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France is undoubtedly one of Europe’s most iconic countries. This nation has a rich history and offers plenty of business opportunities for business professionals and entrepreneurs. If you are interested in setting up a business or expanding your existing one to France, you might be wondering how to do this properly.
In this guide, we will go over some great reasons to set up or expand a business in France as well as the steps to do so.
Why You Should Set Up or Expand a Business to France
Plenty of European countries appear attractive to business owners. However, France stands out among these as one of the best places to start or expand a business to. Some reasons to do business in France include:
Investment Friendly Environment
France is considered one of the most business-friendly countries in Europe. As one of the largest markets in the continent, finding success in France means you won’t have any trouble breaking into other European markets.
It is estimated that over 28,000 foreign businesses have set up operations or have invested in the country. These businesses employ one-tenth of the French workforce.
France is also attractive to investors for its central geographic location. Businesses can source supplies and export finished goods to the United Kingdom or mainland European nations with ease. This creates plenty of expansion opportunities for businesses that find their footing in France.
France also has a relatively wealthy population. The average French household has an annual disposable income of approximately $34,000. This is higher than the OECD average of $30,000.
Around 65% of the French working age population is employed. This means that the average person in France is relatively wealthy and has plenty of disposable income to spend on goods and services.
Setting up or expanding a business to France is advantageous because it allows business owners to market their products and services to this wealthy population and make sales. So if your business is currently located in a less wealthy country, you can certainly benefit by expanding your operations to France.
France is known to have a highly skilled workforce. Approximately 80% of French adults have completed high school and/or a University level education. French adults who hold degrees and diplomas are especially valuable to the workforce because they possess special skills and expertise that allows them to succeed in complex job roles.
Foreign business owners and entrepreneurs who start doing business in France will have a huge pool of skilled workers to choose from once they begin hiring staff locally. This saves them the trouble of bringing workers from other countries to fill job positions.
Advanced Technology and Innovation
France is also considered a technological powerhouse in Europe. The country is at the forefront of innovation and technological developments. This is thanks to both its skilled workforce and the fact that it is home to a massive number of start-ups.
People are encouraged to create start-ups in France because the country is home to hundreds of start-up incubators. Such start-ups are offered the resources needed to take risks and create innovations that benefit whole industries.
While many businesses set up shop in France to market products to locals, it is worth noting that France is one of the top tourist destinations on the planet. The country receives around 30 million tourists per year. Many of these tourists are wealthy individuals with funds to spend on local goods and services.
Therefore, businesses that operate in France can benefit from marketing goods and services to tourists. Selling products and services to tourists also has the added bonus of promoting your business internationally. If these tourists are satisfied with your business’s offerings, they may tell others in their home country to try them.
Over time, you may be able to set up operations in other countries where you have developed a positive reputation thanks to word of mouth promotion from these tourists.
You might be interested in this article: Advantages of Starting a Company in France
How to Set Up or Expand a Business in France
The steps to set up or expand a business in France are as follows:
Create a Business Plan
The set up process for any business always starts with a business plan. This is true even for existing businesses that intend to expand to other countries. Your business plan is vital because it informs potential investors about your business’s present intentions, the resources you have available, and your plans for the future.
Your business plan will also serve as a roadmap for your set up and eventual operations. The comprehensive business plan should include key items such as:
- Executive summary
- A description of your company
- The business’s organization and management structure
- A market analysis that describes the current industry landscape
- A description of your products and/or services
- Financial projections
- Your current resources or funding sources
- A staff hiring plan
Select a Company Structure
The next step is to select a suitable company structure for your business. This is important because each company structure has specific requirements for minimum start up capital, management, and shareholders.
The most popular types of french company structures are:
Société Anonyme (SA)
Société Anonyme (SA) is a structure that refers to subsidiaries that are managed by shareholders who serve as the company’s board of directors. These directors must appoint the company’s general manager and chairman. You will need to put up a minimum starting capital of €37,000 if you opt to set up a Société Anonyme.
Société à Responsabilité Limitée (SARL)
Société à Responsabilité Limitée (SARL) is the company structure that closely resembles Limited Liability Companies. This structure is the most popular company structure in France.
You can operate your SARL with more than one manager and without having to put up a minimum starting capital.
Société par Actions Simplifiée (SAS)
Société par Actions Simplifiée (SAS) is a flexible type of company structure that resembles a joint-stock company. This type is especially popular among foreign businesses that wish to set up subsidiaries in France. You can run an SAS with a chairman and multiple managing directors.
Société par Actions Simplifiée Unipersonnelle (SASU)
Société par Actions Simplifiée Unipersonnelle (SASU) is a type of SAS in which a single shareholder represents the business. There is no minimum starting capital for this company structure.
Set Up a Bank Account in France
The next step is to set up a business bank account in France. Be sure to check various banks and learn which ones offer the business account type that suits your needs. You will also need to present your business plan to the bank account manager to demonstrate that you do not intend to engage in money laundering activities.
Once this is complete, you can deposit your minimum share capital to your new French bank account.
You can now incorporate your business in France. To do this, you must complete an application and gather the appropriate documents and submit them to various government offices. One of these is the National Institute of Statistics and Economic Studies (INSEE) whose job is to register your business in the country’s business directory.
You will also need to send documents to the commercial court known as Greffe du Tribunal de Commerce and the tax office known as Centre des Impôts.
Register the Business
Once your business has been successfully incorporated, you will receive an incorporation certificate known as Extrait Kbis. You will also receive an official company ID number known as a SIREN number.
You must use this company ID number on your invoices, business website, and official documents. Your bank account manager will also activate your account as soon as you receive your Extrait Kbis.
Hire Staff and Begin Your Operations
You can now begin hiring staff and commence your business operations. If you have set up a new business in France you can hire workers from the local workforce. If you have expanded an existing business to France, you should still opt to hire locally. However, you can bring in managers or workers with specialized skills from your home country provided that they hold an official work permit.
How OpenAEuropeanCompanay Can Help
The steps outlined above offer insight into the process of starting or expanding a business in France. However, you will need the guidance of experienced professionals to be able to complete each step successfully.
At OpenaEuropeanCompany, we have helped numerous business owners and entrepreneurs set up or expand businesses in France. We are familiar with local laws and regulations and can help you complete the process quickly. Please contact us to start doing business in France.