What is treasury management? Find out in this helpful guide to companies trading overseas.
France, as one of the world’s largest economies, and the most visited countries on the planet, is an astonishingly popular destination for expats looking to settle. It's estimated that over 200,000 people a year move to France, accounting for the fact that nearly 20% of the population are first or second generation immigrants.
As a vibrant, modern country with a developed economy, many expats choose France as the place to launch their own business. If you're considering moving to France to work for yourself, then you need to know a bit about the processes and legalities of creating a business there.
Read this no nonsense guide to starting a new enterprise in France.
The most important initial decision you'll need to make is which type of corporate structure will suit your needs in France. This matters because different business types are treated differently in law and by the tax authorities.
There are many different types of corporate entities used in France - here are some of the most common:
- Sole proprietorship ( entreprise individuelle )
- Commercial partnership ( société en nom collectif - SNC )
- Limited liability company ( société à responsabilité limitée - SARL )
- French joint stock company ( société anonyme - SA )
- Simplified stock corporation ( société par actions simplifiée - SAS )
The sole proprietorship model is popular for those looking to work predominantly alone, such as freelancers or individual tradesmen. In this case your tax affairs and those of the company aren't separate, meaning you have liability for any debts accrued in the course of your work. Alternatively, it's possible to set up an EIRL - Entreprise individuelle à responsabilité limitée - in which you work as a sole trader but with some limitations on your liabilities.
A partnership, as elsewhere in the world, is intended for businesspeople to work in collaboration. The SARL format is similar to the LLC format used in the USA, or a private company limited by shares in the UK. An SARL must be founded by 2 to 50 shareholders, and have a director, who is often salaried.
A joint stock company, known as a SA, is quite difficult to start and has a heavy administrative burden. However, in this company type shares can be traded on the stock exchange, similar to a publicly limited company elsewhere. The risk to investors is limited to the amount initially paid in, which must be at least €37,000.
The simplified stock corporation (SAS) is a stripped down version of the SA company structure. In this case you need a minimum of two shareholders to set up (compared with the SA requirement of 7), and opening capital of €23,000. However, shares can't be publicly traded.
Choosing a company structure and setting up your business legally can be complex, especially for the more sophisticated business structures.Taking legal advice and getting the support of an accountant early on is advisable, and in the case of some business structures, absolutely necessary.
The amount you need to invest varies by business type. Sole proprietors don’t need to invest any money to register their activities. A SARL can be set up with as little as €1, while you'll need €37,000 to start a SA company.
If you're registering a company then you should check that the name you've chosen isn't already taken. You can do a free simple check, or pay for a more detailed search. If you want to have exclusive use of the name you choose, you can register it at a cost (although this isn't legally required in France as it is in some other jurisdictions).
Exactly how you go about opening your business depends on the type of structure you select.
Setting up business as a sole proprietor in France is fairly easy. You need to register your activities (usually with the local chamber of commerce) but you don't need to invest any capital, or produce accounts. The exact process varies depending on the type of business you're going to operate, as some other licensing requirements might apply.
To register a SARL you'll initially need the following:
- Articles of incorporation (which must be signed in the month prior to registering your business)
- Proof of business address
- Notice of company formation, published online in a legal gazette
These documents are taken, along with the named director’s proof of ID to the local ‘centre de formalités des entreprises’ (CFE). You may need to provide further documentation depending on the specific application, but once it's accepted you'll be given a receipt which allows you to make preparations for your business (but not start trading). The receipt can be used to allow you to set up a business bank account, for example. The CFE will pass your application details on to all the relevant authorities, and once the registration is complete you'll get a certificate which allows you to actually start trading.
Registering a SARL comes with a registration cost, which depends on the nature of the business. You can expect it to be in the range of €300 for the registration process, with a minimum initial opening investment of only €1.
If you've registered a SARL company then the CFE will pass your details onto the necessary authorities as part of your registration. They'll inform the tax authorities, social security and labour inspection agencies, as well as the national statistics bureau and any regulatory authorities required.
You'll also need to pay tax on your earnings. This is fairly complex and you're advised to find a professional accountant to help you with this. Basically, if you're self employed, you're taxed on your earnings as though you and your business are one entity. You may also be liable for a professional tax. If you have a business this is usually dealt with as a separate entity and charged a company tax, professional tax, and in the case of businesses employing others, taxes relating to this too.
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Once you've decided to start your business in France, you should start to build your support network there. If you’re registering a SARL at your local CFE, they'll be able to advise you about local networking groups and support you might benefit from. Another option is to look at the support and funding offered through the European Union. The Enterprise Europe Network is a good place to start. There are also grants, funds and competitions open through the EU, which might apply to your business. More can be found on the business pages of the EU website.
If you’re an entrepreneur then there are various associations who can help, such as BGE or La French Tech. Alternatively, if you're running a more traditional business, look at local chambers of commerce. Here you'll find others in your industry who can offer sage advice, as well as a ready made group of like minded people. Depending on your nationality, you might also find associations dedicated to help build bridges between your home country and France. The Franco-British Chamber of Commerce is an example of this.
Once you’re in France and ready to get going, look for local networking events on sites such as Meetup, Eventful and Eventbrite. Here you can meet a wide range of new people and build your customer and business contact book.
With some planning, and a little help from your new network and friends, your business will get off to a flying start.
While you’re looking to fund your new venture from abroad at the least possible cost, consider using Wise. Not only do their real mid-market exchange rates generally beat the banks, but since your money is received and sent locally in both your home country and in France, all those nasty international fees magically disappear. Give it a try.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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