Company Formation FAQs

• What is the best way to deal with company registration in France?

  There is no fixed pattern for French company formation. Options range from opening a small Representative Office (bureau de liaison), through to acquiring an existing company or setting up a new business from scratch.

• Is a foreign-owned company at a disadvantage?

  To some extent. Unless foreign identity is part of the marketing strategy, most foreign investors prefer to adopt a fairly low profile and project a local image. An easy way to do this is simply to acquire a local company.

• What is the most common type of French company formation?

  There are three main forms of business entity to incorporate in France:

  • Business Corporation – Societé Anonyme (SA)
  • Specialists Limited Company – SARL
  • Simplified Stock Corporation – SAS
• What are the requirements for an SA company?
  • The minimum share capital is €37,000, of which at least half must be paid up
  • The company must have at least seven shareholders
  • Shareholders are liable up to the limit of their capital contribution
  • Services accounts must be audited in line with statutory requirements
  • Top managers are treated as employees for tax and social security purposes
• What are the requirements for a SARL company?
  • The minimum share capital was recently reduced to €1.00
  • The minimum number of shareholders is one
  • Shareholders are liable up to the limit of their capital contribution
  • Accounts must be audited in line with statutory requirements
  • Top managers have more onerous tax and security rules than SA managers
• What is an SAS company?

  The Societé Par Actions Simplifieé (Simplified Stock Company) is a relatively new type of entity in France. It is a vehicle for creating a joint venture between a local company and a foreign partner.

  Previously, companies in France had found it difficult to enter into joint-venture relationships with foreign companies because of the rigidity of their corporate law.

  However SAS companies are increasingly finding favour with foreign investors, particularly in the USA, who wish to set up subsidiaries in France.

• What are the requirements for an SAS company?
  • Opening a business bank account for an SAS requires an initial share capital deposit of around 4,000 euros as there is no minimum required anymore
  • The company must have one or more shareholders
  • Shareholders are liable up to the limit of their capital contribution
  • There is no need for a board of directors
  • An auditor is required if the business controls one or more companies and it is also required if it exceeds two of the three following thresholds: €1,000,000 of total assets, €2,000,000 of turnover or 20 employees.
• How easy is it to recruit staff?

  Recruitment itself is reasonably straightforward, but French labour laws are very complex, much more so than in most other EU countries:

  • Employment contracts for a fixed term are only permissible in a limited number of situations.
  • Certain collective agreements negotiated at national level are automatically applicable to certain commercial and industrial sectors.
  • In other sectors, such agreements are only applicable when agreed to by the employer.
  • Collective agreements cover all workers, whether or not unionised.

  It is essential to take legal advice before offering or entering into any kind of employment contract. We have a carefully selected team of legal and recruitment specialists based in France to help with your French incorporation. For more details, please contact us.

• What is the regulatory environment like?

  France has a well-developed legal and regulatory system broadly similar to that in other EU member states. There are few restrictions on setting up companies, except in certain areas such as banking and insurance, and there is no restriction on imports or capital from abroad.

  However state ownership is still a significant feature of the local economy, particularly in infrastructure industries and some restrictions still apply. Furthermore, the legal system is slow and expensive, which underlines the importance of securing good legal advice from the outset.

  Our team of local legal specialists can offer help with any French incorporation, so please contact us for more details.

• Are there financial incentives available – and what about banking facilities?

  A world-class international banking network exists, and there is a wide range of financial institutions with expertise in arranging financial transactions and transfers. The first step to set up business in France should be to establish a local bank account – we can arrange this for you.

  In addition to commercial bank loans, various types of assistance to new businesses may be available. These grants and loans from local authorities help with finding sites, shared cost access to support services, tax incentives and grants for innovative new companies.

• How easy is it to close a French company?

  Please click here for further details and services on closing a company.