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FAQ

Why France?

France has always been very attractive, but investors and entrepreneurs have historically been scared of the complexity of labor law and incorporation length. Conscious of this, politics in France have shifted to a more entrepreneurial-friendly speech. The newly elected president Emmanuel Macron has launched a massive simplification of the labor laws, as well as a reduced corporation tax. With other countries such as the USA and the UK choosing protectionist nationalist paths, France is now becoming a very attractive jurisdiction for all entrepreneurs who wish to access the EU and international markets, but also operate in a business-friendly jurisdiction. France came to recognise it’s strengths: world class engineering schools, fine craftsmanship and high-end creativity.

Company types

The two most popular company types in France are:

  • S.A.R.L. (Société à Responsabilité Limitée), the equivalent of a limited liability company
  • S.A.S. (Société par Actions Simplifiée), or limited liability company by shares

Both company types can be started with a minimum share capital of one euro.

The main differences are the following:

  • Directors: The S.A.R.L. can be managed by equally powered directors, whereas the S.A.S. is managed by a single President who may only be assisted by a General Director.
  • Corporate governance: the S.A.R.L. is governed by the shareholders and the directors, whereas the S.A.S. can be governed by many different entities who are defined in the bylaws.
  • Statutory audit: for both company types, once two of three thresholds are met, an eternal auditor must be appointed. For an S.A.R.L. the thresholds are 1,550,000€ of total assets, 3,100,000€ of turnover, 50 employees. For the S.A.S. the thresholds are 1,000,000€ of total assets, 2,000,000€ of turnover, 20 employees. However, an S.A.S. must always appoint an auditors if it is controlled by a company or itself controls companies.
  • Capital to liberate: 20% of the capital must be paid at the incorporation and 80% be paid at incorporation, and the remaining 50% during the 5 following years.
  • Shareholder rights and obligations: S.A.R.L. shareholder regime is more regulated and leaves little place for modifications, whereas the S.A.S. allows it to be freely determined by the bylaws.
  • Share transfer: S.A.R.L. share transfers require an approval of all the remaining shareholders via a super-majority vote. For an S.A.S., the by-laws determine how the share transfer can be done.

Brexit

Brexit has been a real headache for most companies based in the UK. While it is certain that companies who import/export and have regulated activities will be slowed down, what of other non regulated activities? Uncertainty slows investments down and it has become very hard to plan ahead for UK directors. With Theresa May reducing her majority in the parliament, the negotiations are now looking tougher for the UK. France however has taken a big step in the opposite direction with the election of business-friendly Emmanuel Macron who promised making labour law much easier as well as reducing corporate tax.

Call us now and discuss the possibility of incorporating in France!

Tax rates

To this day, the current Corporate Tax rates for most are the following:

  • 15% on profit up to 38,120€
  • 28% on profits in-between 38,120€ and 75,000€
  • 33.33% on profites above 75,000€

It is important that the French government has stated it’s will to reduce the corporate tax to 25% in the next few years. That is in line with the will of the EU to have similar tax rates across Europe.

VAT rate in France is at 20%. However there are reduced VAT rates of 10% for restaurants, transports, renovation/improvements works and certain medical drugs. 5.5% applies to food, water and non-alcoholic beverages, books, special equipment for the disabled and school canteens, some entertainments events and some domestic personal services.

Nominee directors and Shelf companies

Unfortunately in France it is impossible to have nominee directors and shareholders, as well as use shelf companies. The only way is to directly incorporate a company.
Contact us today to incorporate!

Lenght of the process

Depending on your reactivity, the process can take less than two weeks. However in our experience it usually takes around three to four weeks all included to obtain the company with it’s VAT number and bank account.

Future changes

One of the main reason France is so attractive at the moment is that it offers stability, openness to business and the European Union. While the UK has never been so instable with Brexit and the government’s very small majority, the USA loosing international credibility - France has elected the business-friendly Emmanuel Macron and is offering a very stable and trustworthy jurisdiction among the EU. France’s economy is picking back up with a growing GBP, falling unemployment and a renewed confidence. Prospects are great for companies incorporated in France: a dynamic market, business friendly politics and a stronger EU.