Company Registration in France- An Overview
France is the second largest consumer market in the European Union. Apart from this, there are different industries such as cosmetics and dairy sectors in the country that contributes to the development of the economy. When it comes to foreign direct investment opportunities, the country receives significant proportion and is ranked fourth in the EU.
All the laws which apply to companies in France is the same for local companies as well as foreign based companies. Hence setting up a company in France is quite straightforward when compared to other jurisdictions in the EU. In the EU, France is the only country that prefers public sector investment rather than starting a business. Hence it is the preferred destination for investors and entrepreneurs for starting a business.
The French government offers different forms of benefits and incentives for the company thrive. When it comes to intellectual property protection, the country is a signatory to conventions such as the TRIPS Agreement which provides significant protection for foreign intellectual property rights.
Qualified workforce carries out work in France which directly reduces the cost of production of different types of products. Apart from this, the country offers proper infrastructural facilities in terms of energy, highways, railway projects, ports and other projects.
All these attractive incentives make France one of the friendliest places for starting a business. Due to this investors should go for the process of company registration in France.
Benefits of Company Registration in France
The following benefits are provided to an investor for company formation in France:
- One of the Largest Economies in the EU
France has the second largest consumer market in the EU. The tourism industry is booming with more than 82 million visitors annually.
- Intellectual Property Protection
France is a signatory to conventions such as the TRIPS Agreement which provides significant protection for foreign intellectual property rights. All companies in France have a unified patent registration method which provides more protection to patents in France. This would provide international patent protection.
- Low Interest Loans for Public Sector
Public sector banks in France offer low interest loans. This low interest loan would amount to €1 million for finance innovation and research & development activities. For unlisted resident companies equity investment opportunities are allowed. Credit insurance at low cost is offered to all domestic companies in France.
- Tax Incentives Offered by the Government
There are many tax incentives and allied schemes offered by the French Government. Interest rates which are offered for loans to global entrepreneurs at 2%. There are certain priority areas in France. If businesses invest in these areas then they would receive exemption from payment of corporate tax for a period of 7 years. Apart from this, there are other social security exemptions provided by the government.
- Good Infrastructure
The country offers proper infrastructural facilities in terms of energy, highways, railway projects, ports and other projects.
Eligible Business Structures under Company Registration in France
An applicant going for the process of company registration in France would have to choose a relevant business structure. The following are the business structures present in France:
- French LLC (Limited Liability Corporation)
This form of entity is also known as SARL. This type of business is utilised by different forms of entrepreneurs to set up small type of businesses. For forming this type of company there has to be one director, one shareholder and the minimum capital required is €1.
- Simplified Joint Stock Company (SAS)
This Company is similar to the French LLC. For forming this type of company there has to be one director, one shareholder and the minimum capital required is €1.Companies can be appointed as directors for managing this form of company.
- French Public Limited Company (SA)
Like a public limited company a French public limited company would require minimum capital for formation. The amount which is required for forming a French Public Limited Company is €37,000. There has to be minimum of seven shareholders and three directors for forming this type of company. However, this company has to comply with the requirements of capital. An auditor must be appointed to manage the audits.
- European Stock Corporation
A combination of two or more EU companies can form the European Stock Corporation. However, the minimum capital which is required for forming this form of company is € 120,000.
- Branch Office
Branch office is a company that is formed by a foreign company. Majority of control of the branch office is by foreign shareholders. All the debts of the branch office have to be Bourne by the parent company.
- Representative Office
A representative office is an office which is not allowed to carry out any operations related to sales. However, this office can be controlled by foreign shareholders.
Eligibility Criteria for Company Registration in France
The following eligibility criterion has to be sufficed for company registration in France:
- Objects Clause
The objects clause in the memorandum of association must state that objects for which the company is formed for.
- Information on Key Executives
When making an application for Company registration in France, all key information related to the executives must be provided. Such information would include information on the name of the shareholders, registered address of the shareholders and other information. Apart from this, other information must be provided related to the shareholders. This would include information to visa.
- Information on Directors
Information on the directors of the company must be provided.
- Minimum Capital
An applicant for company registration in France also has to suffice the minimum capital requirement for company formation in France. If the applicant forms a French LLC or a Simplified Joint Stock Company then the minimum capital which is required for formation is €1. However, if the company is a French Public Limited Company then the minimum capital required is €37,000. One fifth of the authorised capital has to be paid at the time of registration.
Procedure for Company Registration in France
An applicant going for the process of company registration in France has to follow the below prescribed method:
- Select an Appropriate Structure
First and foremost, the applicant for company registration in France has to choose an appropriate structure. This would depend on the business requirements of the applicant. If the applicant wants to start an entrepreneurship business then it would be suitable to go for the French LLC.
- Check the Name on Website (French Patent and Trademark Office)
In the next step, the applicant would have to check for a unique name. The name of the company must not conflict with any other names which are taken by French Companies. The name check can be carried out in the Institute National de la Propriete Industrielle website (https://www.inpi.fr/fr ). This is the French Patent and Trademark office.
- Open Corporate Bank Account
In the next step, the applicant would have to open a corporate bank account. There are different types of banks such as BNP Paribas, HSBC and Societe Generale which provides banking services to business. For selecting a suitable bank, it would be recommended to have a comparison on the services offered by all banks
- Register at Centre de Formalites des Enterprises
After opening a corporate bank account, the applicant would have to register at the Centre de Formalites des Enterprises for company registration in France. All other compliances related to business and tax would also be carried out through this institution.
- Publish Legal Notice of Incorporation on JAL Announces legales
In the next step, the applicant would have to publish a legal notice of the incorporation in the local gazette JAL Announces legales.
- Receiving the Identification Number
Once the Centre de Formalites des Enterprises receives the documentation then such information would be provided to the Register Nationale des Enterprise. After this the company would receive the SIRENE (Systeme Informatique pour le Repertoire des Enterprises), SIRET and NAF (Nomenclature des Activities Francaises) number.
Corporate Tax in France
All companies that are registered in France have to pay corporate tax. The following taxes would be applicable:
- Corporate Tax payable in France is 33%. This would be applicable for all businesses which are established in France. Hence an applicant wanting to go for company registration in France would have to pay this percentage of corporate tax.
- There is 20% VAT levied in France. VAT is an indirect tax which is charged on all businesses in France.
- Withholding Tax is charged on all dividends in France. 30% withholding tax is charged on all businesses that distribute dividends.
- Companies have to file corporate tax return by 30th April.
- Companies that invest in priority sectors are exempted from corporate tax payment. This exemption would be applicable for seven years.
Documents for Company Registration in France
The following documents are required for company formation in France:
- Information on the Founders of the Company- This will include information on the address, visa, passports and any other relevant information.
- Charter of the SARL
- Appointment of Manager Document
- Application Form for Registration and Fees
- Statement that the manager does not have any criminal convictions
- Memorandum of Association and Articles of Association
- Board Resolution( If required)