Foreign companies entering the French market are set to play in one of the major global economies. With a USD 2.77 trillion Nominal GDP in 2022 (USD 700,000 million average per quarter in 2022), France’s economy ranks 3rd in Europe and 7th worldwide (behind the US, China, Japan, Germany, India and the UK). France has a widely diversified free market economy, with agriculture, chemicals, tourism, and the service industry among its leading sectors. France comprises around 30% of all the agricultural land among fellow European Union (EU) members. It is the world’s sixth-largest producer and second-largest agricultural product exporter to the US.

Apart from its economic strength, France is a significant player in world affairs. A founder member of the United Nations in 1945 and of the EU, France belongs to more governmental and non-governmental organisations than any other country. These include the Organisation for Economic Development and Cooperation, the World Trade Organisation, the G-20, G-7, and the Council of Europe. The highly developed French roads and rail system links with over 30 international airports, and France has ports on its Atlantic, Mediterranean and North Sea coastlines. The ‘Hexagone‘ has frontiers with Belgium, Luxembourg, Germany, Switzerland, Italy, Monaco, Andorra, Spain, and the UK via the Channel Tunnel.

Starting a business in France

Foreign companies entering the French market usually choose to establish an entity in France and opt for either a limited liability company, ‘Société à responsabilité limitée‘ (SARL), or a private limited liability company, ‘Société d’exercice libéral à Responsabilité Limitée‘ (SELARL). Other less popular options are opening a branch (Branche) or a representative office (Bureau de Liaison).

The subsidiary operates as a legal entity in France independently of the foreign parent company, and incorporation follows the regulations of the French Companies Code. The subsidiary is incorporated as a local company, and its registration must be published in the Official Gazette with all necessary documents filed at the Centre de Formalités des Enterprises (CFE).

Here is the process to follow when trying to establish an entity in France: 

  • Check that the company name is not already trademarked with the French Patent and Trademark Office (Institut National de la Propriété Industrielle, INPI) or check on this website: www.icimarques.com
  • Submit the incorporation application to the Centre for Administrative Procedures (CFE), which then liaises with other relevant authorities and agencies and checks applications.
  • Company documents must be stamped at the Commercial Court.
  • Obtain the Certificate of Incorporation, ‘Extrait Kbis’.
  • The subsidiary must have a resident registered agent and a registered address for official correspondence.
  • Only one director is required, between one and 50 shareholders, and fewer than 25 removes the need for annual general meetings.
  • File all shareholders on the National Register (Institut National de la Propriété Industrielle, INPI).
  • The minimum share capital of EUR 1.00 must be deposited in a French corporate bank account.
  • Register with the Ministry of Economy and Finance for taxation purposes.
  • Register employees with their local tax office, Service des Impôts des Particuliers.
  • Register with the Agence Centrale des Organismes de Sécurité Sociale (ACOSS) so employees are covered by the social security system and the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales (URSSAF), which oversees social security deductions.
  • All documents must be written or translated into French to be legally valid.

There is an alternative route, though. Work alongside our Professional Employer Organisation (PEO) recruitment specialists and our Employer of Record (EOR) in-country experts to open the door to a hassle-free route into the French market. With an Employer of Record as the legal employer of your workforce in France, no need for you to establish an entity or subsidiary in France to run your business there. Our EOR solution also guarantees 100% compliance with French regulations!

Expanding your business into France

When entering the French market, you may want to reflect on some crucial questions, such as where to set up your offices and how and where to find distributors or manufacturers. Opening a business in any overseas territory can be challenging. Moving staff worldwide also means lengthy processes to obtain visas and work permits. Then, when employees are in place, who will handle payroll? How will your company deal with regulations on taxation, entitlements and benefits, termination, and severance?

Drawing up an expansion blueprint is not enough; your business plan must answer all these questions. By partnering with a PEO and EOR such as Bradford Jacobs, companies can plot a time-efficient and cost-effective path to locating and employing staff in France. But for those who want to ‘go it alone’, here are some of the necessary steps.

Some French Facts

  • Capital – Paris.
  • Population – 68.05 million (December 2022).
  • Main Cities – Paris, Marseille, Lyon, Toulouse, Nice, Nantes, Strasbourg, Montpellier, Bordeaux and Lille.
  • Official language – French.
  • GDP and world ranking – USD 2.77 trillion; 7th worldwide (2022).
  • Leading sectors – Services 70.16% – Industry 16.78% – Agriculture 1.63% (2021).
  • Main Industries – Machinery, chemicals, automobiles, metallurgy, aircraft, electronics, textiles, food processing, and tourism. 
  • Main exports – Aircraft, vehicles, pharmaceutical products, food products (wine), hydrocarbons and electronic components – Total exports: USD 584.77 billion (2021)
  • Main imports – Cars, refined petroleum oils, mobile phones and computers – Total imports: USD 714.1 (2021)
  • Main trading partners – Exports partners: Germany, Italy, Belgium, Spain and the United States of America (44.9% of total exports of France in 2021). Import partners: Germany (16%), China (9%), Italy (8%), Belgium (7%), the US (6%), Spain (6%), the UK (5%) and the Netherlands (5%).
  • Government – Unitary semi-presidential republic.
  • Currency – Euro (EUR).

Advantages and Challenges when entering the French Market

Some advantages of entering the French market include the following:

  • Corporate Tax: Under the 2020 and 2021 Finance Bills provisions, the French CIT rate continues its reduction trajectory.
    The rate was cut to 25% in 2022. For financial years opened as of 1 January 2021, the reduced CIT rate of 15% that applies for small corporations on their first EUR 38,120 of taxable profits (according to the French Tax Law definition) is extended to the corporations realising a turnover up to EUR 10 million (compared to EUR 7.63 million for financial years opened before 1 January 2021).
  • Politics: France is a politically stable republic.
  • Economic Attitude: Major global economic power that welcomes foreign investment to an open market with tax and incentive opportunities.
  • Logistics: Highly developed Road and rail system, over 30 international airports and coastlines on the Atlantic Ocean, the Mediterranean Sea and the North Sea.
  • Trade Links: Direct trading access to Europe and its fellow European Union members.
  • Ease of Business: The World Bank rated France 32nd out of 190 nations in 2020 in its last ‘Ease of Doing Business’ report. 

Some challenges of entering the French market include the following:

  • Complex labour laws.
  • High employment costs.
  • Language barrier as French is generally expected to be used in the business environment.
  • Complex and time-consuming tax processing.
  • Limited Company / Subsidiary or Branch set up in France.

    A subsidiary established in France is a separate legal entity from the parent company, with independent management and can have a different company name and follow its own business activities. The subsidiary can use this freedom to explore markets and build credibility throughout France and Europe. A branch is an extension of the parent company and is not considered a separate legal entity.

    Main characteristics of a Subsidiary:

  • It is a completely independent legal entity from the parent company.
  • The shareholders’ liability is only limited to the value of their share investment.
  • In France, only one shareholder or director is required. Shareholders do not need to be French or reside in France.
  • There is a minimum requirement of one Euro in share capital.
  • The subsidiary must file annual tax and VAT returns and register its officers with the National Register.

    Main characteristics of a Branch:

  • Branches are seen as a legal extension of the parent company.
  • The parent company is responsible for its activities, obligations, and liabilities.
  • Operates under the same name as the parent company and carries out the same business activities.
  • Local officers and representatives can be jointly and severally liable for tax debts.
  • Unlike a subsidiary, the parent company’s financial statements must be lodged with the Companies Registry.


For more information, download our free guide or get in touch with our consultants here