If you’ve been dreaming of setting up your business in the beautiful country of love, then it’s time to turn those dreams into reality. France is an attractive destination for entrepreneurs who want to take advantage of the country’s rich cultural heritage, vibrant economy, and welcoming business environment. In this comprehensive guide, we’ll walk you through the process of incorporating a company in France.
Introduction to France
France is one of the most popular tourist destinations in the world, and it’s not hard to see why. This beautiful country is home to some of the world’s most iconic landmarks, including the Eiffel Tower, the Louvre, and the Champs-Elysées. The country also boasts a rich cultural heritage, with a vibrant art and music scene, delicious cuisine, and a lively nightlife.
In addition to its cultural attractions, France is also one of the world’s leading economies. It has the world’s sixth largest GDP, and is a member of the G7 and the European Union. In 2020, France’s GDP grew by 4.6%, making it one of the fastest growing economies in the world.
What You Need to Know Before Setting Up a Business in France
- Before you start the process of setting up a business in France, there are a few things you need to know. First, you need to understand the different types of business structures in France. There are three main types of business entities in France: the limited liability company (SARL), the simplified limited liability company (EURL), and the joint-stock company (SA). Each type of entity has different requirements and advantages, so it’s important to understand which one is right for you.
- In addition to understanding the different types of business entities, you also need to understand the legal and tax requirements in France. The French government has strict requirements for businesses, including registering with the local Chamber of Commerce and adhering to local labor laws. You’ll also need to understand the tax requirements in France, as the country has some of the highest taxes in the world.
The Benefits of Setting Up a Business in France
Despite the high taxes and legal requirements, there are many benefits to setting up a business in France. The country has a strong economy and a highly-skilled workforce, making it an attractive destination for entrepreneurs. The French government also offers numerous incentives for businesses, including grants and tax credits.
France is also a great place to do business because it offers access to the European Union’s single market. This means that businesses in France can easily access the 500 million consumers in the EU, making it a great place to start a business.
Business Structures in France
As mentioned above, there are three principal types of business entities in France: the limited liability company (SARL), the simplified limited liability company (EURL), and the joint-stock company (SA).
- A SARL is the most commonly used type of business entity in France, and it offers limited liability protection for the owners. It’s a great option for small businesses, as it requires just one owner (shareholder) and it’s relatively easy to set up. It allows up to 40 shareholders. In SARL, partners' liability is limited to the amount of their contribution, while the minimum capital for this type is 1 euro. Almost all activities can be carried out in SARL (with a few exceptions) in case they are legal.
- An EURL is a simplified version of a SARL, and it’s an excellent choice for small businesses that don’t need to have a complex corporate structure. It’s also simple to set up, and it only allows one owner maximum. The sole shareholder of EURL may be a natural or legal person.
- Finally, a SA is a joint-stock company, and it’s the most complex type of business entity in France. It requires multiple owners, and it’s a suitable option for larger businesses that need to have a diverse corporate structure.
The Process of Incorporating a Company in France
The average French company registration period is 9 weeks. The process of incorporating a company in France is straightforward, but there are a few steps you need to follow:
- First, you need to decide on the type of business entity you want to set up. Once you’ve decided on the type of entity, you need to register your business with the local Chamber of Commerce and obtain a business license.
- Next, you need to open a business bank account in France. You’ll need to provide the bank with the necessary documents, including your business license and proof of identity. Once your bank account is open, you need to register for taxes in France. You’ll need to provide the necessary documents to the local tax office.
- At the final stage, you need to register your business with the French government. You’ll need to provide the relevant documents to the local government office.
Taxation and Accounting Requirements
As stated earlier, the French government has some of the highest taxes in the world, so it’s important to understand the taxation and accounting requirements before setting up a business in France.
- First, you need to get clarity on taxes in France. The general corporate tax rate is 25%. For small-medium companies (turnover less than 7.63 million), there is a reduced tax of 15% on the first 42,500 Euros of profit, and 25% on the profit above. In relation to a value-added tax (VAT), the standard rate of VAT in France is 20% applied to the supply of services and goods. There are reduced rates of 5.5% or 10% which are applicable to certain goods and services. Moreover, there is a special rate of 2.1%, which applies to a limited scope of goods and services such as television and socialized medication licenses.
- Secondly, you also need to understand the different accounting requirements in France, such as keeping detailed records and filing annual accounts.
- In addition to understanding the taxation and accounting requirements, it’s also important to understand the French government’s incentives for businesses. The French government offers numerous incentives for businesses, including grants, tax credits, and subsidies.
Contact Golden Harbors to receive all the details.
Obtaining a France Residence Permit
If you want to set up a business in France, you’ll need to obtain a French residence permit. This permit will allow you to live and work in France for a period of time, and it’s relatively easy to obtain.
The basic requirements are that you have to purchase or lease a property in France for a period of one year for any amount, show proof of €36,000 in a bank account and proof of passive income of €3,000 or more per month.
The process is fast and simple. The first step is to register for a national visa "visiteur" at the Embassy of France. It takes around 2 weeks. The second step is to enter France within 2 months and register documents in the French Office for Immigration and Integration (OFII) and receive your residence permit.
Obtaining French Citizenship
If you want to stay in France long-term, you may be eligible to apply for French citizenship. This is a complex process, and it’s important to understand the requirements before applying.
The first requirement is to have a permanent residence permit. The second requirement is to have a minimum of five years’ residency in France. You’ll need to provide proof of your residency, such as tax returns and rental contracts. You’ll also need to pass a French language test and a French history and culture test. Once you’ve passed the test, you’ll be eligible to apply for French citizenship.
In conclusion, setting up a business in France is a great option for entrepreneurs who want to take advantage of the country’s vibrant economy and rich cultural heritage. There are a few things you need to consider before setting up a business in France, such as understanding the different types of business entities, understanding the legal and tax requirements, and obtaining a French residence permit. Finally, if you want to stay in France long-term, you may be eligible to apply for French citizenship.
If you’re ready to take the plunge and set up your business in the country of love, then make sure to apply for a French residence permit and French company incorporation with Golden Harbors. We’ll make sure that you have all the information you need to make the process of setting up a business in France as smooth and hassle-free as possible.