Setting up a business in France22 October 2009
by Ina Dimireva -- last modified 13 June 2012
In 2005, France adopted the economic initiative law to help small and medium-sized enterprises (SMEs). The main objectives of this law are to ensure the durability of newly created and existing enterprises, improve conditions for passing on and preserving know-how and employment and sustain the growth of SMEs.
The law on economic initiative brings you many benefits, such as simpler administration and lower taxation.
In 2005, France adopted a law to help small and medium-sized businesses (SMEs). The law aims to:
- ensure the long-term success of businesses (new or existing);
- improve conditions for transferring a business and protect jobs and skills;
- support the growth of SMEs.
The spring European Council meeting in 2006 called for the setting up of a one-stop shop as well as a reduction in the time and costs involved in setting up a new business. This has been achieved in France:
- the one-stop shop is the business start-up centre (Centre des formalités des entreprises - CFE);
- the time needed to set up a new business is less than a week;
- the average cost of setting up a new business is €84.
The Services Directive: Points of single contact
The Services Directive is a European law that aims to make life easier for businesses that wish to provide services in the European Union – in their home country or abroad. The Directive defines the rules that apply to entrepreneurs wishing to establish a business or perform temporary services in the EU/EEA area (the 27 EU member states, plus Iceland, Liechtenstein and Norway). It obliges member states to eliminate unnecessary bureaucracy, simplify formalities for businesses and make public administrations more efficient.
For the implementation of the Directive, each member state had to set up ‘Points of Single Contact (PSC)’, e-government portals which help businesses complete their administrative procedures on-line. The PSCs provide comprehensive information on all administrative matters related to setting up or expanding a services business in a given country. This includes for example:
- Which licences, notifications or permits do I need to obtain to start a business (at home or abroad)?
- What do I need to do when I want to offer my services abroad on a temporary basis?
- What do I need to do to apply for a licence? Which authority is responsible?
- Are the licences subject to a fee? What kinds of deadlines apply?
- Which acts and decrees apply in my sector?
- What do I need to do to establish, for instance, a restaurant or a shop? Or to work as a tour operator in another country without actually setting up a company?
- Where can I turn for personalised advice and further information?
With the PSCs, you no longer need to approach various authorities one by one!! The PSC allows you to find all relevant information and to send in your online applications to the responsible authority through one single contact point, the PSC. You can complete your administrative formalities electronically through the PSC. Just contact the PSC of the country that you want to do business in.
All PSCs are part of the European EUGO network ; through a central website you can easily access all PSCs in Europe. Of course, the services of the PSCs are optional. You may always address yourself directly to the relevant authorities, too.
Legal forms of businesses
You can choose between two kinds of legal structure: a sole trader (entreprise individuelle - EI) and a company (société). All businesses must have a legal form as well, all of which are listed below:
- limited liability company (SARL);
- single owner limited liability company (EURL);
- public limited company (SA);
- simplified joint stock company (SAS);
- general partnership (SNC).
Business sectors and related rules
The law governs independent professions which must comply with strict ethical rules and are subject to inspections by their professional bodies (order, chamber, union).
Business plans and evaluation
To successfully set up your new business, you must:
- conduct a market study;
- make budget forecasts;
- draw up a financial plan;
- look for finance;
- choose your legal status;
- carry out business registration formalities.
To succeed, a new business needs a sound commercial strategy and secure financing.
Some standard requirements to be completed when setting up a business are the same as when opening a branch.
Registering a business
Your first port of call is the business start-up centre (Centre de formalités des entreprises - CFE) relevant to your business activity (market-oriented business, artisanal, agricultural or independent professional).
The CFE centralises the registration documents and sends them to the relevant bodies and departments (National Institute of Statistics and Economic Studies (INSEE), tax departments, welfare departments, commercial court registrar, job directory and the various bodies for social funds). These formalities can be done online.
However, some formalities are not dealt with by the CFE, so you need to do the following:
- take out insurance covering your business's professional liability;
- join an ARRCO or AGIRC employee retirement fund;
- draw up the company's articles of association and file them at the tax centre;
- publish a notice of establishment in a legal notice publication.
Source: Your Europe