UK and France: A Company Formation Comparison

The UK and France are both strong jurisdictions within Europe, boasting huge markets, stable economies, and a substantial political presence. They also play a major part in the European Union. The UK has one of the most successful economies in the EU and attracts an incredible amount of inward investment from Asia and the US. France has also been successful with attracting foreign investment and now offers a liberal business environment with streamlined procedures. There are various benefits for setting up a company in the UK and France, with location, language and legislation being just a few of the reasons why investors choose to base their companies there.

Procedures involved in company formation in both countries do differ, despite both countries complying with EU directives. This article looks to demonstrate these differences and similarities, in conjunction with the strengths and weaknesses of each.

Types of Company Formation

Both countries provide a range of company forms to suit all types of business:

There are four types of company to incorporate in the UK. These include; Private Limited Company (Ltd), Public Limited Company (PLC), Branch of a foreign company, and Limited Liability Partnership.

In France there are three main forms of company to incorporate. These include; Business Corporation – Societé Anonyme (SA), Specialists Limited Company – SARL, and Simplified Stock Corporation – SAS.

How complicated is the formation process?

As French procedures for company formation have been liberalised significantly in recent years, the process is much more streamlined. Stringent French bureaucracy however, still exists and this can be difficult to navigate if you are non-domicile or unfamiliar with the regulations. General formalities of company formation include share capital (amounts vary), shareholders, bank account, local office, statutory required audited accounts and tax registration.

UK company formation formalities also include director/shareholder, share capital, bank account, local office, tax registration and statutory required audited accounts. There is much less legislation involved than in France and as such the timescale is much shorter. Setting up a UK company can be done within a week. Regulations still apply though, and although welcoming to foreign investment, the process can pose difficulties for non-domiciles.

Availability of staff

While recruiting staff in France is relatively easy, with a number of educated and skilled workers available, French labour laws are incredibly complex and warrant expert legal advice and support. It is important to take particular care with employment contracts and the regulations surrounding them, and collective agreements with regard to commercial and industrial sectors, and the employees within these sectors.

Labour laws are much less stringent in the UK. There is a thriving recruitment sector of well-educated and motivated British workers, despite the unemployment rate consistently falling over