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Overall, France is a favourable country in which to start a business, though the bureaucracy during set-up can be formidable. If you are an expat wanting to start your own business in France, the first step is to ensure you have the legal right to live and work in the country. Citizens from the European Economic Area (the EU plus Iceland, Liechtenstein and Norway) and Switzerland are freely permitted to live and work in France, and they have the same legal rights to own a business in France as French citizens. If, however, you are a non-EU citizen, you will need to obtain a residence permit (carte de séjour) before you can operate a business in France.
Competition is fierce in the French market, so it is vital to have a good business plan before starting your own business. When writing your business plan, make sure to research which businesses already exist in your field and determine your potential customers, partners and competition. Your business plan should set out your business objectives, target market, commercial strategies, potential obstacles and financing projections. For further advice and information on business plans in France, see the French Entrée site (advice is from a UK point of view.)
Setup and Registration
Before you start the setup process, you may well need to obtain advice from a lawyer and/or accountant as to the ins and outs of French business law and taxation. All businesses based in France need to register at the Centre des formalités des entreprises (CFE.) This is divided into several departments, depending on the nature of your business, the legal structure you require and your region, so it may take a while to find out which one you need. You will also need to ascertain whether your business activity is a regulated one or not. If it is, you will need to obtain liability insurance and the correct licences.
The form you will need to complete is M0. Once you have sent all the necessary documents and paid your registration fee (from €215 to €350), you will receive a business reference number (SIREN), VAT number and other registration details. Then, after a further ten-day wait, you can officially open for business. For more information on setting up a business in France, see the CFE website (French only.)
Another important step is to decide which of the 13 statuts (legal structures) is best suited for your business. The legal structure will determine the nature of your legal, financial and tax obligations. The two most common business structures in France are sole trader (Entreprise Individuelle) and the two forms of limited liability company, EURL and SARL.
Self-Employed (Entreprise Individuelle)
The advantage of setting up your business as a self-employed person in a (standard) Entreprise Individuelle is that you have full ownership and control over the business, and that all after-tax profits are yours. On the other hand, you are personally liable for all the losses your business makes, and have additional responsibilities, such as keeping business records.
A slight variant on this structure is the Entreprise Individuelle à Responsabilité Limitée (EIRL). The difference between this and the standard Entreprise Individuelle is that your liability to repay any debts you may incur is limited. To set up an EIRL, you will need to the services of a notary if you have any property assets worth over €30,000. Furthermore, you will need to submit annual accounts and keep a close record of all your personal assets.
With either of the above business structures, you can choose to be classed as an auto-entrepreneur (site in French only) for tax purposes. This greatly simplifies the process of setting up a company, and, as it is a pay-as-you-earn scheme, lightens the tax burden throughout the year. To be eligible for the scheme, your annual income must not exceed €32,900 for businesses providing services or €82,200 for those selling goods. Tax deductions are also applicable.
EURL and SARL
If your company has income levels over the above thresholds, you will need to register it as either a EURL or a SARL. The Entreprise unipersonnelle à responsabilité limitée, or EURL,is a French company with limited liability owned by one person. This person is the sole shareholder in the company.
The Société à responsabilité limitée or SARL, is a similar organisational structure but for two to a hundred people.In these, the two simplest and most common company structures, shareholders are not personally responsible for company debt. The leader of one of these companies is a gérant (managing director.)
Other legal structures in France include the limited liability corporations, which are the société anonyme, société par actions simplifiée and société à responsabilité limitée.
If you want to employ someone – including yourself – to work in your business you will have to register as employer at the local tax office. Online registration is possible, though in some cases expat business owners must register by telephone or in person.
As an employer, you will have to ensure that your business complies with French labour regulations. You should familiarise yourself with different types of contracts, minimum wage requirements, equal opportunity policies, work permits, insurance payments and recruitment options. Due to French labour regulations, you will have to pay high social security contributions for you employees. Note however, that shareholders and the spouse of a managing director are not considered employees for this purpose.
Sections in EMPLOYMENT AND BUSINESS IN FRANCE:
» Finding a Job, CVs, Interviews and Etiquette for Expats in France
» Work Culture and Labour Market for Expats in France
» Expats Owning and Operating a Business in France
» Business Groups, Associations and Networking for Expats in France
» Business Taxation for Expats in France
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If you are considering moving to France or are soon to depart, you can find helpful information and advice in the Expat Briefing dedicated French section including; details of immigration and visas, French forums, French event listings and service providers in France.
From your safety to shopping, living in France can yield great benefits as well as occasional drawbacks. Find your feet and stay abreast of the latest developments affecting expats in France with relevant news and up-to-date information.
Working in France can be rewarding as well as stressful, if you don't plan ahead and fulfill any legal requirements. Find out about visas and passports, owning and operating a company in France, and general French culture of the labour market.
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