Company Registration in France

Compared to other EU countries, France has a comparatively simple corporate formation process. France is the only nation in the EU that favours private sector investment over starting a firm from scratch. which makes it the favoured place for investors and business owners to launch a venture.

The French government provides a variety of perks and incentives to help the business succeed. The nation is a signatory to agreements like the TRIPS Agreement, which offers substantial protection for foreign intellectual property rights, when it comes to intellectual property protection.

The skilled labour force in France directly lowers the cost of manufacturing the goods. In addition, the nation provides adequate infrastructure and facilities for initiatives including energy, roadways, railways, ports, and other things.

France is one of the friendliest countries for launching a business because to all these alluring benefits. Investors should therefore go through the French company registration process.

Benefits of Company Registration in France

The investors who are considering registering a company in France may benefit from the following:

One of the greatest economies in the EU – With 65 million domestic consumers spending €2 trillion yearly, France has the second-largest consumer market in the EU. With over 83 million tourists visiting each year, the tourism sector is flourishing. France is ranked as the fourth-largest exporter of pharmaceutical items and the second-largest exporter of food and beverage products.

Protection of Intellectual Property –

The TRIPS Agreement, a convention that significantly safeguards international intellectual property rights, has France as a signatory. The uniform patent registration procedure used by all French businesses gives patents in France increased security. International patent protection is offered through this. The World Economic Forum has placed France as the 12th best nation in the world for filing patents. The French government regularly investigates cases of intellectual property infringement, and the maximum fine per infraction is €7,500.

Low-Interest Loans for the Public Sector – French banks serving the public sector provide low-interest loans. This low-interest loan, in the amount of €1.5 million, would be used to finance innovation and R&D projects at businesses that I have fewer than 250 workers, (ii) generate less than €50 million in annual revenue, and (iii) have been in business for at least three years. Equity investment opportunities are permitted for resident unlisted enterprises. All domestic businesses in France have access to credit insurance at a reasonable price.

The government offers tax incentives.

The French government offers a variety of tax advantages and related programmes. Loans to international business owners may have interest rates as low as 2%. Companies would obtain a 7-year exemption from paying corporate tax if the investment was made in one of the French government’s priority areas. Even though the corporation tax rate in France might reach 34%, investing in some areas can reduce the net effective tax rate to just 9%. The government also offers additional exemptions from social security.

Excellent location for FDI: France has surpassed the United Kingdom to take the top spot for attractiveness for FDI. In the year 2020, about a thousand FDI projects were approved for France, with the majority of those projects being in the software and IT sector.

Excellent Infrastructure: The nation provides adequate energy, transportation, and other infrastructure, including ports, railroads, and highways.

Regulatory Authority/ Body for Company Registration in France

The Register of Trade and Companies is France’s main regulatory body for company registration (RCS).

Eligible Business Structures under Company Registration in France

An applicant registering a company in France would need to select an appropriate business structure. The following are examples of French business structures that entrepreneurs can use:

• Société à responsabilité limitée (SARL), a French LLC

This type of organisation is also referred to as a SARL, which is the French term for a private limited company. Due to its benefits for small business owners, such as its minimal capital needs and straightforward incorporation processes, this type of business vehicle is frequently used by entrepreneurs running small and medium-sized firms.

There must be one shareholder, one director, and a minimum share capital of €1 for this form of company. The director must not be a corporate body. The shareholders may agree on the minimal amount. An LLC can be formed in a short period of time. The residence requirements for an LLC’s stockholders and directors are unrestricted. Their shares may be listed on the stock exchange, but they do not have access to the financial markets.

There may be no more than 100 shareholders, and there may only be one class of stock issued. The shareholders are not personally liable. The manager has extensive authority to represent the business before outside parties. The meeting resolutions are composed of the company’s bylaws and shareholder meeting resolutions. The approval of the accounts must be done at the annual shareholders meeting each year.

• A partnership

is an arrangement whereby the partners split the company’s profits. The assets and liabilities of the business are divided among the participants in a partnership. In France, a variety of partnership arrangements, including general partnerships (SNCs), limited liability partnerships (SCSs), civil companies, civil real estate companies (SCIs), economic interest groups (GEIs), SCAs, and more, can be established.

• Simplified Joint Stock Company (société par actions simplifiée or SAS)-

Due to the extreme freedom it gives the shareholders in tailoring the firm to their needs, this type of corporation is appropriate for establishing holding companies and start-up businesses. These companies’ managers may be either natural or legal persons.

Shareholders are free to choose the rights that come with their shares. When a few requirements are met, an auditor must be appointed. It is unable to conduct public offerings, hence its shares are not eligible for stock exchange listing. There is no set management structure for SAS other than the appointment of a company president who has the most authority within the organisation and uses that power to the fullest extent possible when speaking on behalf of the company to outside parties.

The French LLC and this Corporation are comparable. One shareholder and one director are required for this sort of corporation, and one euro is the minimum amount of capital needed. The maximum number of stockholders for SAS has no upper bound. Directors can be chosen by companies to run this type of business. Within six months of the end of the previous fiscal year, they must hold an annual shareholder meeting for the approval of their accounts. Decisions about management must be made in France.

• French Public Limited Companies (Société anonyme or SA) –

This type of corporate entity is typically intended for huge corporations as it enables the company to offer shares publicly to the market as they need a large quantity of capital. The first incorporation in France is not advised due to the mechanism’s complexity.

The minimum share capital for a formation similar to a public limited company would be required in France. A French Public Limited Corporation must be established for €37,000 in order to be created. There must be at least two (and seven if the company is publicly traded) shareholders, and there is no upper limit on the total number of stockholders.

A SARL’s management structure consists of one of the following:

1. An Executive Board with a maximum of 5 members and a Supervisory Board with a membership range of 3 to 18 members.
2. When the SA’s share capital is less than €150,000, one individual has been given permission to operate in place of the directorate. Yet, this business must adhere to the capital criteria. The management of the audits must be entrusted to an auditor.

The member is not personally liable for the debts or liabilities of the firm. Bylaws, resolutions from shareholders’ meetings, a share transfer register, shareholders’ accounts, and other papers are typically included in a charter.

European Stock Corporation: The European Stock Corporation can be created by combining two or more EU enterprises. However, establishing this type of organisation requires a minimum of €120,000.

• Branch Office:

A branch office (succursale) is an ongoing location that is not a distinct legal entity from its parent organisation. These offices are established during a company’s startup period. Foreign shareholders own the lion’s share of the branch office’s control. All branch office debts must be paid by the main firm. A minimum amount of paid-up capital is not necessary to establish a branch office.

A representative office, also known as a bureau de représentation, is a branch office of a foreign parent firm with plans to operate in France. It does not exist independently of its parent firm. Without having a trade goal, the representative office’s aim is to watch the local French market for business prospects and carry out market research, marketing, and promotion operations.

Contracting and trading on behalf of the parent firm are not permitted by the representative office. It is merely a contact point via which potential customers and business partners can learn more about the overseas parent firm. The first step in establishing a subsidiary or branch office in France is the establishment of a representative office.

As a subsidiary of the parent firm, the representative office’s operations are fully liable for by the corporation. The Companies Formalities Center of the location where the company will be located, not the RCS, is where a representative office in France must register. A tax identification number is given to it, enabling the opening of a bank account.

To represent the representative office’s activities in France, the representative office must designate a representative who is a French resident. A certificate of incorporation, the parent company’s articles of association, a board resolution to establish a representative office in France, a passport, and any other identification documents for the person registering the office in France are among the paperwork needed.

There is no minimum capital need to set up a representative office in France, however these offices cannot conduct any sales-related activities. Only to establish the company’s presence in France is the office registered. Nonetheless, foreign shareholders may have authority over this office. There is no minimum paid-up share capital requirement, similar to the Branch Office.

Eligibility Criteria for French Company Formation

The following eligibility criterion has to be sufficed for company registration in France:

• Clause of Objects:

The objects for which the company is created must be stated in the memorandum of association’s objects clause.

• Details on key executives

While requesting company registration in France, all pertinent information about the executives must be submitted. Information about the shareholders’ names, the registration address, and other details would fall under this category. In addition to this, further shareholder-related information must be disclosed. This would comprise data pertaining to the visa.

• Details about Directors

It is necessary to provide details on the company’s directors.

• Minimum Capital-

A candidate for French business registration must also meet the minimum capital requirement for French company creation. The minimal capital requirement, which might be as low as €1, shall be determined by the shareholders in the AOA whether the application forms a French LLC or a Simplified Joint Stock Company. Yet if the business is a French Public Limited Company, €37,000 in capital is needed as a minimum. At the time of registration, one-fifth of the authorised capital must be paid.

Procedure for Company Registration in France

A potential applicant must adhere to the following procedure in order to register a corporation in France:

• Choose the Proper Structure

Verify the name on the Commercial Court Registry and the French Patent and Trademark Office (INPI) websites.

Create a corporate bank account to deposit the stock capital of the company.

Take a look at the stockholders and guarantors (PSC)

Compile the necessary paperwork for the company’s operation and register it.

choose a Suitable Structure-

The applicant for a French company registration must first select an acceptable business structure or vehicle. This would depend on the applicant’s business requirements. The French LLC would be a good choice if the applicant wanted to launch a business.

Verify the name on the websites of the Commercial Court Registry and the French Patent and Trademark Office (INPI).

The applicant must check for a distinctive name in the following stage. The company name must not be insulting and must not conflict with any names already used by French companies.

Create a corporate bank account to deposit the stock capital of the company.

The applicant must open a business bank account as the following stage. There are various kinds of banks that offer banking services to businesses, including BNP Paribas, HSBC, and Societe Generale. It is advised to compare the services provided by all banks before deciding on a suitable bank.

Register at the Centre de Formalites des Enterprises –

The applicant would need to register with the Centre de Formalites des Enterprises in order to register a company in France after creating a corporate bank account. Through this organisation, all additional business and tax compliances would be handled.

The organisation to obtain registration from is the Chambre des Métiers et de l’Artisanat for various types of enterprises, such as those relating to trades or artisans and for independent or freelance professions (CMA). In a similar vein, the Chambre d’Agriculture is the proper place to register a corporation if the business is related to agriculture (CA).

Post Legal Notice of Incorporation on JAL Announces Legales –

The applicant must post a legal notice of incorporation in the neighbourhood newspaper JAL Announces Legales as the following step. To formally and publicly introduce the company to the business world, this procedure is required.

Getting the Identity Number:

This information will be given to the Register Nationale des Entreprises after the Centre de Formalites des Entreprises has received the required paperwork. SIRENE (Systeme Informatique pour le Repertoire des Enterprises), SIRET, and NAF (Nomenclature des Actions Francaises) numbers would then be given to the business.

Corporate Tax in France

In France, the corporate tax rate is 33.33%. This rule would be applicable to all companies with offices in France. So, a candidate seeking company registration in France would be required to pay this amount of corporate tax.

• In France, there is a 20% VAT charge. All enterprises in France must pay VAT, an indirect tax.
• In France, a withholding tax is applied to all dividends. All companies that pay dividends must withhold 25% of the dividends. The increased withholding tax rate will take effect on January 1st, 2022.
• Corporate tax returns must be filed by businesses by April 30.
• Businesses are free from paying corporate taxes if they invest in priority sectors. The duration of this exemption is seven years.

Documents for Company Registration in France

For the purpose of forming a corporation in France, the following papers are necessary:

• Information about the Company’s Founders: This will include their address, passport numbers, visa numbers, and other pertinent data.
• Translation and notarization are required for the shareholders’ identification documents.
• Details on the company’s managers, including copies of their identification documents and letters of appointment
• Application Form for Registration and Fees, Management Document, and the SARL Charter
• a declaration that the management has never been convicted of a crime
• Articles of Association and the Memorandum of Association must be notarized
• Board Decision ( If required)
• Application forms issued by the Trade Registrar Publication of the decision to open the firm in the National Gazette

Frequently Asked Questions

Which type of business should you choose?

A French LLC would be the finest type of company to choose for company registration in France since this business structure offers the advantages associated with limited liability. In addition, professionals use the company to launch a commercial venture.

How long does it take in France to form a company?

A French corporation can often be incorporated in two weeks.

Are resident directors required for French companies?

No, French businesses do not need local directors. Directors may be from any country.

Do I have to go to the French Companies Registry to register my business?

No, the complete French company registration procedure is done online.

A French Public Limited Corporation (SA) has how many shareholders and directors.

There must be a minimum of three directors and seven shareholders for a French Public Limited Corporation (SA). It is not necessary for the stockholders to be French citizens.

Exists a minimal capital requirement for French company registration?

Indeed, there is a €1 minimum capital need for a French LLC or a Simplified Joint Stock Corporation. But, €37,000 is needed to set up a French Public Limited Corporation (SA).

Are foreign nationals permitted to be hired by French companies?

Absolutely, foreign nationals may be employed by French companies. They must, however, adhere to immigration and the French Work Code regulations.

What are France’s tax rates?

VAT and corporate tax are mandatory for French businesses. The VAT rate is 20%, and the corporate tax rate is 34%. According to the regulations for corporate tax and VAT, all businesses must register.

What are the advantages of forming a business in France?

The EU’s second-largest consumer market at the moment is France. Please refer to the details above for the full list of advantages.