Accounting firm in France
May 25, 2023
French accountant in Birmingham
July 17, 2023
France, rich in its cultural heritage and economic dynamism, is fertile ground for launching and developing a business. Whether you are a French entrepreneur looking to start a business or a foreign investor keen to explore the opportunities offered by the French market, setting up a company in France is an exciting but also complex step. This guide, written by Euro-Accounting, your trusted multi-awards accounting partner, will help you navigate through the process of setting up a business in France. From selecting the appropriate legal structure to understanding post-incorporation obligations to the registration process, this detailed article is designed to provide you with all the essential information to make your business project in France a success.
Why create a company in France?
The favorable economic context
France benefits from a solid and diversified economy which makes it an attractive place for entrepreneurs. With its large consumer market, world-class infrastructure and highly skilled workforce, France offers a favorable environment to start and grow a business.
Moreover, France has demonstrated a strong commitment to innovation and entrepreneurship. It has put in place various support measures for businesses, including tax incentives and financing programs, which make it much easier to start a business.
France’s strategic geographical position at the heart of Europe also allows it easy access to other European markets, thus offering companies significant potential for expansion.
By choosing to incorporate your company in France, you are positioning yourself in a dynamic economic environment that promotes business success. At Euro-Accounting, we’re here to help you navigate this landscape and make the most of the opportunities it offers.
Tax benefits
France offers a number of tax incentives to encourage business creation and development. Among these benefits, we can mention the research tax credit (CIR), which encourages companies to invest in R&D, and the status of Young Innovative Company (JEI) which offers tax relief to companies less than eight years old, in research and development activities.
In addition, the French tax system allows some flexibility in the management of profits, allowing companies to better manage their tax burden. Finally, France has set up a number of specific economic activity zones, such as Zones Franches Urbaines (ZFU), which offer tax and social benefits to encourage economic development in certain regions.
At Euro-Accounting, our accounting and tax experts can help you understand and maximize these tax benefits to maximize your business potential.
Market opportunities
With a population of over 67 million and strong purchasing power, the French market offers considerable growth potential for businesses. Whether you operate in consumer goods, technology, services or manufacturing, you will find a large audience for your products and services.
Additionally, France is a hub for international trade, with easy access to the entire European Union market and beyond. Whether you are looking to import or export, the opportunities for international trade are vast.
Finally, France is recognized for its strong support for innovation and entrepreneurship, with many opportunities for companies in sectors such as technology, health, green energy and more.
The benefits of geographic location
France’s strategic geographic position makes it an ideal location for setting up a business. Located at the crossroads of Europe, it offers easy access to several major markets. Whether it is Germany, the United Kingdom, Spain, Italy or the Nordic countries, all are easily accessible thanks to a highly developed transport network including roads, railways and international airports.
In addition, France benefits from access to seaports, which facilitates trade with international markets. Whether you plan to export your products or import raw materials for your production, France’s transport infrastructure is well-equipped to facilitate your operations.
In addition, the diversity of French regions offers a variety of economic landscapes. Whether you want to settle in a dynamic metropolis like Paris, in an industrial region like the North, in a technological region like French Tech in Toulouse or in a tourist region like the Côte d’Azur, there is a place for your company in France.
Choose the legal form of your company
SARL and EURL
The Limited Liability Company (SARL) and the Limited Liability Single-Person Enterprise (EURL) are two popular business forms in France. They are often chosen by small and medium-sized businesses, as well as family businesses.
The SARL, as a legal person, requires the drafting of articles of association. It is suitable for projects involving between 2 and 100 partners. In addition, the SARL can also be single-member – in this case, it takes the form of an EURL. There is no minimum share capital required for these structures and all types of contributions are permitted.
The operation of the SARL is governed by the Commercial Code, which provides some security to the partners. From a tax point of view, the profits made by a SARL are generally subject to corporation tax (IS). However, it is possible to temporarily opt for the regime of partnerships, where taxation is direct in the name of the partners.
SARLs formed between members of the same family can opt for this system without a time limit. Concerning the EURL, the profits are subject to income tax (IR), but an option is possible. If the sole shareholder of the EURL is a legal entity, the taxation is done at IS.
Since the Sapin law of December 2016, EURLs whose sole partner (natural person) is the manager can benefit from the micro-enterprise regime. With regard to the social status of the leaders, if the management of the SARL is the majority, the leader(s) are considered non-salaried workers.
If the management is egalitarian, minority or non-associated, the manager(s) are assimilated into employees. If the sole partner of a EURL is also a manager, he is a self-employed worker.
If the sole shareholder of a EURL is not a manager, he is assimilated to the status of an employee. It is important to note that the majority manager of SARL and the sole managing partner of EURL are liable for social charges on part of their dividends. This information must be taken into account during the tax and social optimization of your company.
Sole proprietorship with limited liability (EIRL)
The Individual Company with Limited Liability (EIRL) is a relatively recent form of company in France which combines the advantages of the sole proprietorship and the EURL.
This legal form incorporates the characteristics of the sole proprietorship while offering a major advantage: the possibility of limiting the liability of the entrepreneur. To do this, the entrepreneur must complete a statement of asset allocation. This patrimony of assignment represents the part of the entrepreneur’s patrimony dedicated to the exercise of his professional activity, including all the rights and goods necessary for the company.
From a tax point of view, the EIRL is normally subject to income tax (IR), but it is possible to opt for corporation tax (IS) on request. Note that, unlike the sole proprietorship, the EIRL must open a professional bank account.
In terms of social status, the head of an EIRL is considered a non-salaried worker. It is therefore important to consider these factors when choosing the legal form of your business.
The SAS and the SASU
The Simplified Joint Stock Company (SAS) and its single-member variant, the SASU, are among the most common forms of business in France, alongside the SARL.
At least two partners are required to create an SAS, but it can also be single-member, in which case it becomes a SASU. This status is frequently used for projects considering dividend distributions or the entry of investors. No minimum share capital is required and all types of contributions are permitted. Like the SARL, the SAS is a legal person, implying the need to write articles of association.
One of the main advantages of SAS is its flexibility. Its operation is poorly regulated by the Commercial Code, which offers great freedom to define its own rules, whether for the appointment of managers or the terms of collective decisions. However, the appointment of a chairman is mandatory. In addition, unlike the public limited company, the SAS offers freedom in terms of term of office and the responsibility of each actor is linked to his contribution to the company.
However, the creation of an SAS can have drawbacks due to its lack of legal framework. It is thus often recommended to have recourse to a lawyer for the drafting of the statutes, which represents an additional expense.
From a tax point of view, the profits of an SAS or SASU are subject to corporation tax (IS), although a temporary option for the partnership regime is possible. There are no social charges on dividends received by shareholders, but the latter are taxed in the category of Industrial and Commercial Profits (BIC).
In terms of social status, SAS managers are considered employees. It is therefore important to take these elements into account when choosing the legal form of your company.
SA (limited company)
The Société Anonyme (SA) is a status intended for large-scale projects. To create an SA, it is necessary to bring together at least 2 shareholders (7 for an SA listed on the stock exchange) and provide for a starting capital of at least 37,000 euros. The share of capital provided by a shareholder determines his degree of responsibility within the company. Note that it is not possible to make contributions in industry under this status.
As for the legal forms mentioned above, the SA is a legal person, requiring the drafting of statutes. It offers the possibility of putting the company on the stock exchange, adding an additional option for the financing of the activity.
The organizational structure of the SA is more complex and rigid than that of other forms of business. It requires the appointment of several governing bodies, including a president, a general manager, a board of directors, etc. In addition, in certain situations, the SA must appoint an auditor. For example, when the SA is a parent company in a “small group” which exceeds two of the following three thresholds: 8 million euros in turnover excluding tax, 4 million euros in total balance sheet, 50 employees. The same obligation arises if the SA is a significant subsidiary in a “small group” which also exceeds two of the three thresholds mentioned.
From a tax point of view, the profits of an SA are subject to corporation tax (IS), but a temporary option for the regime of partnerships is possible. No social charges are levied on the dividends, but these are taxed in the category of movable income.
Individual business
The Sole Proprietorship is a structure that is easy to access and simple to manage. The formalities for its creation are minimal and the entrepreneur is the only decision maker.
Unlike companies, it is not obliged to make the state of its finances public by disclosing its accounts. In tax terms, the profit of the company represents the salary of the entrepreneur, which is taxed according to the nature of the activity:
- The BNC (Non-Commercial Profits) for non-commercial activities, such as the liberal professions.
- The BIC (Industrial and Commercial Profits) for commercial, artisanal or industrial activities.
- The BA (Agricultural Profits) for the profits resulting from the exploitation of rural goods.
However, the entrepreneur is liable in an unlimited way on his goods and debts. In the event of bankruptcy, his personal assets may be seized.
Thus, for risky activities, it is often preferable to create a company. However, the Sole Proprietorship today offers greater protection than before, allowing the entrepreneur to protect part of his personal assets.
The SNC (general partnership)
A business plan is an essential document for any entrepreneur wishing to launch his own business. It serves not only to clearly define the company’s objectives and strategies but also to attract investors and obtain financing. To write an effective business plan, here are some key elements to include:
- Executive summary: Brief presentation of your company and your objectives. The first part was read by investors.
- Company Description: More details about the company, its history, mission, values, and legal structure.
- Market analysis: Understanding of the sector, the target market, and the competition.
- Organization and management: Presentation of the team, their skills and organizational structure.
- Services or products: Detailed description of the products or services and their competitive advantage.
- Marketing strategy: How to attract and retain customers.
- Financial plan: Revenue, cost and profit forecasts, forecast balance sheet, cash flow plan.
- Funding request: Amount needed, use of funds and repayment plan.
- Appendix: Additional documents like market studies, patents, and letters of support.
A business plan should be clear, concise, and compelling. It is also recommended to review it regularly so that it always reflects the current state of your business.
Raise social capital
Gathering social capital is a key step in business creation. The capital represents all the contributions made by the partners. It can be money, material goods, real estate, patents or even skills and work. It is crucial to determine the amount needed to start the business, without being too optimistic or pessimistic.
Once the amount has been established, the partners choose the type of contribution they wish to make. They can contribute money, goods, or their skills. If partners make contributions in kind, these must be assessed. Sometimes, this assessment must even be certified by a contribution auditor, depending on the legal form of the company.
After collecting the contributions, the capital is deposited in the bank. The latter then issues a capital deposit certificate. This document certifies that the capital has been deposited and is necessary for the constitution of the company.
Finally, the amount of the share capital and the nature of the contributions are recorded in the company’s articles of association. This information is essential, because it demonstrates the seriousness and financial soundness of the company in the eyes of third parties, such as business partners, banks or investors.
The company incorporation process in France
Drafting the company’s articles of association
The drafting of the articles of association is a crucial step in the incorporation of a company. This document defines the legal structure of the company, the roles and responsibilities of the directors, and the internal functioning of the company.
In general, the articles of association must specify the name of the company, its legal form, its corporate purpose (i.e. the type of activity it will carry out), its registered office, the duration of the company, the share capital, the distribution of shares or shares, and the decision-making procedures.
The drafting of the articles of association must be carried out carefully, since they will serve as the basis for all the operations of the company. It is often recommended to hire an expert, such as a lawyer or an accountant, to ensure that the articles of association are correctly drafted and comply with the law.
Once drafted, the statutes must be signed by all partners or shareholders. They must then be filed with the registry of the commercial court when the company is created.
Don’t forget that the statutes can be modified later if the partners so decide, according to the terms defined in the statutes themselves. A modification of the articles of association must be declared to the registry of the commercial court.
Company registration
Company registration is a formal step that gives legal existence to your business. This step requires the filing of a certain number of documents with the competent Business Formalities Centre (CFE) or directly with the registry of the commercial court.
Here are the documents generally required for company registration:
- The statutes of the company, are signed by all the partners.
- A copy of the certificate of deposit of the funds constituting the share capital.
- A proof of the registered office of the company.
- The M0 form is duly completed and signed.
- A copy of the legal notice of incorporation of the company.
- A declaration of non-conviction for each leader.
- A copy of the ID for each officer.
After receiving the documents, the registry of the commercial court registers the company and issues a Kbis extract, which is the “identity card” of the company. This Kbis extract contains the essential information about the company: its name, its legal form, its registered office, its share capital, its corporate purpose, the duration of the company, information on the directors, etc.
Note that company registration is chargeable. Fees vary depending on the legal form of the business. It is also possible to call on a professional, such as a lawyer or an accountant, to help you with this process.
Publication in a newspaper of legal announcements
The publication of a notice of incorporation in a Journal d’Annonces Légales (JAL) is an essential step in the creation of a company in France. This notice must contain certain mandatory information about the company: the corporate name, the legal form, the share capital, the address of the registered office, the corporate purpose, the duration of the company, as well as the surnames, first names and addresses. leaders.
Once the publication has been made, the JAL provides a certificate of publication, a document necessary for the registration of the company at the registry of the commercial court. The cost of this publication varies depending on the JAL and the length of the advertisement. It is possible to call on a professional, such as a lawyer or an accountant, to help you in drafting this legal announcement.
Manage your business accounts
Accounting management is an obligation for any business in France. This includes several essential tasks: monitoring financial transactions, preparing financial statements, paying taxes, and managing payroll. Well-kept accounts provide a clear view of the company’s financial health, thus facilitating strategic decision-making.
If you are not comfortable with these aspects, you can use the services of an accountant. This professional will take care of your company’s accounting, ensure its compliance with the legislation in force, and advise you on financial or tax matters. In addition, outsourcing accounting will allow you to fully concentrate on the development of your business.
Comply with tax obligations
In France, all companies have tax obligations to respect. They must declare and pay various taxes and duties, such as VAT, corporation tax (IS) or income tax (IR), depending on their legal status. It is important to respect these obligations to avoid penalties which can be severe.
Companies must also respect certain tax deadlines, for example for the declaration of results or the payment of VAT. Proper monitoring of these obligations is essential for the sustainability of the company.
In addition, it is possible to benefit from various credits and tax reductions depending on the activity of the company, its investments or its hiring policy. It is therefore advisable to keep informed of the existing tax systems to optimize the tax burden of the company.
Here again, the assistance of a chartered accountant can be invaluable in managing these aspects and ensuring compliance with all tax obligations.
Meet social obligations
Social obligations are a crucial aspect of running a business in France. These obligations mainly concern payroll taxes, employee social protection, and compliance with labor law.
Social charges include health insurance, unemployment insurance and pension contributions, among others. They are calculated on the basis of wages paid to employees and must be paid regularly.
The social protection of employees involves respecting the rules in terms of paid leave, working conditions, health and safety at work, and insurance.
Finally, labor law defines the rules concerning working hours, employment contracts, dismissals, etc. Businesses must make sure to follow these rules to avoid penalties, which can range from a fine to the closure of the business in the most serious cases.
Again, an accountant or legal advisor can be of great help in managing these obligations and ensuring business compliance.
Why use Euro-Accounting to set up your company in France?
Euro-Accounting’s expertise in business creation
Euro-Accounting has solid expertise in business creation in France. With a team of qualified accountants and legal advisers, we can help you navigate efficiently through all stages of the business creation process.
We have in-depth knowledge of company law and tax and social obligations in France. This means we can advise you on the best type of business structure for your project, help you prepare a solid business plan, and guide you through the business registration process.
In addition, Euro-Accounting can help you manage your company’s accounting once it is established. We can help you meet your tax and social security obligations, and can also provide business management advice to help you grow and thrive.
In short, using Euro-Accounting to set up your company in France means calling on a reliable partner who can help you every step of the way. Our expertise will allow you to focus on what you do best: growing your business.
Conclusion
Starting a business in France is a rewarding opportunity, offering a series of significant advantages, ranging from a solid economic context to easy access to a large market and attractive tax advantages. Each legal form has its specificities and can respond more appropriately to certain types of projects. It is therefore important to choose the legal form that best suits your business and your aspirations.
At Euro-Accounting, we are here to help you every step of the way. Our expertise in the field of business creation in France allows us to guide you through the legal and tax maze, and to help you make the best choices for your business.
If you are considering starting a business in France, do not hesitate to contact us. Whether you’re in the initial thinking stage or ready to get started, we’re here to support you and help you realize your vision. Take the first step towards your business success by contacting us today. We look forward to helping you realize your business dream in France.
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