Incentives include simplified legislations, tax breaks, subsidies and grants. For a foreigner creating a business or working as a self-employed person in France can often be easier that getting a work permit to be employed by someone else.
There is a series of new laws aiming to accelerate the development of small and medium-sized companies and self-employers in France. One of the most recent is the Young Innovative Company (YIC) legislation. A YIC is categorised as an SME (Small and Medium-size Enterprise) that spends 15% or more of expenditure on Research & Development and can benefit from:
- exemption from social charges for all employees involved in R&D projects for 8 years
- exemption from corporate taxation for 8 years
- income tax exemption for the first three profitable years and 50% relief for the following two years up to €100,000
There is also a national agency (CFE, Centre de Formalités des Entreprises) which assists in the process of creating a company.
As a self-employed, you will probably fall within one of the following categories:
- Freelance (Profession libérale): for professionals, such as consultants, translators, accountants, doctors, lawyers, architects, artists, etc., likely to working without employees (except secretary or assistant).
- Craftsman (Artisan): for craftsmen or manual professions, such as plumbers, electricians, etc. If planning to hire people or make a significant investment, it is better to think about creation of a company.
- Traders (Commerçant): shopkeeper, wholesale, etc.
Types of company
If you would like to create a company, you have a choice of more then 10 different structures. The most important are the following:
- One-Man Business (IE, Entreprise individuelle): a simple structure, one person in charge with no capital requirement and simple administration.
- Partnership (SNC, Société en Nom Collectif) minimum of 2 partners, with minimal capital requirement.
- Limited Liability Company ( SARL, Société à Responsabilité Limitée): the most common structure for small and medium-sized business, for 2-50 shareholders. There is also a version for one-partner limited company (EURL, Entreprise Unipersonnelle à Responsabilité Limitée). No minimal capital requirements (which means that you can theoretically set up a Limited company with 1 euro!).
- Joint stock company (SA, Société Anonyme): The most common structure for larger business. Minimum of seven shareholders and capital of 37,000. Half of the capital must be subscribed in cash (or in kind) on creation and the remainder in the five years subsequent to creation. In addition, there is a single shareholder structure (SASU, Société par actions simplifiée univpersonnelle) and one for 2 to 7 shareholders (SAS, Société par Actions Simplifiée); both with the same minimum capital requirement.
- Marketing office (Bureau de Liaison): these are used principally by foreign companies starting off in France - you can use this for marketing and business development activity, but no trade may take place.
- Branch office (Succursale) is a secondary office of a larger foreign company, which can carry out business in the name and on behalf of the main company.
Where to find more information
Comprehensive information on the creation of the business in France is provided by AFE (Agence France Entrepreneur), the state agency for business creation (https://www.afecreation.fr/). This includes information about legal structures, tax systems, procedures of company-creations, social security aspects, financial aids and assistance available, and where to get other information. The web site has also large part of its contents available in English, German and Spanish.
Another good source of information and contacts are chambers of commerce and industry, organizations which are particularly active in France. The main website of French CCIs is only in French (http://www.cci.fr/). Many local regional CCIs have their own websites. A good example is Paris, available in French and English; the site has business creation information and practical advice.