Branching Out Into France

We Americans are so entrepreneurial…we start with a lemonade stand at the age of ten, become editors of our high-school yearbooks and before we know it, we’re just out of college and writing business plans for zany ideas that amazingly work and make us rich.

Even though “entrepreneur” is decidely a French term, the French haven’t been an entrepreneurial lot at all, at least not until the last several years that I’ve observed. Laws have changed making it easier and less expensive to start a business. The young French are highly globalized and thinking on more international terms, speaking English fluently, Internet and IT savvy and starting to come up with zany ideas of their own.

Now that I have my Carte de Résident, I set out to create my own “société” (company) in France and spent quite a bit of time between advisors, attorneys and accountants to determine the best corporate structure for myself. There are a variety to choose from, the most common being:

Société anonyme (SA), a limited liability company like an American corporation suited to bigger organizations. An SA, which can be quoted on the stock exchange, requires at least seven shareholders and minimum capital (in cash or kind or both) of 38,100 Euros. An annual official audit is required.

Société à responsabilitié limitée (SARL), a limited liability company suited to smaller organizations and startups. An SARL requires two shareholders and capital of at least 7620 Euros. Accounts must be registered with the Tribunal de Commerce.

Enterprise unipersonnelle à responsabilité limitée (EURL) sole proprietorship. The same amount of capital, 7620 Euros, is needed to create a EURL or SARL, but there are more legal and accounting obligations for EURLs. A EURL is easy and cheap, about 150 Euros, to create. The French Chamber of Commerce has applications. The other forms of incorporation can set you back at least 760 Euros.

Surcursale (branch). It is possible to establish a presence in France without such formalities. Foreign companies can rent offices or register with a business center and set up a non-resident bank account. They can also take on an employee in France — the company pays the salary plus the employer’s social security and other contributions to the employee, who then pays these contributions to the appropriate organizations. If the company has its own premises, or employs at least two people in France, it must be officially represented a liaison office, a branch or a subsidiary.

France has tried to trim the red tape with the creation of Centres de Formalités des Entreprises (CFEs or Business Formalities Centers) http://www.ccip.fr/cfe/sommaire/sommaire.htm. It’s nearly one-stop shopping for creating a business. Instead of registering with a zillion governmental agencies, the CFE does it for you. There are still some formalities you must handle yourself: 1. Registering with the tax authorities and 2. Depositing the share capital. Dealing directly with a CFE shouldn’t be a problem if your French is good and you have time for the paperwork.

I chose to create a branch of my U.S. LLC and depended on advisor Jean Taquet to assist me. Together we visited a firm named “La Loi” to process the paperwork (33 rue Jeûneurs, 75002 Paris, 01.42.34.52.34). it was simple, painless and cost 350 euros. I was armed with my passport, U.S. corporation papers and what everyone in France should carry with them at all times — the latest EDF/GDF bill proof of your domicile in France.

A good source of information is London attorney John Howell’s soon-to-be-released book, titled “Starting a Business in France,” published by Cadogan Guides. John will be speaking at the upcoming Living and Investing in France Conference February 11 – 13, 2005 in New Orleans on this very topic, so if you’re thinking of imposing your entrepreurial self on France, this could be your perfect opportunity to get the facts! Visit /frenchproperty/conference/LIF_NOLA/LIF_NOLA_home.html for more information.

A la prochaine…

Adrian Leeds
Editor, Parler Paris

P.S. Special thanks to Rose Marie Burke for information regarding the corporate structures provided in the “Insider Paris Guide to Working and Living In France: The Ins and Outs,” part of our Insider Paris Guides series. This guide and the others Rose writes (Insider Guide to Good Value Paris Hotels, The Insider Guide to Biking in Paris) will no longer be available after December 31, 2004, so take advantage of this last opportunity to order them now! http://www.insiderparisguides.com/