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Doing Business in France DOING BUSINESS IN FRANCE www.investinfrance.org FOREWORD This guide, Doing Business in France, written by the Invest in France Agency (IFA) in partnership with Deloitte, is intended to be a working reference guide to the business environment in France. It has been designed especially for foreign company directors who would like to invest in France, where more than 20,000 foreign companies are already established, running businesses under many different legal forms. In a fast-changing international environment, where being competitive is more than ever a priority, foreign companies choosing to set up business in France need be able to call upon experts that can offer them real growth opportunities. Working alongside the IFA is the Deloitte group, which has an extensive international presence in more than 150 countries, through which it can provide support to any foreign company in France. With around 15 international service groups based in France and around 10 abroad, Deloitte France is a unique and innovative organization that is fully dedicated to these issues. With its specialist country expertise, Deloitte France can provide assistance with your relocation and development projects in France and provide you with expert views from recognized audit, tax & legal, financial advisory, consulting and accounting experts. Today, France is a preferred destination for companies setting up business in Europe. It is a large economy within the euro zone, is open to foreign investment, and has supportive government policies to produce a well-qualified workforce and stimulate R&D, among other initiatives. France has many key strengths. While perusing the pages of this publication, we invite you to discover for yourself this environment stimulating entrepreneurial spirit, investment and innovation. 3 CONTENTS 1 SETTING UP BUSINESS IN FRANCE SUCCESSFULLY I. Simplified formalities for customized business solutions ........................................................................ 9 II. Legal structures tailored to different needs ............................................................................................... 12 III. Partnerships and takeovers .................................................................................................................................. 12 IV. Corporate real estate to meet various needs ............................................................................................. 15 V. Rules for regulated facilities (ICPEs) ................................................................................................................ 17 2 FRENCH EMPLOYMENT LAW I. Employment relations within a company .......................................................................................................... 22 II. Profit-sharing and employee savings plans ..................................................................................................... 27 III. Organizing working hours: agreement negotiated within the company ....................................... 29 I V. Extensive high-quality social security cover ................................................................................................. 32 3 INTERNATIONAL MOBILITY FOR FOREIGN COMPANY DIRECTORS AND EMPLOYEES I. Admission and residence conditions for foreign nationals in France ............................................... 36 II. Paid employment in France .................................................................................................................................... 37 III. Health cover and social security benefits for employees in France .............................................. 44 I V. Tax regulations for employees in France ....................................................................................................... 45 4 BUSINESS TAXES IN FRANCE I. Corporate tax in line with EU standards ........................................................................................................... 50 II. Ways to repatriate earnings .................................................................................................................................... 53 III. Value added tax and customs duty .................................................................................................................... 54 I V. Local taxes paid by companies............................................................................................................................. 54 V. A wide range of tax incentives for investors .................................................................................................. 58 VI. Special tax system for certain headquarters ............................................................................................... 61 5 GOVERNMENT SUPPORT FOR BUSINESS I. Receiving support for investment and job creation ................................................................................. 64 II. Financing your investment project .................................................................................................................... 66 III. Receiving funding for training and recruitment ........................................................................................ 68 IV. Receiving support for innovation, research and development .......................................................... 69 V. Support for environmental investments ......................................................................................................... 71 APPENDICES Glossary ................................................................................................................................................................................... 74 Useful Contacts .................................................................................................................................................................. 76 The IFA Network ................................................................................................................................................................. 78 International Services Groups (ISGs) ....................................................................................................................... 80 5 DOING BUSINESS IN FRANCE 1 SETTING UP BUSINESS IN FRANCE SUCCESSFULLY I. Simplified formalities for customized business solutions 9 II. Legal structures tailored to different needs 12 III. Partnerships and takeovers 12 IV. Corporate real estate to meet various needs 15 V. Rules for regulated facilities (ICPEs) 17 7 DOING BUSINESS IN FRANCE SETTING UP BUSINESS IN FRANCE 1 SUCCESSFULLY There are no administrative restrictions on foreign investment in France. Whatever your business development strategy, in France you will find an appropriate legal structure for the kind of business you wish to set up. Investors can set up a permanent or temporary structure and enjoy full legal peace of mind; they are then free to drive their project forward in an uncomplicated and inexpensive environment. IN DETAIL SIMPLE STEPS FOR FOREIGN INVESTORS TO FOLLOW: → SIMPLE STATISTICAL OR ADMINISTRATIVE RETURN FORMALITY CASES Return for statistical reasons → Acquisition of 10% or more of the equity or voting rights in a resident company – or when equity or voting rights filed with the Banque de France in the company rise above the 10% threshold, if the amount of these transactions exceeds €15 million. → When new companies are created, if the investment exceeds €1.5 million. Return filed with the Ministry → Transactions (with no minimum amount) that result in the acquisition of all or part of a business line. responsible for the Economy → Acquisition of a direct or indirect equity interest in (or any other transaction with) a French company amounting (Treasury Directorate) to more than one-third of its shares or voting rights (unless the investor already has a majority interest in the French company). → PRIOR AUTHORIZATION IN CERTAIN BUSINESS SECTORS Certain acquisitions in sectors considered to be “sensitive” require prior authorization: • Acquisition of a controlling interest (i.e. majority of voting rights) in a French company and the acquisition of all or part of a business line by a foreign investor. • For investors from countries outside the European Union (EU) and the European Economic Area (EEA), authorization is also required for the acquisition of interests exceeding 33.33% of equity or voting rights in a French company (unless the investor has already been authorized to acquire a controlling interest). Authorization is given by the Ministry responsible for the Economy within two months (tacit agreement to be assumed if no reply is received). INVESTMENTS AFFECTED Sectors REQUIRING PRIOR AUTHORIZATION Certain private security services; interests concerning the prevention of illicit use of biological or toxic agents or other agents prohibited in the construction of chemical weapons; equipment designed to intercept Investments from EU communications; the evaluation and certification of systems used in information technology; the production of Member States goods or provision of services relating to the security of information systems; goods and technology with dual applications. The interests indicated above, plus: gambling (excluding casinos); encryption and decryption systems for digital Investments from non-EU applications; businesses certified for national defense; trade in weapons, munitions and explosives for military countries applications or equipment used in warfare;
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