Business regulations in France

Are you looking to register your business in France? In this article, we’ll help you explore this prospect in detail, by guiding you through the process, and by considering the business regulations in France to ensure your new business venture is a success.

Can I start business in France as a foreigner or a UK citizen?

In principle, anyone is free to start a business in France. Some sources may tell you otherwise, but it is not actually mandatory to live in France to start your business (although being a resident in France can accelerate the process).

Even if you live in the UK, it is always possible to open a company in France by registering the business address in the country. 

However, for UK citizens specifically, it is important to consider any changes in regulations and requirements that have arisen due to Brexit. This may include additional permits or visas needed for UK citizens to live and work in France. Be sure to stay up-to-date on any developments and consult legal experts if necessary.

How to register a business in France

To register a business in France following the regulations, our top recommendation is to seek an advisor who can provide professional assistance. However, if you want to start the process yourself, we recommend following these steps:

1. Register your business name

First things first, you probably have an idea of what the name of your business will be. It is crucial that this name is unique, not only within France but also at European level. To ensure its availability in France, you can verify its uniqueness at the French National Institute of Industrial Property (INPI).

Additionally, it is worth considering registering your business name at the European Union Intellectual Property Office (EUIPO). This will provide your business with protection across all EU member states, the safeguarding of your brand and the prevention of potential conflicts with other companies operating within the European market.

2. Register your status

Draft the status of your company, which will describe the purpose, rules, and regulations of your business. We recommend you do this with a professional who specialises in advising on these procedures, or with a solicitor. In the by-laws, it’s crucial to be specific about your business by clearly defining your product or service.

At this stage, you’ll also need to define the category your business belongs to. French businesses are divided into four categories:

• Commercial or industrial: shops, factories, restaurants, consultancies…
• Trades/artisan: artists, construction…
• Agricultural
• Independent or freelance professional.

3. Find a location

It’s important for your company to be located in France to comply with all the documentation processes that will follow. Therefore, whether it’s an office, commercial space, or manufacturing facility, you’ll need to find a place where you want to get set up, even if it’s temporary. This will allow you to begin paying certain utility bills, which will be very useful during registration.

4. Open a bank account in France

It is mandatory to open a business bank account in France to manage your company’s finances. You may already need to deposit a minimum amount, depending on your chosen legal structure. Keep in mind that you can do this remotely nowadays.

Even though it may seem easy to open a bank account, it’s important to have a solid foundation for your business, as some French bankers can be very selective and may ask you numerous questions about your enterprise.

Once you manage to open your account, make sure to deposit the required capital there. In some cases, like for EURL, SARS, or SAS companies, the minimum is €1, but in some instances, it can be around €4,000.

Bear in mind that you won’t be able to access the deposited money until the bank receives the Kbis (certificate of your new company), which will take about 2 weeks to arrive during your registration. However, if you withdraw from the process of creating a business in France, you can always recover that money.

5. Obtain the necessary permits and licences

Before registering your business, it’s important to have everything in order. Therefore, depending on your activity and following the recommendations of your advisor, you’ll need to obtain various permits and licences. This will depend on your situation, of course, and could also include the need to obtain a visa or residence permit in France.

Some regulations and permits that are almost always necessary are: 

• Trade Register (Registre du Commerce et des Sociétés or RCS): all businesses operating in France must be registered with the RCS. This process will provide your business with a unique identification number called the SIREN number.
• Professional Licence (Licence Professionnelle): certain professions, such as bars, restaurants, and tobacco retailers, require a specific licence to operate. You’ll need to apply for this licence through the relevant local authorities.
• Health and Safety Regulations: depending on your industry, you may need to comply with specific health and safety regulations, such as obtaining permits for food handling or hazardous materials. Be sure to consult the appropriate regulatory bodies for your sector.
• Environmental Permits: if your business is likely to have an impact on the environment, you may be required to obtain permits related to water discharge, waste management, air emissions, or noise pollution.
• Building Permits and Zoning Regulations: if your business requires the construction or renovation of a commercial space, you’ll have to obtain building permits and ensure that your plans comply with local zoning regulations.
• Employment Regulations: Businesses with employees must adhere to French labour laws, including registering with the appropriate social security agencies, setting up a workplace health and safety committee, and providing proper employee documentation.

6. Register your business

Can you remember the category you defined in your business by-laws? You’ll need to take it into account and approach the appropriate centre when registering your business in France. Here are the links:

• Centre de Formalités des Entreprises (CFE): for commercial/industrial and independent/freelance categories
• Chambre des Métiers et de l’Artisanat (CMA): for the trade/artisan category
• Chambre d’Agriculture (CA): for the agricultural category

By following the instructions provided by each portal, you’ll obtain certain documents that will be necessary further down the line.

To proceed with the registration, you’ll need the previously mentioned documents plus a few others that serve as proof of the business being genuine. Some examples of the documents you’ll need to include:

• A completed application form
• A certified copy of each director’s or shareholder’s passport
• At least two utility bills less than three months old, as proof of your business address

The CFE or the appropriate Company Register (RCS) will provide you with a company registration certificate called “extrait Kbis” within 24 hours. It will also send the necessary information to various administrations (National Institute of Statistics and Economic Studies, INSEE; Tax office, Centre des Impôts; Commercial Court, Greffe du Tribunal de Commerce; Social security office, URSSAF). The procedure has recently been made much easier and everything can now be completed online.

Upon receiving the “Extrait Kbis” (certificate of incorporation proving your registration), you’ll be given a unique 14-digit registration number comprised of a SIRET and SIREN number, which is the identification number of your company and must appear on all official documents, invoices, and websites. You’ll also have an APE or NAF code, which identifies the main activity of your business.

If you wish to import and export products internationally, you’ll need to request an EORI (Economic Operators Registration and Identification) number from the French customs authorities.

Insurance for your business in France

Depending on the nature of your business, you may need to obtain specific types of insurance coverage. For example, professional liability insurance or insurance for company vehicles. It is important to research the types of insurance required for your industry and to obtain the appropriate coverage to protect your business.

Study and comply with French labour laws

Ensure your business complies with French regulations regarding labour, especially if you’re going to have employees under your supervision. Look into details such as working hours, the minimum wage, employee benefits, and so on.

To find this information and much more, you may find it helpful to consult the comprehensive Practical Law document on Establishing a Business in France, which answers many questions any prospective entrepreneur may have regarding legality in France.

Understanding French tax laws

Another crucial aspect of running a successful business in France is familiarising yourself with the country’s tax laws. Both corporate and individual taxes may apply, and it is recommended to be accompanied by a specialised law firm when navigating this complex landscape. Some key considerations include:

• Corporate Income Tax (Impôt sur les sociétés or IS): French companies are subject to corporate income tax on their profits. The tax rate varies depending on the company’s turnover and other factors. Ensure you are aware of the applicable rates and reporting requirements for your business.
• Value-Added Tax (VAT or TVA): most goods and services sold in France are subject to VAT. As a business owner, you are responsible for collecting and remitting VAT to the French tax authorities. It is essential to understand the different VAT rates and the specific goods and services they apply to.
• Payroll Taxes and Social Security Contributions: employers in France are required to withhold payroll taxes and social security contributions from their employees’ salaries. These contributions fund various social welfare programmes, such as healthcare, unemployment insurance, and pensions. Ensure you are compliant with these regulations and have a system in place for accurate reporting and payments.
• Local Taxes: depending on your business location, you may be subject to additional local taxes, such as the Taxe Foncière (property tax) and the Contribution Économique Territoriale (local economic contribution). Make sure you are aware of any local taxes that may apply to your business and factor them into your financial planning.

Language requirements and the importance of French

While not explicitly a legal requirement, we have to admit it is important for foreign entrepreneurs to be aware that having at least a basic understanding of the French language can be highly beneficial when starting a business in the country. 

Business dealings, legal paperwork, and communication with local authorities and customers will often be in French. As such, learning the language or partnering with someone fluent in French can be essential for success.

Do you need further information on setting up in France?
Contact us for free and confidential support.