Company Formation in France: A Guide for US Entrepreneurs and Expats

With a bustling capital city and one of the largest economies in Europe, France can be the perfect place for international business. The country boasts an ideal location for trade as the bridge between northern and southern Europe, a burgeoning tech industry with a focus on clean energy and a straightforward business registration process.

For American expats or entrepreneurs thinking about starting a business in France as a foreigner, there are a number of necessary procedures before you can begin operating in the country. In this article, we will discuss the ways you can build a successful and reputable firm in one of the oldest countries in the world. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

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Obtaining a Visa or Residence Permit

First, you’ll need to determine your legal status in the country. Any foreigner looking to start a French company must have some kind of temporary residence permit.

American entrepreneurs can apply for a long-stay visa with the status of one-year Entrepreneur/Professional Libérale for self-employed people, or the multi-year Talent Passport permit for highly skilled workers, business investors and startup founders. There is also the four-year French Tech visa, which is a streamlined version of the Talent Passport that often has no diploma requirements.

To apply for these business visas, you’ll need to show your business plan is viable, have proof of sufficient funds to support both you and your project, and often a criminal record certificate.

Choosing a Business Structure

France has multiple legal structures for companies, each with their own benefits, capital requirements and tax obligations. There are some that benefit larger firms with multiple partners, and some that are geared more towards sole proprietors thinking about hitting the market one day.

The following are some of the most common types:

• Enterprise Individuelle (EI): A sole proprietorship
• Micro-entrepreneur or auto-entrepreneur: A simplified sole proprietorship, ideal for freelancers and small businesses with limited revenue
• Société à responsabilité limitée (SARL): Multiple shareholder LLC
• Entreprise Unipersonnelle à Responsabilité Limitée (EURL): Single-owner LLC
• Société par actions Simplifiée (SAS): A simplified joint stock company, popular with startups seeking investors
• Société anonyme (SA): A public limited company, for large-scale firms or businesses set to go public on the stock exchange

Name and Register Your Business

Registering your business is mandatory in France, and everything you need for business registration in France can be completed with the Centre de Formalités des Entreprises, or CFE.

Once you have confirmed that your chosen business name is unique and has not been registered with the Institut National de la Propriété Industrielle, you can register with CFE and continue the process. Upon filing your paperwork, you’ll receive an official certificate of incorporation called an Kbis.

Once you incorporate your business and receive your unique 14-digit registration number, including your SIREN and SIRET number. The SIREN number provides access to all the legal and financial information for your business, while the SIRET number identifies where your business is located. You will also receive an Activite principale de l’entreprise (or APE) number, which tells the government exactly what your business does.³

The cost of registering your business will depend on the business type and can vary from €100 to €250.²

Prepare Articles of Association

For certain business structures such as SARL or SAS, you must draft articles of association on the firm’s social, fiscal and legal regulations, known as statuts in France. This will define the company’s purpose, its governance and the roles of its directors, and can only be completed after a company name has been chosen.¹

Drafting of the articles can cost anywhere from €1,000 to €2,500, depending on the size of the company.¹

Once these articles are signed, submitted and approved, the business will be incorporated. These forms are not required if you are starting a sole proprietorship.

Opening a French Bank Account

Except for very small businesses, you must have a local business bank account in France. Depending on the size of your company, you may be required to deposit an initial share capital into this account and use the certificate of deposit to complete your business registration. You’ll need to bring your ID, visa, proof of address and your business plan to the bank to complete this process.

For those choosing a SARL or SAS business structure, a minimum capital deposit of at least €1 is required and can vary depending on industry.^1,2 The share capital you put into the account will be unblocked as soon as the bank receives your Kbis officially certifying the incorporation of your company.³

Whether you plan to use an actual office or create a remote-first business, an official French address can speed up the process of opening a bank account. Nonresidents can rent a local office or use a registered address service, but that can cost at least €200 annually.²

Save Time and Hassle With Wise Business

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Account opening is 100% online, with no need to visit a branch or book appointments.

Once you’re set up, you can connect to software such as Wave, FreshBooks, and more. You can also withdraw funds from Stripe without currency conversion fees.

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Taxes and Social Security Requirements

The total taxes you will pay in France depends on the type of business you form. For instance, micro-entrepreneurs pay simplified social charges and income tax based on turnover, while an EI pays social charges and income tax based on net profit with slightly more complex filing. Large companies may also have directors paying personal income tax on salary or dividends.

Any company subject to Impôt sur les sociétés, or corporate tax, is taxed at a standard rate of 25% on profits. A reduced rate of 15% may apply to businesses in which there was less than or equal to €10,000,000 during the year and their share capital is fully paid and at least 75% of the company is owned by individuals.

The standard rate of VAT in France is 20%, but lower rates of 10% and 5.5% are available for certain goods and services.⁴ The current threshold for VAT is €34,400 for service-based businesses and €85,800 for commercial activities, bars, restaurants and accommodation.

Tax payments in France are made in four quarterly installments on fixed dates. A tax treaty between the U.S. and France helps to avoid double taxation and tax evasion, but may mean that Americans need to file taxes annually with the IRS despite the foreign income.

Conclusion

Thanks to a prime location in Europe, strong legal system and business-friendly environment, France can be a profitable business backdrop for American expats and entrepreneurs. The country’s skilled talent pool and focus on technology startups can be a major advantage to many businesspeople.

As long as all the legal and bureaucratic requirements are met, foreigners can create any size of business that can thrive in the French economy.

Frequently Asked Questions

Can you start a business in France as a foreigner?

Yes, but businesspeople will need the necessary visas or resident permits and often a local bank account, whether you plan on being in the country or not.

Do I need to live in France to own a company there?

No, you can own and manage a French company without living in the country, but local representation may be required in some cases.

What’s the minimum capital required to start a business in France?

There is no fixed amount, but you need to prove that you have enough money to realistically support yourself and your business in the country.

How long does it take to register a company in France?

Applying for a residence permit, opening a bank account, and gathering the necessary documents to register your company can take anywhere from two to three months, while actually registering with the CFE and obtaining the information to begin can take a few weeks.