Why and how to start a business in France
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France provides generous tax incentives for new businesses – here’s how you can take advantage of this to start up your own company in France
France is one of the most powerful economies in the world and it’s only getting stronger. It provides generous tax incentives for new companies and financial help to startups, making it an attractive place to start and run a business. So, starting a business in the jewel of Europe is a no-brainer. Here’s how you can do it.
Recommended reading: Running a business
Why should I start a business in France?
France is one of the 10 largest economies in the world. It is also among the top countries for GDP per capita – it’s a wealthy country whose people have cash to splash. But that’s not all. There are some great tax incentives to starting a business in France:
• Corporation tax: You only pay tax on the income linked to your permanent establishment. This is your registered French address for conducting business in France. What does this mean? If you set up a business in France but all your income is linked to a US address, you’ll be exempt from corporation tax.
• Government subsidies and tax credit schemes: France is geared towards startups and offers many incentives to new businesses. These include:
- 30% tax exemption on your research and development expenses (up to €100 million)
- Complete exemption from declaring taxes during your first year of business
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If that wasn’t enough, France is part of the world’s biggest trading union (the EU). Paris is also predicted to become the financial capital of Europe once the UK leaves the EU. So there’s no better time to start a business in France than today!
Now you know why to start a business in France here’s how to do it
You’ve decided to start your business from scratch. You might already have experience of running your own businesses around the world and know what you’re doing when it comes to building a solid business and brand. But every country has its quirks, and France is no exception.
These are the steps you need to take to start a business ‘the French way’:
1. Check if your business is regulated
Regulation is a big deal in France. It’s part of the EU (which takes regulation very seriously) and has many domestic rules too. To avoid paying fines, being shut down, or serving time in prison, check here to see if your chosen business is regulated.
2. Decide on your company structure
You can choose to operate as a sole trader, or a company. For the former this means you’ll be an ‘entreprise individuelle’. With the latter you have options, including:
• EURL: Entreprise Unipersonelle à Responsibilité Limitée
• SARL: Société à Responsibilité Limitée
• SA: Societé Anonyme
• SAS: Societé Par Actions Simplifieé
• ME: Micro-Entreprises
To decide which structure is best for your business, read through this great article. It goes into great detail and includes many useful resources.
3. Establish whether you can get financial support
Getting help from the authorities is a key reason for starting a business in France. French banks are obliged to give financial assistance to any new business. Some of the aid you’re eligible for includes:
• PCE: Prêt à la Création d’Entreprise – A startup loan of up to €7,000
• PBE: Prêts Bancaires aux Entreprises – A business loan
The support you can get depends on the region of France you seek it from. Get in contact with the appropriate Conseil Régional and find out today.
4. Register your business
Every business in France needs an ‘extrait Kbis’. This is your certificate of incorporation and is the first step in registering your business. Once you have an ‘extrait Kbis’ you need to register your business with the correct CFE (Centre de Formalités des Entreprises).
5. Open a business account
French law states you can open a business account with €1, but in reality you need to deposit €4,000 or more. You’ll need to supply your extrait Kbis to get your share capital unblocked.
6. Get incorporated
This is necessary to trade. It provides you with stamps from the French government. I recommend you speak with a registered French chartered accountant. Doing this will make sure you are recognised by all of the appropriate departments. It also gives you access to experts versed in the local legal structure, which will help as you grow your business.
Investing in existing business infrastructure
A lot of the biggest brands have grown because they were bought or merged with another company. And now, France is loosening its laws on mergers and acquisitions (M&A), as President Macron primes his nation to Europe’s post-Brexit business leader. So instead of starting your own company, you could always buy one, form an alliance, or become a franchisee of a French (or global) brand (cafés, fast food chains, salons — all popular business models making inroads in French cities and towns).
The process of acquiring a business in France is very straightforward, as this article explains. It covers what you need to do if you decide to take the quick route into starting a business in France.
Starting a business in France is a great idea. It’s a vibrant, powerful, and booming nation with a great culture. It provides you with a window into the EU and access to Europe’s next financial capital (Paris). So waste no more time, start your French business today!
Patrick Foster is an ecommerce consultant