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.
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:
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!
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 advantages of entering the French market include the following:
Some challenges of entering the French market include the following:
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:
Main characteristics of a Branch: