and Participatory Society, commonly known as Scop. Consult with a business expert to help you on which legal status will best suit your firm.
11 Steps to Register a Company in France
Step 1: Choosing the business structure
The first activity that needs to be observed in the business legal requirements involves choosing the right legal form of the business. France provides you options like Société à Responsabilité Limitée (SARL) and Société par Actions Simplifiée (SAS).
Every structure has different regulations concerning responsibility, capital, and direction. For example, SARL is most commonly used by start-ups or small and medium sized companies as it is both flexible and provides for liability.
Step 2: Developing a robust business plan
However, a good business plan is important because it will help you define your business goals, strategies, and expected revenue and expenditure.
In France it is often obligatory to have a detailed business plan in order to gain funding and confidence in your business among partners and the government.
Step 3: Securing a registered office address
Your French limited company must have a registered office address in France. This could be an actual premise, or you could get a business address solution. For business requirements the address should be selected and should follow the regulations of zoning if applicable.
Step 4: Depositing the capital in a bank account
The requirement is to open the corporate bank account in France and make the payment of initial share capital. It depends on the legal plan chosen. The amount needed will depend on the legal formation chosen. The legal capital for a SARL starts at €1 but the adequacy of this capital will be discussed below.
Step 5: Preparing and notarizing incorporation documents
Legal working documents such as the articles of association of a company must be prepared and some of them include notarization. These are legal papers that outline how your company will be governed, and the operational policies and regulations in existence and are legally mandatory for formation of a company.
Step 6: Registering with the Centre de Formalités des Entreprises (CFE)
This Information Note reveals that the CFE serves as the single portal of entry for business formation in France. Here, you will formally enter your business on the Trade and Companies Register and receive a registration number (SIREN). This number is important for all official activities on its operations.
Step 7: VAT registration
It is customary in France for most trading organizations to be registered for Value Added Tax, commonly referred to as V.T.A or TVA in French. This is useful when declaring taxes and is mandatory for anyone who wants to trade in the EU.
Step 8: Registering with the social security organisations
The law requires that you apply for a social security number for yourself and for anyone else you have working for you in your business. This includes premiums for health insurance (and related plans for insuring pension costs), contributions to pension plans, and other forms of mandated social contributions.
Step 9: Obtaining necessary business licenses and permits
In case you are in a certain business segment, there could be the need for particular licenses or permits. For instance, a business person who is handling a business in the food and beverage sector requires health and safety permits.
Step 10: Hiring employees and setting up payroll
In the case of hiring employees you have to adhere to the French labour laws prevailing in the country. Besides this, employment also involves preparing employment contracts, organizing payroll as well as observing labour rules and regulations specifically working hours wages and employees’ rights.
Step 11: Regular compliance and reporting
The administration of an enterprise is subject to regular review of the French tax laws, labour laws, laws regulating companies amongst others. This includes providing financial reports that contain the latest account balance, payroll taxes and ensuring that organizations remit the correct amount required by employment laws. It is important for your company to keep abreast with changes and maintain compliance to rules and regulations.
Documents Required for Registration
- Company Document: Documents required
– Certificate of incorporation, Charter of the SARL Memorandum of Association notarised, Articles of association notarised, Board resolution if necessary or required, National gazette stating the decision of opening the company. - Applications: Application form to be filled for registration and fees and application forms received from Trade Registrar.
- Members’ related details: Organization’s founders data [address, visa, passports, etc.] Organization’s shareholders Identification Document [with translation and certification], Company Manager data [Identity documents, letter of appointment], Manager appointment document and a statement of non-criminal record of the Manager.
Eligibility Criteria for Company Incorporation
Information on Key Executives
All important information concerning the executives should be disclosed while forming your company in France. Such information comprises information of the shareholders’ names, registered address, and any other details showing information of the shareholders, such as Visa information.
Information on Directors
Information required on directors’ list must include the full name of the director, his or her residence address, identification card number, Visa/permit/ID card number, etc.
What Does It Cost to Run a Company in French?
Starting costs for setting up the company
For registration, a SARL, SASU or SA requires €37.45 EUR. Other business structures may have other or the same registration cost. This does not include the cost of a notary or commercial agent. This does not include Articles and journals: commercial agent, notary cost.
Payments for and other quantitative characteristics of the determined compliances, annual returns
Businesses will have to abide by statutory requirements such as the patents and trademarks renewal. It is mandatory to file tax returns before April 30 of the assessment year. It may have charges especially of the nature of the company for the annual returns.
Taxes and Government Fees
Some of them envisage rather high taxation rates in France to be among the highest throughout Europe and such costs should be incorporated in the costs.
The World Bank reports that France stands out in Europe. It's a breeze to run a business there. Why? A key reason is its swift business set-up process. This process is carried out through a single point of contact, often referred to as the Center of Formalities for Companies, or CFE for short.
How Start an Idea can help you in Registering your Company in France?
Setting up a company in France seems to be a sound strategy to venture and grow business in an active economy. By carefully planning your strategic move, respect to law and regulation, as well as seeking help from professional advisors, the new business venture in the French business market can be successful.
Keep it in mind that even the choice of business structure and all foreign steps including compliance, is also highly important for the further building of successful business in France.
Also Read: Company Formation in France: A Comprehensive Guide for Indians
