Starting a Business in France

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Starting a Business in France

Any for-profit activity in France - regardless of the amount of revenue generated - requires a legal structure, with the business either:

• registered as an individual operator, or
• registered as a company/corporation

The most-seen legal structures are:

1. Self-employed/Sole trader: Entreprise Individuelle (EI)
2. Limited liability single shareholder corporation: Entreprise Unipersonelle à Responsibilité Limitée (EURL)
3. Limited liability joint stock corporations, including:
• Société à Responsibilité Limitée (SARL)
• Société Anonyme (SA)
• Société par Actions Simplifiée (SAS)

Starting a Business

• Registration with the CFE
• How to set up as Entreprise Individuelle (EI)  
• How to set up an EURL or a SARL
• Tax régimes - BIC, BNC and BA
  • The Micro-entreprise - Micro-BIC and Micro-BNC
• Regulated professions

Registration with the Centre de Formalités des Entreprises, CFE

The CFE is a single organisation that receives and processes business registration application forms and documents as well as details on changes to, or the closing of, businesses. There is a CFE office/counter in each local business organisation overseeing body.

Business organisation overseeing bodies

Registration of a new operation must be made at the appropriate CFE. Where to go depends on the nature of the business being started:

• Chambre de Commerce et d'Industrie (CCI):
  • Shopkeepers
  • Commercial companies (EURL, SARL, SA, SAS, SNC) with no "artisanal" component to the business
• Chambre de Métiers et de l'Artisan:
  • Tradespeople, artisans
  • Companies combining craft and commerce
• Chambre Nationale de la Batellerie Artisanale:
  • Sole traders and companies involved in inland water transportation
• Greffe du Tribunal de Commerce:
  • Non-trading companies and companies with a non-commercial purpose (SCI, SCM, SCP)
  • Industrial and publicly-owned commercial establishments (EPIC)
  • Companies of regulated professionals (SELARL, SELAFA, SELCA)
  • Commercial agents
• URSSAF:
  • Regulated and non-regulated professionals
  • Employers whose company is not registered with the commercial or trade authorities (the Registre du commerce et des Sociétés or with the Répertoire des Métiers).
• Service des Impôts des Entreprises:
  • Artists, writers
  • Other activities on the BIC tax régime not fitting the above (such as rental of furnished property)
• Chambre d'Agriculture:
  • Individuals and companies operating in agricultural activities

Find a CFE

• To find the relevant local CFE office see the annuaire CFE website: Click here and select the appropriate business activity; a new window will open, select the legal structure, then another window will open to allow a search for CFE office by geographic location

What the CFE does

The CFE distributes each element of a business registration application to the relevant organisation for processing:

1. INSEE, which registers the company with the Répertoire National des Entreprises (RNE) and allocates a SIREN number and a SIRET number and the APE number.
2. Tax services.
3. Social security services (URSSAF, Régime Social des Indépendants (RSI), professionals' pension scheme).
4. The Greffe du Tribunal de Commerce if it's a company being formed or if the activity is commercial. It is then registered with the Registre du Commerce et des Sociétés (RCS) and an "extrait K" (for sole traders) or "etrait Kbis" for companies is issued.
5. The Répertoire des Métiers if the activity is a trade or the person an artisan.
6. The Caisses Socials and Inspection du Travail if there are to be employees at the start of trade.

• In some areas the CFE provides all application services online: Click here

Numbers: SIRET, SIREN, NAF (APE), VAT

1) The SIREN number (made up of three groups of three digits) is the business reference number used by French administrative offices.

Examples of SIREN and related numbers:

• Commercial individuals and companies: RCS PARIS 123 456 789
  RCS is the company and trade register
  City name is place of registration
  123 456 789 is the Siren number
• Artisans and trades registered with the Chambre de Métiers et de l'Artisan: 123 456 789 RM 987
  123 456 789 is the Siren number
  RM is the register of the trades
  987 is the number identifying the chambre
• Professions registered with URSSAF: 123 456 789 is the SIREN

2) The SIRET number identifies the establishment: the same company can have several. This number is quoted in dealings with local social services, tax offices and ASSEDIC (state unemployment).

The SIRET is a 14 digit number consisting of the SIREN (the business identifier) and a five digit NIC code (the establishment identifier).

3) The NAF (formerly APE) code identifies the stated primary activity of the business at the time of registration. Since 2008 it is made up of four digits and a letter (in accordance with European systems).

4) The VAT number (numéro de TVA intracommunautaire) is issued to companies and individuals providing services or selling good and products. It is obligatory above a certain threshold of income, optional below that threshold. A French VAT number is made up of 13 characters: the two-character country code (FR), a two-digit data processing code and the SIREN number. The TVA number must be quoted on all invoices issued by a TVA-registered business.

• For more information from the APCE: Click here (in French)

Names and logos

The only way to protect a business name and/or logo in France is to register it as a trademark (dépôt de marque) with INPI. This requires making an application, completing a form and paying a fee. The concept of "prior use", common in many jurisdictions, does not exist in France - that a name or logo may have been in use prior to its registration (by the registrant or a third party) carries no legal weight.

• For more information from APCE: Click here (in French)

How to set up as Self-employed/Sole trader: Entreprise Individuelle (EI)

The Entreprise Individuelle (EI) structure can be used to operate as a self-employed person (with or without employees) in activities that include:

• the professions (profession liberale) for example an architect, a lawyer, a consultant, a medical practitioner
• commercial or industrial activity such as owning a shop or factory
• the trades (artisan) such as roofer, baker, builder
• sales
• agriculture

Start-up costs for an EI are low and the process takes relatively little time.

In this business structure the operator and their business are one; as such there is unlimited liability, which means that the operator is personally liable for company debts (and depending on the marital régime, a spouse may be exposed to repayment of debts). However at the point of set up it is possible to isolate and protect the principle residence by making a declaration with a notary. Further advice should be sought.

People registering EIs do not take on a trading name – they trade under their actual, personal name. However, they may choose a commercial name in addition. To see if a name is in use, consult INPI (there is a fee). It is illegal to use a name for a business that is protected by a trademark in that business sector.

Process to set up the operation

The documents required to make up the file to be submitted to the CFE vary depending on the activity but will include the following:

• Application for registration form (demande d'immatriculation). These may be specific to the operation being started
• Proof of address (recent EDF bill, rental contract) and copy
• Proof of identity (passport, residence card)
• If the activity is regulated, then required proof of compliance to training standards
• If married under the régime "in community of property" the spouse must provide written proof that they have been told and understand the consequences of debt
• To find out more detail and to download the appropriate application forms, use the interactive tool to "Create a CFE dossier": Click here (in French)

Submit the documents to the appropriate local CFE office. CFE issues a receipt (récépissé de dépôt de dossier de création d'entreprise) which states that the business is in the process of registration (en attente d'immatriculation). This document allows a person to apply for services (electricity, telephone). The processing time is generally two to ten days at which point the business is officially open for trade.

A spouse or registered partner may help with the business on a regular basis but should be declared to the CFE where they will be assigned the role of collaborator (collaborateur), employee (salarié) or associate (associé).

Tax and the EI

An EI does not need to submit annual books for audit (although it may be checked at any time by tax authorities). There are certain annual tax obligations. These very depending on circumstances, and the tax régime that applies.

How to set up an EURL or a SARL

With an EURL, the business is wholly owned by a single individual and managed as a limited liability single shareholder corporation. The gérant or managing director/company secretary - has sole legal responsibility for running of the company. It's not essential that this person be the business owner. It may be a person operating on a non-salaried basis as gérant non rémunéréé.

In the case of a SARL, the business must have a minimum of two and maximum of 100 partners.

In both the EURL and SARL the company can be established with any amount of capital from €1. The owner/s liability is limited to the amount of their capital investment.

Setup process

First identify if the activities of the intended company are regulated and if so, verify the qualifications and requirements for a licence and liability insurance.

For a full list of regulated professions and the process required to register: Click here and select the profession from the alphabet tabs (in French)

Write and adopt the statutes

The choice of statute can have legal and tax implications. Advice can be sought from an accountant or notaire. At this point a managing director (gérant) should be named.

Four dated and signed copies of the statutes must be lodged with the Impôts des Entreprises (SIE) within one month of the date of signatures. This can be done through the CFE.

• For a sample document providing statutes for an EURL: Click here (in French)
• For a sample document providing statutes for a SARL: Click here (in French)

Establish a business address (domicile). This may be:

• the business manager's home address if they are a home owner (unlimited period)
• a leased residential address (if agreed by the landlord and for a maximum period of five years)
• a rented "address" from a business which provides this service (société de domiciliation or a pépinière d'entreprise)

A certificate of domicile will be required.

Publish a notice of company formation in an appropriate publication (legal gazette).

• For an example of the text (in French): Click here
• For a list of local publications where this notice can be published: Click here and use the interactive map

Submitting the application to the CFE

The CFE can provide the full list of documents required, appropriate to the activities of the company being formed. However it will include the following:

• Two copies of the statutes
• A copy of the gazette or the letter submitting details to the gazette
• Certificate of domicile of the company
• Named manager's proof of identity

Once submitted, the business is officially open. The CFE issues a receipt (récépissé de dépôt de dossier de création d'entreprise) stating that the business is awaiting registration (en attente d'immatriculation). In some cases a unique INSEE number may be issued.

Preparations for trading may begin with applications for installation of electricity, telephone and opening a company bank account. Also registration with the pensions organisation, company insurance and employee social security.

Note that the complex nature of the statutes and the legal and fiscal implications means that the help and advice of an accountant or lawyer is highly recommended. There are several organisations which specialise in setting up EURLs and SARLs in France.

Tax and accounting

This is complex and the advice of a professional corporate accountant or tax lawyer is advised both before the set up process and during the running of the company.

The company must submit audited books annually.

The profits of a SARL will be assessed for income tax through the system of corporate taxation. There is also the facility for a "family business" (SARL de famille), where owners can elect to be taxed through personal income tax.

Tax Régimes: BIC, BNC and BA

1. The profits of a commercial, industrial or artisanal business are taxed on a tax régime called Bénéfices Industriels et Commerciaux (BIC).
2. Professional operations are taxed under the Bénéfices non Commerciaux (BNC) régime. 
3. Those in agriculture are taxed under the Bénéfices Acricole (BA) régime.

A business may be exempt from being registered for VAT. However a business not charging VAT may not reclaim VAT expenses.

If a business turns over less than a certain figure per year it qualifies for a somewhat simpler tax system known as the régime du réel simplifié. The turnover thresholds are:  BNC: €76,300; BIC: €763,000 for resellers, and those providing furnished accommodation or €230,000 for those providing services. If it exceeds those thresholds it must pay taxes under the régime du réel normal.

It's highly recommended to consult an accountant before and during the setup of any business to ensure full understanding of the taxes, charges and possible rebates that apply, and which of the many options are most suitable for a specific case.

The Micro-entreprise - Micro-BIC and Micro-BNC

The very smallest businesses can opt for a régime that has substantially less complexity than even the régime du réel simplifié. The turnover thresholds to qualify for these - which, once again, vary with the nature of the business - are substantially lower.

This greatly simplified tax system is called the  régime micro-entreprise (split into Micro-BIC and Micro-BNC régimes) and is available to:

• Those re-selling goods and materials, or renting furnished rental accommodation with an annual turnover not exceeding €76,300 HT (hors taxes, or ex-VAT) - Micro-BIC
• Professionals - Micro-BIC - and artisans - Micro-BNC - with an annual turnover not exceeding €27,000 HT

In the micro-entreprise, taxation is greatly simplified because a fixed percentage of revenues is written off as the business's expenses, and the remainder is taxed as profit - so there is no need to account for actual expenses. The actual percentages involved depend on the nature of the specific business.

A business may exceed these thresholds for two consecutive years before being required to change régime to régime simplifié d'imposition. A business may opt to change its régime from micro-BIC but there are restrictions on how and when this happens.

• For full details on the Micro-BIC and Micro-BNC tax régimes from APCE: Click here (in French)

Regulated Professions

The prospective businessperson should first identify if their intended business activity is regulated. In France, many are including: accountant, architect, beautician or hairdresser, builder or plumber, electrician, osteopath, notary, veterinarian, running a gîte, campsite, chambre d'hôte or equestrian centre, an art gallery, a travel agency and being an antiques dealer.

Regulated professions require registration with the appropriate organisation (such as the URSSAF or the Chambre des Metiers). Depending on the activity, proof that qualification and experience complies with French standards may be required (this might include translations of certificates and references). A licence may be required and in most cases, proof of liability insurance is needed.

• For a full list of regulated professions and the process required to register: Click here and select the profession from the alphabet tabs (in French)

Further Information

• The French organisation APCE has comprehensive information online (in French):
  • For comprehensive information and tables of comparison between the various legal structures from the APCE: Click here and refer to the menu options on the left (in French)
  • For relevant documents and forms see the "tool box" (Boîte à outils) section of the APCE website: Click here
• The French Government service PME & les Independents (in French) is a portal to all relevant information to the business owner and employer in France
• General information under several heading (in English) from Notaires de France on starting a business in France: Click here

Foreign Company with Employees in France

The French online business service, net-entreprises has comprehensive information and links relevant to a foreign company hiring staff in France.

• For full details and links to related information: Click here

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• AngloINFO INFOrmation Page Creating a Non-profit Association (Loi 1901) in France
• AngloINFO INFOrmation Page Owning & Running Holiday Accommodation
• AngloINFO INFOrmation Page French Job Contracts
• AngloINFO INFOrmation Page Unemployment, Benefits and Job Seeking in France

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