Can you help me to set up a business in France?
Ever since Macron’s administration took office, France has established itself as a “start-up nation”. It is an attractive place for start-ups and SME’s, as the French government has demonstrated its willingness to invest in these companies as a means to boost the French Economy. Carry on reading to find out what’s involved in the start-up of your company in France.
Step 1: Choose the right type of structure
- Liaison office
- Branch office
- Subsidiary: the most common structure being the SAS
Step 2: Opening a corporate bank account
A liaison office is a great way to test the waters in the French market. Carrying very few of the risks associated with incorporating an SAS, and with significantly fewer financial obligations (no corporate tax, no VAT, no Contribution Economique Territoriale (CFE and CVAE), though it is still necessary to pay local property tax). A liaison office is not a permanent establishment as long as you do not conduct commercial activity, but offers the parent company an opportunity to gain further insight into how their business could function in France. Employees are subject to French labor law and benefit from the French social security system, with their social contributions being managed by URSSAF .
The steps: It is not necessary to register to the Chamber of Commerce as a liaison office, we must just make a declaration of existence to the CFE of the Chambre de commerce et d’industrie . Following this, you will receive your Siren and Siret numbers.
Estimated duration: 3 weeks
A branch is the next level up from a liaison office and offers your company much more visibility and credibility in France because you will have an address. The branch is better for those with more of a plan to permanently set up here in France (more so than just testing the waters), and, unlike a liaison office, can host commercial activity. It can also be a good way to discretely enter the French market, as there is an option to postpone the first filing of your annual accounts (under French law, the first financial year is able to exceed December once and last up to 23 months in duration, if the financial year started in January). Once again, there is no ‘incorporation’ process; no legal forms are chosen and no bylaws have to be drawn up. However, unlike the liaison office, the branch is a fiscal entity, and therefore is liable to pay the same taxes as a resident company. It is important to note that a withholding tax of 30% is applicable to all branch profits generated by non-resident companies (from EU member states), unless otherwise stated in the respective tax treaty. A branch’s employees are subject to the same obligations under the French labor law as the liaison office.
- We must collect all supporting documentation, and the parent company’s bylaws translated into French
- Next, a M0 tax form must be completed as well as a proxy permitting Maupard permission to liaise with the French administration on your behalf
- Once compiled, the dossier is delivered to the Registre du Commerce et des Sociétés (RCS)
- Once registered, you will receive your Kbis certificate and your non-resident employer certificate issued by URSSAF
- The opening of the branch must be declared in the RCS
Estimated time frame: minimum 3 weeks.
The SAS is the most complex of the 3 options to set up, mainly due to the requirement to apply to open a corporate bank account at the same time, which can be a lengthy process. That said, the SAS is the most flexible structure, commonly used here in France. An SAS gives you the most freedom and recognition as a fully registered company, but of course, you will be liable to pay corporate tax, VAT and CET, etc. The employees are, once again, subject to French labor law.
- We collect all supporting documents, including the company’s business plan, domiciliation as well as the appointment of Maupard as a proxy
- Then, the bylaws are prepared and must be translated into French
- Once approved, a notice of the company’s incorporation is published in a local legal journal
- Once everything has been sent to the CFE, you will receive your Kbis certificate, and the process is complete!
Estimated time frame: Assuming that all documentation provided is correct and accepted the first time round for the corporate bank account, this could be completed in a little as 1 month. However, to be realistic, a more feasible time frame would be between 2-3 months, in anticipation of delays and further requests for documentation.
Step 2: Opening a corporate bank account (SAS)
In France, the key process involved in setting up your company is the opening of a corporate bank account (for an SAS). You can expect this application to be a challenging and sometimes time-consuming process, particularly for US citizens with regards to the FATCA requirements in Europe. The key to success here is preparation: preparation of necessary documentation, business plans, cash flow projections, etc. We recognise that the best practice here is to compile everything into a clear, well-presented dossier to be submitted to the bank. To increase your chances of success, we will present your dossier to bankers with whom we have worked in the past and with whom we have built trust relationships. You should also investigate whether your usual bank has a French entity, and if your current bank can provide you with a letter of recommendation from them, it is all a question of trust. If the bankers trust you and your business plan, it is likely they will accept your application for a corporate bank account. To build this relationship of trust, you must come to France to meet with the bankers (we will accompany you) at least once during this process, so be prepared for this. Once all of the formalities have been completed and the account approved, you will receive your IBAN and the account is all ready to go!