Doing business

France

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Legal business entities

Types of companies and capital (max/min)	Number of partners/shareholders and liability	Maximum and/or minimum capital	Liabilities	Registration fees
Individual businessman alone	1 person	No notion of capital	Liability for debts on his personal property.	None
Limited liability company (SARL)	2 to 100 partners.	Set freely by the partners.	Limited to the amount of capital contributed.	Administrative formalities costs: around EUR 76.19; Advertising costs in the Gazette: around EUR 230.
Private limited company under sole ownership (EURL)	1 person	7,500 EUR minimum	Limited to the amount of capital contributed.	Administrative formalities costs: around EUR 76.19; Advertising costs in the Gazette: around EUR 230.
Public limited company (SA)	minimum 7 shareholders	EUR 225,000 minimum if the company brings in public savings, EUR 37,000 otherwise	Limited to the amount of capital contributed.	Administrative formalities costs: around EUR 76.19; Advertising costs in the Gazette: around EUR 230.
Simplified joint-stock company (SAS).	minimum : 1 natural person or legal entity	EUR 37,000 minimum	Limited to the amount of capital contributed.	Administrative formalities costs: around EUR 76.19; Advertising costs in the Gazette: around EUR 230.
General partnership (SNC).	minimum 2 partners	no minimum	Liability is joint and indefinite.	Administrative formalities costs: around EUR 76.19; Advertising costs in the Gazette: around EUR 230.
Limited joint-stock partnership	2 partners: the active partners and the silent partners	no minimum	The active partner: joint and indefinite; The silent partner: limited to the amount of capital contributed.	Administrative formalities costs: around EUR 76.19; Advertising costs in the Gazette: around EUR 230.
Non-trading company	minimum 2 partners	no minimum	Liability for registered debts.	Administrative formalities costs: around EUR 76.19; Advertising costs in the Gazette: around EUR 230.

Business setup procedures: The administrative formalities necessary to create a company have been simplified. Company formalities centers (CFE) have been set up; they are single places which forward all the documents in the creation dossier to the relevant services:
- the Clerk's office of the Commercial Court for registration in the Register of Commerce and Companies (RCS)
- the National Statistics Institute (INSEE) to obtain the numbers ( APE, SIREN, SIRET codes) necessary for recruiting employees and other procedures such as invoicing.
- the fiscal services (Tax Offices)and social services (URSSAF).
Some formalities are not taken care of by the CFEs such as requests for authorization for regulated professions or proof of domiciliation of a company.
Remember to check that the commercial name has not already been used or registered as a brand name with the INPI (National Institute for Industrial Property).
In addition, remember to reserve the domain name with the AFNIC (French Network Information Center) in case you decide to create a website in the more or less long term.
The competent organization: The Portal for the Company Formalities Centers
The register of commerce

FDI in figures

Foreign Direct Investment	2007	2008	2009
FDI inward flow (millions USD)	96,221	62,257	59,628
FDI stock (millions USD)	1,260,243.9	920,841.9	1,132,960.8
Performance Index*, ranking on 141 economies	88	100	71
Potential Index**, ranking on 141 economies	19	18	-
Number of Greenfield investments***	569	680	408
FDI inwards (in % of GFCF****)	17.3	10.0	22.8
FDI stock (in % of GDP)	48.6	32.3	42.8

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest France

Strong points

France is one of the world's ten economic powers. It has quality infrastructures. The work force is qualified and productive (second in Europe in terms of hourly productivity). France is an innovative country with an highly developed tertiary fabric.

Weak points

The drawbacks of the French market are: one of the highest taxation rates in the world, significant manpower costs, low competitiveness in some sectors which can hinder the economies of scale. Research suffers from insufficient collaboration between the public and private sectors.

Government measures to motivate or restrict FDI

Foreign companies enjoy the same government aid as French companies (aid for productive investment, R&D, professional training, job creation, etc.). The number of administrative formalities for foreign companies to settle in France has been reduced.

To fight against the financial crisis, the French government has implemented different mesures: the economic relaunch plan has committed the financing of 1,000 projects. These investments bear on transport infrastructures, higher education and research, State real estate property, housing and urban redevelopment and also health. Additionally, Sarkozy's government has abolished the professional tax in order to permanantly stimulate investment. Furthermore, the government established a strategic investment fund of EUR 20 billion, in Autumn 2008. Its aim: to buy stakes in industrial companies whose development is essential to the French economy.

Bilateral investment conventions signed by France

France has signed bilateral agreements on investments with 81 countries.
To see the list of countries, click here.
To see the conventions, click here.

Procedures relative to foreign investment

Freedom of establishment: Yes
Acquisition of holdings: Possible
When more than 5% of the capital or voting rights of a company listed on the stock exchange are likely to change holders, it is compulsory to inform the Financial Market Authority (within 5 days) and the issuing company (within 15 days).
Obligation to declare: For any acquisition of over 10% of the capital or voting rights of a French company: declaration for statistical purposes to the credit institutions.
For any creation or acquisition of more than one third of the capital or voting rights, when the investment is over 1.5 million euros: administrative declaration to the Ministry of Finance (Directorate-General of the Treasury and Economic Policy) (in French).
Competent organization for the declaration: Directorate of the Treasury and Economic Policy of the Ministry of Finance
Requests for specific authorizations: Some sectors are subject to procedures to obtain prior authorization: games for money; private security; research and development activities on pathogenic or toxic agents; phone-tapping systems; information technologies; information systems security; goods and technologies with a dual use; means of cryptology in the digital economy; companies holding national defense secrets; the arms trade; companies which have concluded a contract with the Ministry of Defense.

Finding assistance for further information

Investment aid agency: The French Agency for international investments (AFII)
The Fund for the Development of SMIs
OSEO, Financing and support for SMEs
Other useful resources: Report of the AFII
The heading devoted to business opportunities of the AFII
Report on foreign direct investment in France, AFII, 2009