Company Incorporation Procedure in France

Narendra Kumar

26 Feb, 2025

Company Incorporation Procedure Being the 5th largest economy in the world, France has been slower than many of its EU counterparts to embrace a truly liberal business culture. At the same time, it has aggressively sought to attract Foreign Direct Investment Checklist- and with considerable success. So, the result is that it is now very simple and straightforward to set up business in France, although local advice is essential in order to ensure compliance with legal and financial regulations.

It is the second largest market in the European Union after Germany.

What is the best way to Register a Company in France?

There is no fixed pattern for company registration in France. Options range from opening a small representative office – a bureau de liaison – through to acquiring an existing company or setting up a new business from scratch. A SARL (Limited Company) or SAS (Simplified Joint Stock Company) are the most popular for overseas clients.

France has a well-developed legal and regulatory system broadly similar to that in other EU member states. There are a 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 trait of the French economy, particularly in infrastructure industries and some restrictions still apply to the same.

Types of Entities:

Main kinds of French Company Incorporation –

• Business Corporation – Society Anonyme (SA): This type of Company must have a minimum of 7 shareholders who are liable up till the capital employed. The minimum Capital contribution is 37000 Euros.
• Limited Company – SARL: Minimum No. of shareholders required for SARL in France are 1 & capital requirement is also as low as 1 Euro. & shareholders liability is limited to the capital contributed by them.
• Simplified Stock Corporation – SAS: It is a new type of entity in France introduced lately. It is very much popular for the foreign or overseas It is a medium to create a joint venture between France Company & foreign corporate players. It affects various Strategic Alliances. French Corporate Law approves of such an entity in order to incentivize global syndication.
  • The company must have at least one shareholder & director.
  • The minimum share capital is 1 euro; generally, banks prefer the company to have at least 4000 Euros.
  • No requirement of Board of Directors.
• SCI – SocieteCivileImmobiliere: It is a Private Limited Company whose shareholders can be non-residents as well. It also does possess a registered office in the region because of market presence.

*France has Developed lately its world-class International Banking System.

         Incorporation Procedure:

• An apt company name must be searched & henceforth checked on the Institute National de la Propriety Industrially (INPI) website.

Once it is approved, one should proceed with rest of the procedure.

• Registration to be done at Centre de Formalities des Enterprises (CFE) in France for obtaining all sorts of licenses to continue.
• Application for registration of the company should be accompanied by the following documents
  • Request Letter for registration
  • Articles of Association
  • Bank Certificate stating Capital Deposit
  • Proof of name approval
  • Structure of the entity along with the Business Plan
  • Proof of registered address of the company
  • KYC of the Directors & shareholders.
• Once the document submission is successful, Certificate is generated & name of the Company is entered in registrational des Enterprise.
• The newly formed company will receive the
  • SIRENE (SystémeInformatique pour le Repertoire des Enterprises),
  • SIRET (SystémeInformatique pour le Repertoire des Establishments)
  • NAF (Nomenclature des Activities Franchises) numbers.
• Last but not the least purchase of the special accounting book from commercial court along with the opening of Bank Account.

Taxes

• Standard Corporate Tax rate is 33%
• SME’S are benefited with a reduced rate of 15% for companies meeting certain criteria.
• The VAT rate is 20%
• Dividend & Capital Gains between parent & subsidiary companies are eligible for a 95% rebate on the corporate tax rate.
• A 30% withholding tax is applied to dividend payments to non-resident companies.
• Interest payments to foreign companies will be 100% withholding tax exempt.
• A French branch of a non-EU based foreign company is subject to a 30% branch
• Annual losses can be carried forward indefinitely, for an amount of up to 1 million Euros plus 50% of subsequent profits exceeding the amount.
• Annual Audit is mandatory for companies.

France has signed double taxation treaties with around 123 countries, so it an international market hub. Also, France legal system is a party to the New York Convention.