A recent decree simplified the process for foreigners to create and expand his or her business in France. In essence, the decree of May 9th, 2007 negated the requirement of a foreign business owner card.
As a result, each year more than 30,000 corporations are created by foreigners in France.
Two different cases
Because they are allowed to live and work anywhere in Europe without a visa, these individuals are not obliged to meet certain requirements that others might have to. For instance, a German citizen could easily move to France in order to create his Corporation like any other French citizen would do. Among the different entities, he would be able to pick EIRL, SARL, EURL, SA, SAS etc…
For the investors outside of the European Union, the situation is different since they will have to obtain a visa before moving to France. In reality, the prospective business owner will have to obtain a “long term visa” or a “temporary visa” showing that his business plan makes sense. However, no visa will be required if he only wishes to have a commercial or industrial activity without the intent to live in France. In this case, he will be compelled to declare the nature of his activity to the department of State even before its creation.
Depending on your intended business activity, several regulations might exist. This means that it is absolutely critical to check whether or not your activity will require a permit or authorization. Creating a company without the proper authorization is a risk you cannot afford. Your lawyer will be here to assist you with this issue.
After preparing your business plan and reporting your project (alongside with your business plan) to the Department of State, your lawyer will assist you in the creation of your legal entity.
Choosing a corporation will require that a new “person” be created. Your legal entity (“personne morale”) will be distinguished from yourself, meaning you might not be liable for its debts. The Company will have a name, a domicile and its own holdings. This implies that you can not personally use the company assets without being charged with “misuse of company assets”.
Your entity will automatically be taxed as a company or, in some cases; you may elect this way of taxation as well.
You will need to register your company with either the Repertoire national des enterprises (RNE) or Registre du Commerce et des Sociétés (RCS) or Repertoire des métiers (RM), depending on your statutes.
To do so, the only administration you will have to deal with will be the CFE (Centre de Formalités des Entreprises).
Once your company is registered, several ID numbers will be given to you:
- SIREN number
- SIRET number
- APE Activity Code
- ID number to mention when you have to deal with the administration
During this registration, the capital stock will be paid into escrow with a bank or with a notary.
Your corporate lawyer will also write the Operating Agreement (called “statuts”) stating the rights and duties of the stakeholders and members and also nominate the first managers. This Operating Agreement will have to be published to the Tax Administration in four original copies.
Finally, you must publish your intent to create a company in a legal newspaper.
Within 3 months of registering your business, it is mandatory to obtain your “employees retirement affiliation”, even though you don’t have any employees nor you plan to do so.
In any case, it is also a smart move to insure your business or practice.
Creating a corporation in France is not rocket science, nevertheless you will need assistance from a corporate lawyer who will advise you on how to create your entity, which tax classification to choose in order to minimize the tax impact, what authorizations you will eventually need, etc…
To do so, our team of lawyers is available to facilitate your establishment in France.