Company Formation France
Updated on Tuesday 15th October 2019
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In order to open a company in France, it is necessary to start the company formation procedure, which can be completed in a short period of time; at the same time, the procedure is not costly. Any person - no matter his or her nationality or residency - can be a director or a shareholder in a company in France. Shareholders of a French company can be natural persons or legal entities. The company must have a local registered office and BridgeWest offers this type of service.
A plan containing financial information for the future activities of the company is needed and it can be provided by the specialists from BridgeWest. In order to register company in France that is set up as a limited company, the minimum share capital necessary is of EUR 1.
One of the first steps in opening a company in France is the selection of a suitable company; the company trading name has to be registered with the French Trade Register. After obtaining the name approval, the following stages must be covered in order to benefit from a fast company incorporation procedure:
- the client must present identification documents, such as passport copies, identification cards or driver license of both shareholders and directors;
- it is also necessary to provide a recent utility bill or a bank statement as proof of residential address and criminal records;
- in order to open a bank account, the above-mentioned documents are required together with the application forms from the bank where the share capital will be deposited (the capital is of EUR 1 for a limited company);
- once all documents have been prepared, the company’s articles of association (“statuts”) can be drafted and signed by the shareholders;
- the client is also required to buy an accounting book from authorized stores or from the Commercial Court;
- the last step will be submitting all required documentation with the French Commerce Register.
The team of Bridgewest is prepared to provide a wide range of services for those who want to start a business in France; our specialists can also provide offshore company formation services for businessmen who are interested in investing in an offshore location. When investing in France, some of the basic services our team can offer are the following:
- drawing up the articles of association that can be signed through power of attorney (French laws require powers of attorney for any public notary proceedings);
- drawing up documents for company incorporation in France - specimen signatures, passport copies, application form required for company registration;
- arranging public notary proceedings (all procedures for company incorporation are done in front of a French public notary);
- providing a registered office in France on demand - the registered office serves as headquarters for the company in France and it will be made public;
- setting up a bank account for the company in France - BridgeWest will help in setting up the share capital bank account, as well as a current bank account once the company is incorporated.
Our team of specialists in company formation in France can also recommend a local accountant, who can handle various accounting procedures necessary for any French company. Investors can also receive tax advice and information on the business permits that can be required for a specific economic activity.
The French limited liability company (Société A Responsabilité Limitée - S.A.R.L.)
As a general rule, the French limited liability company is selected for registration by small and medium-sized companies. This is given by the fact that company can be registered with a very low capital, but also due to the liability advantages offered to its investors.
This company type can be set up by both natural persons and legal entities. It is necessary to have at least one shareholder for the registration of this business form. The maximum number of shareholders is limited at 100. Shareholders will be held liable to the extent of their contributions. This company type has to be registered with the Trade Register in France.
The limited liability company is a very common way to start a business in most of the world's jurisdictions and various types of limited liability companies can also be selected for offshore company setup. In France, this type of company must be registered for tax purpose and in this sense, the legislation requires commercial companies to be registered with the Corporate Tax Office.
The French joint stock company (Société Anonyme - S.A.)
A French joint stock company requires at least seven shareholders who can be individuals or legal entities and a minimum share capital of EUR 37,000. This requirement is necessary as long as the company is listed. Provided that the company is not listed, it can be formed with at least two shareholders.
The French joint stock company must have at least three directors. The liability of the shareholders will be limited to their capital contributions. Shares can be transferred or traded on the stock exchange. The French simplified stock corporation (Société par actions simplifiée - S.A.S.) provides its shareholder an easy and fast registration.
Only one shareholder is required and he or she will be held liable for the company’s obligations to the extent of his or her capital contributions. The minimum share capital for a French SAS is EUR 1 and it also requires a chairman or a president elected by the shareholders. This type of company must also be registered with the Trade Register, but also with the local Tax Administration.
French branch, subsidiary or representative office in France
In the case of foreign companies investing in France, other options are available. For example, they can set up branch office or subsidiaries in this country, which are seen as separate entities in which a foreign company owns shareholding rights. Foreign companies can also open extensions of the parent company in France.
How can investors set up a corporate bank account in France?
One of the legal requirements for opening a company in France is to set up a corporate bank account. This requirement is available in all the jurisdictions where one can register a company and it also necessary for offshore company formation, when investors have to set up an offshore bank account.
When starting a business in France, the investors can collaborate with any of the local commercial banks. As a general rule, each bank has the right to request specific documents, but in most cases, French banks will require foreign investors to provide documents such as: the valid passport of the investors, a proof regarding the investors’ address and a Trade Register certificate, which is issued upon the registration of the legal entity.
It is necessary to know that this procedure can also be handled by our team of specialists, without the need to travel to France for this specific purpose, but this can vary, based on the requirements of the selected bank where the bank account is opened. Investors should expect the following procedures:
- the bank will require information on the company’s business model;
- if the company will operate through a branch office or a subsidiary in France, then the bank will request a detailed history of the company;
- the company’s statutory documents concluded in France and the parent company’s bylaws (if applicable);
- the parent company’s bylaws have to be presented in the original language, but also a French translation will be required;
- the parent company’s financial statements (the latest version available).
The bank is legally entitled to verify the identity of the company’s owners, their degree and other specializations and then the bank’s representatives can request a meeting with the company’s owners. Provided that the procedure runs smoothly, the bank will then provide the approval of opening a corporate bank account, which will be followed by the issuance of the bank certificate and the IBAN.
Taxation in France
The standard VAT rate in France is 20%, but reduced rates of 10%, 5.5% and 2.1% are applied to certain products. The corporate tax in France is 33.33%. The tax for dividends paid by French companies to non-resident shareholders is set at 30%, unless exemptions are applied due to double taxation agreements or other regulations, the tax on royalties is set at 33% and there is a zero percent rate on interests. The local corporate tax system stipulates the following as well:
- a VAT applicable at a rate of 0% is available for international transportation and transportation at the level of the European Union (EU);
- the corporate tax rate of 33.33% is applicable to French companies with revenues above EUR 250 million;
- companies registered in France, starting with 2019, will be charged with a corporate income tax of 28%, as long as their yearly revenues are below EUR 500,000;
- businesses obtaining taxable income in 2020 will be charged with a tax rate of 28% regardless if their annual revenue is above or below EUR 500,000;
- in 2021, the corporate income tax will be charged at a rate of 26.5%;
- starting with 2022, the corporate income tax will be lowered at 25%.
Companies operating in France, like the ones registered in other European countries, are liable to a set of taxes, besides the corporate tax and the value added tax. Companies must also pay social contributions and register their employees for taxation purposes. Besides these, various withholding taxes can apply, which is generally not the case for offshore incorporation.
Although specific taxes can apply in the later situation, a set of taxes that are customarily imposed in most of the countries (at different rates, of course) are not charged to investors opting for offshore company formation. However, France can provide relevant tax advantages, one of them being the reduction of the corporate income tax, which was maintained for a long period of time at the rate mentioned earlier.
BridgeWest is also able to offer ready-made French companies and VAT registration. Please contact us for more information about how to open the company in France and prices. Our specialists are ready to assist with more details and in-depth advice on any of the procedures related to the registration of a local business.