Although being the 5th largest economy in the world, France has been slower than many of its EU counterparts to embrace a truly liberal business culture. At the same time, it has aggressively sought to attract foreign direct investment - and with considerable success.

What is the most common type of French company incorporation?

There are four main kinds of French company incorporation:

  • business corporation – Société Anonyme (SA)
  • private limited company – Société Anonyme à Responsabilité Limité (SARL) 
  • simplified stock corporation - SAS
  • Societe Civile Immobilière (SCI)

Main requirements for an SA company

  • The minimum share capital is €37,000
  • the company must have at least seven shareholders
  • shareholders are liable up to the limit of their capital contribution
  • accounts must be audited in line with statutory requirements
  • top managers are treated as employees for tax and social security purposes

Main requirements for a SARL company

  • the minimum share capital is €1 however banks prefer the company to have at least 4000 € share capital.
  • the minimum number of shareholders is one (also called a EURL Company)
  • shareholders are liable up to the limit of their capital contribution
  • accounts must be audited in line with statutory requirements
  • top managers have more onerous tax and security rules than SA managers

Recruitment environment

Recruitment itself is reasonably straightforward in France but labour laws are very complex, much more so than in most other EU countries. Unemployment is running at about approx.9% . Employment contracts for a fixed term are only permissible in a limited number of situations. Certain collective agreements negotiated at national level are automatically applicable to certain commercial and industrial sectors. In other sectors, such agreements are only applicable when agreed to by the employer. Collective agreements cover all workers, whether or not unionized.

Regulatory environment

France has a well-developed legal and regulatory system broadly similar to that in other EU member states. There are few restrictions on setting up companies, except in certain areas such as banking and insurance and there is no restriction on imports or capital from abroad. However, state ownership is still a significant feature of the French economy, particularly in infrastructure industries and some restrictions still apply. Furthermore, the French legal system is slow and expensive, which underlines the importance of securing good legal advice from the outset.

Filing requirements

A SARL is required to file an annual return, register of officers and accounts. Although it is not routine, in some cases an audit can be expected.

Please contact us and we will be pleased to discuss matters in greater detail.