Are you a foreign company executive considering establishing a business in France? Are you wondering about the administrative formalities or the possible business structures? Here are the essential pieces of information you need to create a company in France. We explain who is eligible to undertake such a process, what legal statuses are allowed, and how to proceed practically.
1- Can a foreigner create a business in France?
Foreigners are authorized to establish a professional activity in France. However, certain rules must be followed.
Here is the essential information to know.
1.1- Who can start a business on French territory?
There are regulated professions reserved for French citizens, nationals of the European Union (EU), the European Economic Area (EEA), or even countries that have signed a reciprocity agreement with France. If your activity is authorized in France, you must complete the personal steps as a business creator and those related to registration.
1.2 – Specific procedures for foreigners to create a business in France
A foreigner wishing to create a business in France is subject to formalities that depend on their place of residence and country of origin. Let’s focus on the cases of foreign nationals, i.e., citizens outside the EU, Switzerland, and the EEA. We will distinguish their situation based on their intended place of residence.
a – Foreign nationals outside the EU, EEA, and Switzerland, with future residence in France
Before arriving in France, a foreigner must apply for a long-stay visa type D, valid for 3 months to one year. Once in France, other steps are required. They must then request either:
- a “talent passport” (a system intended for economic attractiveness);
- a temporary residence permit with the mention “entrepreneur/liberal profession,” valid for a maximum of one year, followed by a multi-year residence permit.
Note that these formalities require justifying the approach and the economic viability of the project. Liberal professions must even present a minimum level of resources. However, holding certain resident or residence cards allows avoiding this specific procedure. GoFrance Partners guides you in case of doubt about these systems.
b – Foreign nationals outside the EU, EEA, and Switzerland, without future residence in France
A foreigner who continues to reside outside of France is not subject to any particular formality other than those related to the creation of the business itself. The law of January 2, 2014, abolished the prior declaration previously made at the prefecture.
2 – What type of business to establish in France?
Several business forms are possible for creating a business. By understanding how each works, a foreigner wishing to set up a business in France can optimize its administrative, legal, and fiscal organization. At GoFrance Partners, our experts also support you in this process.
2.1 – The liaison office in France
This is the lightest form of conducting professional activity in France. A liaison office does not have legal personality. No tax declaration is required. This format is reserved for non-commercial activities. It is also referred to as a representative office. It is used for canvassing, prospecting, and promoting a brand or products, but never for selling.
It is an ideal step for an entrepreneur wishing to study the local market and adapt their offer to France. The foreign parent company assumes all French expenses.
2.2 – The branch of a foreign company
This intermediate form corresponds to an autonomous company in its local operation, with a business, but still without its legal personality. The branch, therefore, has neither assets nor share capital. It is essentially a local agency of a foreign company.
As a stable establishment, the branch must comply with French tax regulations for VAT and income tax. The existence of tax treaties with certain foreign countries, including the USA, avoids double taxation. Note that you do not have to make a declaration for prior authorization with the Treasury. However, the branch must register in France.
2.3 – The subsidiary of a foreign group, a separate entity
This is the most complete form of business. Majority or wholly owned by a foreign company, the French subsidiary has legal personality. SARL (limited liability company), SAS (simplified joint-stock company), SA (public limited company), etc., you have a choice of legal status.
Creating such a company in France involves complying with all local accounting, social, and tax rules as a stable French establishment. Be aware that certain sensitive activities require prior investment authorization under Article L.151-3 of the Monetary and Financial Code.
3 – How to create your business in France?
You now know the possible forms for opening a business in France as a foreign citizen. You also understand the formalities to be completed personally if you plan to become a resident in France. But how to organize this business creation? How to get support from the idea or project study to the legal and administrative setup of the activity?
3.1 – Determine the appropriate business format for your entrepreneurial activity
For foreign entrepreneurs wishing to establish a business in France, one of the first steps of the project is to choose the type of business carefully. GoFrance Partners, an accounting firm, advises you in this preliminary study. They guide you and explain the accounting, administrative, and fiscal consequences of each solution. They draft the company’s articles of association, SA, SARL, SAS, etc., if necessary. They prepare any French employment contract.
3.2 – Get support for French administrative procedures
Foreign entrepreneurs must complete all the usual business creation formalities in France, in addition to those specific to their foreign status. If seeking public assistance to launch an activity in France, the procedures can also be complex.
In this administrative project management, GoFrance Partners supports foreign companies and handles the formalities and relations with the authorities. Our firm also assists in finalizing the partners’ contributions, drafting a shareholders’ agreement, or a legal notice.
3.3 – Registration formalities for a foreign company in France
Here are the administrative steps to create your business in France, for which we assist any foreign executive from A to Z:
- Registration with the Sirene directory at the CFE in case of a subsidiary or branch (stable establishment);
- Registration with the RCS (Commercial and Companies Register) for a commercial activity or the RM (Trades Register) for a craft activity;
- Domiciliation of a foreign company in France, regardless of the chosen form (assignment of an administrative address);
- Formalities for hiring employees in France for all types of statuses (office, branch, subsidiary);
- Formalities with the CNFE (National Center for Foreign Firms) when hiring employees in France by a foreign company without a stable establishment;
- Registration with the SIEE (Foreign Companies Tax Service) for a foreign company without a stable establishment and without employees.
To create a business in France, we recommend any foreign entrepreneur, at all stages of the project, to be accompanied by professionals based in France. Contact GoFrance Partners, an accounting firm with an international focus, specializing in this type of service for foreign companies.
