In this guide we consider the different business structures, company incorporation and the formalities of business registration.
The guide also includes information on French incorporating fees and also help you to foresee the expenses during the life of the company.
THE PATH TO CREATE A COMPANY
There are a lot of different types of companies in France. The way the company is incorporated in France is completely different compared to the other countries such as the UK and the process can come a chock to some people. In the UK, a company can be incorporated in around 3h where as in France it can take from one week to a month. The cost of incorporation is much higher as well.
If this is the first time you are dealing with this process, choosing an adviser such as a chartered accountant may be a good idea since they will be willing to guide you.
You can start your business in France if you are not a resident. You do not have to complete any formalities specific to your status as a foreigner. You will therefore simply have to go through the usual process. Be careful, however, managing your company from a foreign country could be difficult in practice.
SETTING UP YOUR BUSINESS: THE FORMALITIES
The choice of the legal structure depends on the activity, the tax status, future needs and developments, and its functioning. In addition, you must first check the name selected for your company is not already used (on https://www.infogreffe.fr), or that it is not already registered as a trademark with the INPI. Establish the administrative address in France, if the activity is domiciled in your dwelling: check the conditions of the lease/co-ownership + inform the owner/ syndic.
Before signing the company articles: attach a statement (a list) of the acts performed on behalf of the company to be incorporated (to reimburse the partners who have advanced the funds).
The minimum capital of the company would depend on its form. If the activity is regulated, contact the local CFE (Centre des formalités des entreprises) and the Guichet des entreprises website for more information, other steps may be required in the incorporation process.
SETTING UP YOUR BUSINESS: DIFFERENT STEPS
DRAFTING OF « STATUTS »
A bank account must be opened BEFORE the company is fully incorporated. Usually, the bank would require to see the director due to the anti-money laundering rules. However, it would be possible to open the account without the director to go to the bank but this will slightly delay the company incorporation process.
The capital of the company needs to be paid by bank transfer.
The opening of the bank account can be tedious if you are not a French resident.
SETTING UP YOUR BUSINESS EXPENSES DURING THE LIFE OF THE COMPANY
Depending on the status of the officer, the company may be subject to payroll taxes. This is systematic if an officer is paid, but even if no remuneration is provided, there may be lump sum charges.
If your company employs people, the salary that you will pay them will obviously be subject to social charges (the same goes for the remuneration paid to the minority manager of SARL or EURL or chairman of SA or SAS).
For companies (SA, SAS, SARL), the results of the company will be taxed on corporate tax. From 01/01/20, its rate has been 15% of the profit between €0 and €38,120 and 28% over €38,120.
Exercising an economic activity is not without risks, so it is very important to take out an insurance to protect the company. You would probably need to get a public liability insurance (“attestation de déductibilité loi Madelin/prévoyance”). But you will also have to think about the opportunity to subscribe to supplementary insurance: legal protection, damage insurance, voluntary unemployment insurance schemes, etc for a cost <€1,000/year. We would recommend you to approach a broker who can help you.
Any act affecting the life of your company must also be subject of formalities (change of name, increase of capital, change of address, change of corporate purpose, etc.). Your accountant can help you or you can do it yourself.
In addition to all the charges listed above, you will of course have to include all expenses related to the exercise of your activity, including: the purchase of equipment and materials; rent, bank charges and financial charges, electricity, phone; postage costs; etc.
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