Starting a business in France

The business climate in France is one of the most attractive in the world. For five years running (to 2024), France attracted more foreign direct investment (FDI) than any other country in Europe. The French government provides a range of incentives for all businesses operating in the country including tax credits for research and development and for green industries. The standard corporate tax rate has also been reduced and simplified since 2017 and is competitive with the other leading European nations.

As the third-largest economy in Europe by GDP (and the seventh largest economy in the world), France provides a robust environment in which businesses can operate. Its economy is diversified and has a number of key sectors, including manufacturing, services and a robust agricultural sector, recognised around the world for its wine and dairy products.

The French economy is also stable due to its membership of the European Union (EU), which delivers a number of benefits to companies operating in France. Free movement of goods allows businesses to trade within Europe without tariffs and restrictions. EU businesses also benefit from the stability of the single currency, transparency of taxation and business accounting rules, and simplified administration procedures including a ‘one-stop-shop’ for VAT reporting for eligible businesses.

France can boast a high standard of education and training, thanks in no small part to government investment. This provides businesses with a considerable pool of talent across many sectors and is further enhanced by employment policies that attract talent and educational initiatives that encourage innovation and entrepreneurship. In addition, as France is part of the EU, businesses can draw on an internationally diverse talent pool.

The French government has made substantial investment in R&D programmes, which have driven economic growth and technological advancement. In the Global Innovation Index 2024, France’s innovation ecosystem stood at 12th out of 133 countries around the world. Initiatives like the French Tech Visa, which simplifies visa procedures for foreign tech talent, and the French Tech Seed Fund, which supports early-stage startups, encourage innovation and entrepreneurship.

The limited liability company (Société à responsabilité limitée, or SARL) is a popular structure in France and is used by a variety of businesses, including foreign companies who want to set up a subsidiary or branch office. It has a minimum of two partners and a maximum of 100 and those partners’ liability is limited to the level of their contributions (with the exception of certain circumstances, such as mismanagement). Partners may be natural persons or legal persons (such as another business). There is no minimum share capital required.

A SARL de famille – for family businesses – possesses all the characteristics of a SARL but can enjoy certain specific tax benefits and allows free transfer of shares.

The public limited company (Société anonyme, or SA) is suitable for any type of activity (except for certain regulated sectors) and is typically used by larger companies looking to list on the stock exchange. It can be run by a board of directors with a CEO or by a supervisory board with an executive board. An SA must have a minimum of two shareholders (or seven if listed on a stock exchange) who may be natural persons or legal persons. There isn’t a limit on the maximum number of shareholders.

The simplified joint-stock business (Société par actions simplifiée, or SAS) is the most common legal form in France. It is a popular choice among entrepreneurs and foreign businesses looking to establish a subsidiary in the country because it offers great flexibility. An SAS must have at least two partners, who can be either individuals or legal entities, and a president must be appointed to manage the company. SAS partners are free to establish the company’s bylaws, giving them considerable control of governance, organisation and operations.

A single-person simplified joint-stock business (Société par actions simplifiée unipersonnelle, or SASU) is essentially an SAS with only one single partner, who can be an individual or a legal person. The single partner in a SASU has the unilateral authority to make all decisions regarding the business’s management and operation. A SASU can be converted to a SAS (and vice versa) if required.

A limited partnership (Société en commandite simple, or SCS) requires at least two partners, one of which is a general partner and the other a limited partner. General partners are indefinitely, jointly and severally liable for the debts of the company; while the liability of limited partners applies only to their contributions. Unless the articles of association state otherwise, all general partners are managers of the company. Limited partners, on the other hand, are ‘passive’ and must not interfere with the management of the entity.

A partnership limited by shares (Société en commandite par actions, or SCA) is a hybrid legal structure that combines elements of a partnership (SCS) and a public limited company (SA). An SCA has two types of partners – general partners, who actively manage the company, and limited partners whose liability is capped. The share capital of an SCA must be at least €37,000, or €225,000 if the company lists itself publicly. The main difference between an SCA and an SCS is that the ownership shares of an SCA are freely transferable, while those of an SCS are not.