Doing business in France

Setting up a business in France

In principle, there are no administrative restrictions on foreign investment for doing business 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. The following booklet is a mine of useful and practical to help you setting up a business in France successfully with updated information.

Guide to incoming talents in France

France is an attractive destination for foreign investors, company founders, company directors and employees. Recent government measures resolutely focused on openness are making France a destination of choice for them.

Companies in France can offer their employees optimum working conditions – due to a highly effective social security system and a vast array of bilateral social security agreements – while the costs of sending employees to work in France can be offset through one of the most attractive expatriate tax systems in Europe.

The Welcome to France website has been designed to take them through the key stages of moving to France, and includes a personalized guide that can be compiled and completed online.

Support for doing business in France

Government support for investment projects

France has a wide and varied framework of support in response to the needs of investors. This support depends on the type of investment project (physical investment, research, and development, innovation, training, etc.), its location (priority development areas or non-priority areas), and the type of company conducting the project (large enterprise, mid-size company or SME).

Available support and grants

France is a fertile ground for businesses and is much more attractive than the pervasive declinist rhetoric would suggest. Contrary to popular misconceptions, France has many advantages over its European neighbors and offers a range of often little-known support schemes. Against this favorable backdrop, France offers a wide range of help and support schemes to lower labor costs and taxes.

The following document describes the types of support likely to be available, and their eligibility requirements in the order in which they might best address issues encountered by investors:

• What support is there for my investment project in France?
• What benefits are available for R&D?
• How can I lower labor costs?

The French tax system

The 2018 French Government Budget Act passed in late 2017 is a key part the reform agenda of President Macron. It is designed to help companies recruit and invest, as well as increasing the spending power of employees, the lifeblood of the French economy. To do so, a gradual reduction of the corporate tax rate from 33% to 25% in 2022 has been approved by parliament, while capital income is now taxed at a flat rate of 30%.

Now that France has created a more favorable business environment, it is essential for investors to understand the following points:

• How to structure the investments they plan to make in France and what tax system they will be subject to.
• The tax system, preferential systems and other taxes in France.
• How to restructure, repatriate and secure their investments in France.
• The upcoming reforms.

Tax4Business

A dedicated helpdesk has been set up within the French tax administration (DGFiP) to guide, assist and inform foreign investors about the taxation of their planned investments. Tax4Business seeks to eliminate uncertainties regarding the taxes applicable and provides investors with information about specific provisions, in the form of a written statement.

Labor legislation in France

President Macron has kicked off a series of reforms aimed at profoundly transforming France’s business model and, more broadly, the country itself.

In this context, various changes have been made to the French Labor Code with the aim of simplifying labor relations and increasing businesses’ organizational flexibility.

Negotiated company-specific agreements now take precedence over industry-wide agreements in many areas, enabling businesses to adapt labor relations standards to their own needs (e.g. negotiation and adjustment of working time).

The social transformation plan

Transforming employment law, rethinking apprenticeships, enhancing professional development, overhauling unemployment insurance benefit, undertaking pension reform, and improving purchasing power are the six pillars that will fundamentally reform France’s social model over the coming 18 months.

The PACTE 

The Business Growth and Transformation Action Plan (PACTE) addresses SMEs by pursuing several objectives:

• Free companies from complex rules by helping them clear the way, making it easier to start a business and reducing the number of workforce thresholds.
• Create better-financed and more innovative companies, by making it easier to find diversified financing (IPOs, private equity, crowdfunding and ICOs). It will also channel private savings towards companies’s equity to finance innovation and growth.
• Foster fairer companies by amending the Civil code to reflect their expanded social and environmental role and allow them to develop a corporate rationale.

The big investment plan 2018-2022

The Government has embarked on a Big Investment Plan worth €57 billion, which will be implemented throughout the current five-year term to support structural reforms and respond to four major challenges facing France:

• €20 billion for to accelerate the ecological transition
• €19 billion to train and assist 2 million low skilled people in finding a job, and fund experiments in national education and support changes at undergraduate level
• €9 billion for strengthening innovation and competitiveness
• €9 billion to build the digital State