Setting up a Business in France: Guide for Foreigners
2023 / OCTOBER 19
- Choice of Legal Status:
The choice of legal status is pivotal as it determines the structure, taxation, and liability of the entrepreneur. The Sole Proprietorship (EI) is the simplest to set up and suits entrepreneurs wishing to work alone. The liability is unlimited, meaning the entrepreneur is liable for debts on their personal assets. The Limited Liability Company (SARL) is ideal for SMEs with multiple partners. It offers liability limited to each partner’s contribution. The Simplified Joint Stock Company (SAS) is flexible in terms of management and profit distribution, making it popular among startups and large businesses.
- Name Availability Search:
Before setting up your business, it’s essential to ensure the name you’ve chosen is unique and not already in use by another entity. This step is crucial to avoid future legal disputes. You can check the name’s availability at the National Institute of Industrial Property (INPI) and the Trade and Companies Register databases.
- Company Domiciliation:
Every business in France must have an official address. This address is used for official correspondence, legal notifications, and taxation. You can domicile your business at your home, rent office space, or use a domiciliation company that will provide an address for your business.
- Drafting of the Articles of Association:
The articles of association are a legal document that defines the operating rules of your business. For SARL and SAS, they determine the share distribution, decision-making modalities, appointment of leaders, etc. It’s essential to draft clear and precise articles to avoid future conflicts among partners.
- Registration with the Trade and Companies Register (RCS):
Registering with the RCS is a formal step that gives your business legal existence. Once registered, you’ll receive a SIRET number, essential for business transactions, contracts, and tax obligations. This step also confirms your business’s legitimacy to clients, suppliers, and partners.
- Opening a Professional Bank Account:
A professional bank account separates personal finances from the business’s. It’s a legal requirement for companies and strongly recommended for sole proprietorships. This account facilitates financial management, accounting, and tax declarations.
- Tax and Social Declarations:
Depending on your legal status, you’ll need to register with different bodies for your tax and social obligations. This might include the Chamber of Commerce, the Chamber of Trades, or URSSAF. These registrations determine your obligations regarding VAT, corporate tax, and social contributions.
- Hiring Employees:
If you plan to hire employees, you must comply with French labor regulations. This includes registering with social security, providing an employment contract, and respecting workers’ rights. France has stringent workers’ rights rules, so understanding your obligations is essential.
- Compliance with Specific Regulations:
Certain activities, like catering, transport, or health, require special licenses or permissions. It’s crucial to check the specific requirements for your sector to avoid sanctions or disputes.
As chartered accountants, we possess in-depth expertise and detailed knowledge of all the steps and regulations related to setting up a business in France. Our role isn’t limited to accounting but extends to comprehensive guidance, from initial conception to the tangible realization of your entrepreneurial project. We understand the challenges faced by entrepreneurs, especially those from abroad, and are committed to providing full support to ensure a smooth transition and successful establishment of your business in France. If you’re considering setting up a business or have questions about the process, don’t hesitate to reach out. We’re at your disposal to guide you through every step of your entrepreneurial journey.