France company registration

France company incorporation is an excellent way for international businesses to trade within the European Union (EU). Healy Consultants offers a range of corporate services to assist Clients with France business setup.

Advantages of France company registration

  1. France business setup allows global entrepreneurs access to one of the world’s most important economies. France is politically and economically stable, which is a great benefit for entrepreneurs interested in setting up a business in France. According to 2012 Corruption Perceptions Index by Transparency International, France was ranked positively as the world’s 22nd least corrupt country. France has also been ranked 23rd in terms of competitiveness, by the World Economic Forum in its Global Competitiveness Report 2013 – 2014;
  2. A minimum of one director and one shareholder are required for a limited liability company (SARL). One of the directors must be resident of France or of the European Union. Corporate shareholders are permitted. Another single shareholder company option is a EURL (Sole Trader);
  3. The minimum capital requirement for a limited liability company (SARL) is €1 (US$1.33);
  4. Incentives for France company incorporation include the various array of government support for French companies in particular for research and development and innovative projects, staff training programs, as well as projects for the protection of the environment;
  5. The Finance Act 2010 abolished the business tax (taxe professionnelle) for all firms from 1st January 2010. The reform has the main objective of making the corporate tax system simpler;
  6. France has a wide network of double tax agreements with other countries, including China, India, Singapore, the UK, and the US;
  7. It is easy to open global corporate bank accounts to support a company in France. Healy Consultants works with internationally recognised banks such as HSBC, Standard Chartered and Citibank to provide corporate bank account services;
  8. New companies registered in France can take advantage of income tax incentives from France or the EU (investment in a new or existing production facility, revitalization of a production area, local development, R&D and in the agro-industy);
  9. France is accessible by land and sea, therefore businesses can utilize the most cost effective mode of transportation, thus an ideal location for investors as it has easy to access Europe, the Americas and Africa;
  10. France boasts a technologically advanced air, land and sea transport network, allowing quick delivery of goods and raw materials within the country;
  11. A foreign owned company can invest in every business sector without restriction (restrictions with nuclear & national security industry);
  12. France boasts 100 Urban free zones offering companies cheaper incorporation costs;
  13. In 2012, 86% of the population is computer literate, thus more productive employees;
  14. France is an excellent location to register intellectual property (IP), including global trademarks and patents. France is a signatory to international conventions including the World Trade Organisation’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which helps protect against IP rights infringements;
  15. Due to France vast amount of historical and natural attractions, the France tourism industry is strong. Therefore, there is lots of growth potential which foreign investors can tap into.
Close

Disadvantages of France company registration

  1. A minimum capital of €37,000 (approximately US$52,300) is required for the formation of a SA (société anonyme). At least 50% must be paid-up prior to registering the company and must remain so for a minimum of 5 years. The minimum capital requirement for SARL is just €1;
  2. A register of directors and shareholders is available for viewing on a public register;
  3. Only 25% of the French population speaks English fluently, consequently language is a barrier when conducting business;
  4. Whilst French labour law is more flexible in recent years, it is important to be aware of complex French employment terms and conditions;
  5. All companies in France are liable to pay a corporation tax of 33.33%. There is a reduced rate of 15% for SME companies applicable to benefits from €0 to €38,120. Above €38,121 the normal rate applies;
  6. A French company is also required to register for value added tax (VAT), for which the standard rate is currently 20%;
  7. France business setup is a relatively time consuming process. According to the World Bank’s Doing Business 2012 Survey, France is the world’s 34th easiest place to do business. Accounting and labour laws in particular can be complex;
  8. France ranks poorly as the world’s 62nd freest economy, and scores at 50% in terms of investment freedom and capital flows according to the 2013 Index of Economic Freedom by The Heritage Foundation.
Close

Accounting and tax considerations

France tax planning services

  1. Corporate income tax in France is set at 33.3%. Social surcharge of 3.3% is payable by companies with more than €763,000 tax liabilities;
  2. Resident and non-resident companies are taxable on domestic and French-allocable income, while foreign sourced income is tax exempt;
  3. Standard VAT (Value Added Tax) rate is flat 20%. However, most food products and medicines have preferential rates between 2.1% and 10%.
  4. Participation exemption of up to 95% on corporate tax is available for dividends and capital gains after parent-subsidiary sale of shares;
  5. Tax losses in France can be carried forward indefinitely. Consequently, they may be offset against up to €1 million of the annual taxable profit;
  6. Withholding tax on dividend payments to non-resident companies is flat 30%. Furthermore, royalties payments suffer 33.3% withholding tax unless both reduced by a double taxation treaty (DTA);
  7. Interest payments to foreign companies are fully tax-exempt;
  8. Annual tax returns in France are due up to four months after the end of each individual tax year;
  9. Late payment of taxes due, results in a 10% penalty;
  10. Social security contributions of up to 50% of gross salaries are due by the employer;
  11. Personal taxation is progressive in nature and ranges between 5% and 45%. Social surcharges of up to 15.5% are due by French residents;
  12. Resident households and non-resident property owners with more than EUR 1,3 million net worth pay net wealth tax, ranging between 0,5% and 1,5%;
  13. France boasts a large network of 120 DTAs with countries including UK, Canada, Singapore and Brazil.

Compliance considerations

  1. According to the Companies code, a French company must have at least one director and one shareholder of any nationality. One of the director must be resident of France or of the European Union;
  2. The Memorandum of Association (statuts) is a contract between the shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method;
  3. French companies are must lodge annual return and tax return. An annual audit is required for all large companies;
  4. A private French company is required to maintain a local registered address;
  5. Each time a change occurs in the Memorandum of Association (statuts) of the company or to its officers, the change must be lodged with the French companies registry;
  6. Company information such as capital structure, directorship and shareholder details are publicly available;
  7. The french Government penalize all funds transfers coming or going to black listed countries : BVI, Brunei, Montserrat, Bostwana, Guatemala, Nauru, Marshall Islands and Niue;
  8. The French Government proposes to boost the economy by adopting long term mesures i) modernisation of the tax system, ii) lighting of the tax burden, iii) simplification of the payroll system and reduction of payroll costs. These mesures create hope for french and international entrepreneurs but will have positive consequences only by 2015 – 2017;
  9. The process of deregistering a company is dictated by the Government. This process will take a minimum of 6 months. Healy Consultants fee to project manage company de-registration is US$1450. During this 6 months period it is mandatory to maintain a resident company secretary and a legal registered office.

Recruitment in France

    France recruitment

  • Recruitment of foreign labour requires the employer to justify the hiring of the foreign worker in place of European Union national. The foreign employee is expected to have professional and educational qualifications relevant to the position.
Close

Did you know about France?

  1. France has the world’s 5th largest economy by nominal figures and the 9th largest economy by PPP figures;
  2. France has the highest wealth tax of any European country;
  3. Nearly 20% of the territory of France lies outside Europe. These regions are known as “DOM-TOM” (overseas departments and territories), where over 2.5 million French citizens live;
  4. French people cheek kiss to great each others between family and friends, even between men. The number of kisses varies according to region, from 1 to 4, and occasionally up to 5 in Corsica;
  5. There is a Victor Hugo street in every town in France;
  6. In 2004, the French produced 56.6. million hectoliters of wine and over 400 types of cheese;
  7. French is the official language of many countries including: Switzerland, Canada, Ivory Coast, Luxembourg, Monaco, Congo and Niger;
  8. Mont-Blanc is the highest peak in Europe;
  9. Famous French inventions include: the hot air balloon, the submarine, and the parachute.
Close

Useful links

External readings

External videos

Contact us

For additional information on France company formation, you can email us at email@healyconsultants.com or phone us at (+65) 6735 0120. Address: 18 Rue Gambetta, 95880 Enghien les Bains, France.