France Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into France generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Visas and Work Permits for France

Companies targeting France for the next step of their global expansion face unravelling the red tape surrounding Visas and Work Permits for France if they intend to move existing staff into their new territory. French visa, residency or work permits regulations require expert guidance as they vary according to the country foreign nationals live in – the European Union, the European Economic Area, and other foreign nationals are all affected by these complex regulations.

Organising documentation, coupled with migrating staff across the world, needs a designated in-house department. Few companies have the time, the resources or want to invest in such an operation. Bradford Jacobs does have the resources to sidestep all these issues. As an international payroll provider, we ensure all your employees comply with work permit and visa regulations with our Employer of Record (EOR) solution.

There is an alternative. We can also recruit staff in France through our Professional Employer Organisation (PEO) networks without requiring visas or work permits. The result? Your company is running within days rather than weeks or even months.

The different types of Visas and Work Permits for France

When travelling abroad for work, business or pleasure, most people need either an entry visa or work visa, work or residence permit depending on the country they are going to and which country they are travelling from. In France, the process is highly complicated, and although information is readily available, the procedures can be tricky for the uninitiated and professional advice will be a boon!

France is a member of the European Union (EU) and the European Economic Association (EEA), and these nations’ citizens have ‘free movement’ within this area, alongside the Economic Free Trade Association (EFTA) countries and do not require an entry visa, work, or residence permit.

However, they will need the following:

A valid national ID card or
A valid passport
Plus – they need to be qualified for any job they apply for with appropriate documentation.

After three months in France, they must register with their local town hall or municipality, where they can apply for a residence permit if desired.

As well as the countries mentioned above, other Third Country nationals can enter France (a member of the Schengen area) without a visa for up to 90 days in any 180-day period and are on the visa-exempt list. Check this link for those who require a visa: https://www.schengenvisainfo.com/who-needs-schengen-visa/

Those not on the exempt list will need a Type C Schengen Visa also known as a Short-Stay Visa, or Uniform Stay Visa which allows them to:

Visit family
For holiday and cultural reasons
For training, business meetings and internships
For paid work under certain circumstances (e.g., for less than 90 days)

This visa does not permit citizens to bring their families or settle in France. They can apply for single or multiple entries. People not in the EU, EEA or EFTA also require ‘permission to work’, a Short-Stay Visa, and a short fixed-term contract.

To work for less than 90 days: A Temporary Work Permit (ATP, autorisation provisoire de travail) applied for by the employer from the French Labour Ministry.

To work for more than 90 days: Prospective employees require a Work Permit for longer stays and longer periods of employment. These permits can be:

Long Stay Visa (VLS-TS)

Visa de long séjour valant titre de séjour (VLS-TS) allows the holder to live and work in France for one year when validated by l’Office Francais de l’Immigration et de I’Integration (OFII). This can be used as a Residence Permit and serves as a Work Permit.

The Talent Passport Permit

‘Salarie qualifie’: For highly skilled and qualified workers with:

A degree and/or up to five years of equivalent professional experience.
A work contract for one year with income over twice the minimum wage.

‘Enterprise Innovante’

A work contract for one year with income over twice the minimum wage.
The job is related to the company’s research and development strategy.

‘EU Blue Card’

A work contract for a one-year minimum.
A degree or three-year educational diploma or up to five years of equivalent professional experience.
Salary agreed at 1.5 times the average French gross salary.

Specific Work Permit

Suppose the foreign national does not possess a Visa or Residence Permit or qualify for the Talent Passport Permit. In that case, the employer applies for a ‘specific work permit’ to be submitted at least three months before the employee is due to start. The contract can be fixed or permanent. After receiving the work permit, the employee must apply for an entry visa and residence permit.

Temporary Worker Permit marked ‘Employee’

This allows salaried employment for those who do not qualify for the Talent Passport or other Long-Stay Visas but will need the following:

A fixed-term work contract.
The employer will need to apply for a Work Permit, and acceptance will depend on the regional employment levels, i.e., “opposability of employment status”.

How to Obtain Visas and Work Permits for France

European Union (EU), European Economic Association (EEA) and Swiss nationals do not require a Residence Permit, Visas or Work permits for France.

Third Country nationals who are not on the visa-exempt list and whose employment will be for less than three months need to obtain the following:

Employment contract.
A Short-Stay Visa – this can be obtained from a French Consulate or Embassy in the country of residence and started online. This link helps to determine whether a visa is required and the steps involved. https://france-visas.gouv.fr/en_US/web/france-visas/short-stay-visa
A Temporary Work Permit applied for by the employer from the French Labour Ministry.

For longer periods of employment and residence in France, a Work Contract that needs to be authorised by the *DIRECCTE, a Work Permit, a Visa to enter France, and a Residence permit are all required to live and work for up to a year. Depending on the occupation and salary, the qualifications and educational documents will determine the necessary paperwork.

* DIRECCTE – the French Regional Department of Enterprise, Competition, Consumer Affairs, Labour and Employment

A Long-Stay Visa (D-Visa) for more than 90 days and up to one year. This is equivalent to a Residence Permit and also serves as a Work Permit and is called a Visa de long séjour Valant titre de séjour VLS-TS and can give up to one year’s residence without having to apply for the Carte de séjour, (long-term resident permit that allows a family to reside in France). Including VLS-TS ‘Employee’ for foreign citizens employed with a contract longer than one year.

Salaried Employees Visa: Applicants must have a work contract (fixed or permanent) authorized by the DIRECCTE for up to 12 months. Also, the employer must obtain permission to employ foreign Third Country nationals.

Talent Passport Permits – Highly qualified and skilled workers with high-level qualifications, a contract of one year or more with up to 1.5 times the national gross average salary. Includes the EU Blue Card.

The VLS-TS Long-Stay Visas are equivalent to Residence Permits and also serve as Work Permits.

How to Apply for French Visas and Work Permits

The process of living and working in France is as follows:

Find a job
Examine the type of visa and work permit required
The employer applies for a relevant work permit through the local employment office (DIRECCTE) where the employee will work. Some Long-Stay Visas, such as VLS-TS / Talent Passport Permits, can be used as Residence and Work Permits.
After receiving the work permit, a Long-Stay Visa needs to be applied for, which acts as both Visa and Residence Permit.
When arriving in France, contact the L’Office Francais de l’Immigration et de I’Integration(OFII) with a completed OFII form. They endorse the passport with a sticker to show the employee is legal in France.

Work Permits

It allows the employees to apply for Work Visas and Residence Permits to work in France. The employer has to apply for the Work Permit (excluding, e.g., VLS-TS / Talent Passport Permits) three months before the employee is due to arrive. From April 2021, applications should be through the dedicated portal:

https://administration-etrangers-en-france.interieur.gouv.fr/particuliers/

When the application is sanctioned, it goes to the OFII. Once agreed upon, the employer is notified, and it will then be sent to the Embassy or Consulate where the application originated. This allows the employee to apply for a Long-Stay Visa.

Documents required for Work Permit:

Letter explaining employee’s job description and duties and reason for enrolment.
Application for work permit Cerfa no. 15187*1 when the employee is outside France.
Recent extract of the commercial register.
Proof up to date with social security payments.
A proof that the employer tried to fill the position in France.
Copy of a valid passport of the employee.
Proof of residence in the home country.
When necessary, a copy of the employee’s qualifications relevant to the position.
Employee’s CV with evidence of skill for the position.

For companies outside France, other documentation is required. All relevant documents must be sent by the employer to French Immigration Office (OFII) to be approved.

A VLS-TS Long-Stay Visa

It is the equivalent of a Residence Permit. And can serve as a Work Permit in some cases. It is applied for at a local French Embassy/Consulate where the prospective employee is a resident. The process can be started online via the French website at:

https://france-visas.gouv.fr/en_US/web/france-visas

An interview may be needed in person for the necessary biometrics. An external service provider can be utilized to help with the visa process.

Documents required:

Application form for Long-Stay Visa, Form 14571-05 for a salaried employee, can be completed online visa France-visas.
Valid Passport issued within the previous ten years and valid until three months after the employee’s expected departure.
Two passport photographs.
Submit an OFII Form.

Other paperwork will depend on which Long Stay Visa is being applied for.

When arriving in France, a notice will be attached to the passport. Within three months, the holder must register with the OFII to authorise the Residence Permit.

Tax Laws in France

Global expansion is a great way to grow your business, and France offers many appealing opportunities. However, tax in France can be complex and require time-consuming research. When using our PEO services, we take care of the complicated legwork so that you can focus on your business goals in France.

With over 20 years of experience in the front rank of international payroll providers, Bradford Jacobs ensures our clients comply with every level of tax and employment law worldwide. Our ‘know-how’ is vital for foreign companies expanding into France. Dealing with tax, payroll, and employment regulations for your staff from overseas is a tricky process. It poses major issues for companies seeking to develop their international profile. France is no exception, with fines, sanctions and other penalties applying for not complying with the complex and many-layered aspects of taxation.

Our guide unravels the ‘red tape’ and highlights how Bradford Jacobs will assist your company with untying the knots.

Overview of Tax in France

Personal Income Tax (PIT)

11% – 45%, plus percentage surcharges for high incomes.

Corporate Income Tax

Corporation Tax was reduced to 25% in 2022. The Finance Bill of 2018 charted a steady decrease in Corporate Income Tax (CIT) from 33.33% (28% on the first €500,000, US$590,000) in 2018 down to 31% in 2019 and 28% in 2020. Additional to standard CIT, businesses must also make a social contribution, assessed at 3.3% of CIT due. Businesses with turnover below €7.63 million (US$9 million) are exempt. Companies must also make a solidarity contribution of 0.13% of net turnover.

Value Added Tax (VAT)

The standard VAT rate is 20%, with 2.1%, 5.55% or 10% applying to other categories. There is no minimum threshold for registering. Customs and excise duties are payable on all goods imported from outside the European Union.

Capital Gains Tax

French residents are subject to capital gains tax at 19% in addition to social charges of 17.2%. These are tied to capital gains levels, which for-profit over €250,000 (US$294,240) can create total deductions of 42.2%.

Dividend Income

These are either taxed at a fixed rate of 12.8% or in line with general tax rates after deducting 40% to compensate for company tax already paid on distributed profits. Capital income also attracts social contributions of 17.2%.

Withholding Tax

Dividends paid to non-resident individuals or companies attract a 30% withholding tax, which can be increased to 75% for ‘non-cooperative’ territories regarding their money laundering policies.

Property Tax

3% paid by foreign and French companies on property owned directly or indirectly.

Wage Withholding Taxes

50% (average) of gross pay for employers and 20% average for employees.

Individual taxes may apply to Investments, inheritance, property, and wealth.

Permitted Deductions

Social insurance contributions, including any paid in-home country under EU jurisdiction
10% of professional expenses (capped)
Alimony, child support for minors not part of the financial household and parental support

Personal Income Tax in France

French residents pay taxes on their worldwide income, including employment earnings, pensions, property, interest, dividends, and other investments, as follows:

EUR 0 – EUR 10,084 (USD 10,904): 0%
EUR 10,085 – EUR 25,710 (USD 27,586): 11%
EUR 25,711 – EUR 73,516 (USD 79,496): 30%
EUR 73,517 – EUR 158,222 (USD 171,065): 41%
From EUR 158,223: 45%

Individual Tax Rules in France

Liability to pay French income taxes generally depends on residency. Article 4B of the Code Général des Impôts (CGI) states that an individual living in France for 183 days in a calendar year is a tax resident. This will apply even if businesses are in other countries where fewer days are spent. Tax residency in France depends on where most time is spent, not where most income is earned.

The tax year runs from January 1 until December 31, with returns due by mid-May on specific dates from the authorities, usually specified in March or April. French residents are taxed on worldwide income. Non-residents are taxed only on French income, with tax due for the first year generally not paid until September 15 of the following year, at 20% up to €27,519 (US$29,752 and 30% above that.

A Pay-As-You-Earn (PAYE) system has been applied in France since 2019, meaning individuals are taxed at the source instead of having to declare the previous year’s income.

Tax rules also apply to employers running payroll for individual employees. Employers must obtain the individual’s tax number by applying with Form 2043 to the Ministry of Economy and Finance and registering with the Tax Administration and the social insurance authorities. They must also report regular and overtime working hours relating to salary, tax-exempt elements on the monthly pay slip, and withholding tax and social security deductions.

France belongs to the Automatic Exchange of Information (AEOI), which combats tax evasion by requiring financial intermediaries to declare their clients’ tax residences in signatory countries.

Employer’s Social Insurance and Statutory Contributions in France

Employers’ statutory costs include percentages based on employees’ salaries to various social insurance funds. These are administered by The Ministry for Solidarity and Health and the Ministry of Economy and Finance. It covers benefits for all salaried workers in the private sector through a network of national, regional, and local institutions and consultation with employers and employees. Around 80% of revenue comes from contributions and taxes calculated on percentage rates from employers and employees.

These are calculated on total earnings, as follows:

Category	Employer	Capped Monthly
Health, maternity, disability, death	13% or 7&	–
Autonomy solidarity contribution	0.3%	–
Old-age insurance (with upper limit)	8.55%	EUR 3,428 (USD 4,044)
Old-age insurance	1.90%	–
Workplace accidents	(variable)	–
Family Benefits	5.25% or 3.45%	–
Unemployment	4.05%	EUR 13,712 (USD 16,176)
Unemployment wage guarantee (AGS)	0.15%	EUR 13,712 (USD 16,176)
Supplementary pension (bracket 1)	4.72%	EUR 3,428 (USD 4,044)
Supplementary pension (bracket 2*)	12.95%	–

*Bracket 2 applies between €3,428 (US$4,044) and €27,424 (US$32,353)

Subsidiary Entity Set Up in France

Launching a subsidiary overseas takes time and eats up funds – and the venture has no guarantee of success. Foreign companies moving into the French economy typically choose a limited liability company, Société a Responsabilité Limitée (SARL), or a private limited liability company, Société a Responsabilité Limitée (SELARL). The branch (Branche) or representative office (Bureau de Liaison) are other less popular options.

The subsidiary is a legal entity in France, entirely independent of the foreign parent company, and incorporation follows the regulations of the French Companies Code. It 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. Once the subsidiary is legally established, other crucial factors must be dealt with. Tax processing, filing accounts, legal compliance, workforce management, payroll, and recruitment add to a hefty workload.

You can lighten the burden by teaming up with Bradford Jacobs. Our Professional Employer Organisation (PEO) and Employer of Record (EOR) solutions help you locate the finest local talent and administer your payroll in France – expertly, speedily, and risk-free. Instead of the costs, delays, and complications of going solo, use our services and be up-and-running with a presence in your new territory within days rather than months.

How to Set Up a French Subsidiary?

The main company types in France are:

Limited Liability Company (Société a Responsabilité Limitée, SARL)
Private Limited Liability Company (Société d’exercice libéral à responsabilité limitée, SELARL)
Single Person Limited Liability Company (Enterprise Unipersonelle à Responsabilité Limitée, EURL)
Public Limited Company (Société Anonyme)
Simplified Joint Stock Corporation (Société par actions simplifiée)
French Sole Proprietorship (Enterprise Individuella)
Commercial Partnership (Société et norm collectif)

When entering the French market, and to set up an entity in France, you will have to follow the process below:

Decide on the company type that suits your business’s nature and goals. The most common choices for a foreign business to establish its subsidiary in France are the limited liability company, Société a Responsabilité Limitée (SARL), or a private limited liability company, Société a Responsabilité Limitée (SARL). Other options include a branch (Branche) or representative office (Bureau de Liaison).
Check the proposed subsidiary name is unique with the French Patent and Trademark Office.
Draft and notarize the Articles of Association, including reasons for setting up the company, manager’s responsibilities, and office address.
Registration must be published in the Official Gazette with all necessary documents filed at the Centre de Formalités des Enterprises.
Obtain Certificate of Incorporation, ‘Extrait de Kbis’.
Company documents must be stamped at the Commercial Court.
The SARL must have a resident registered agent and a registered address for official correspondence.
Only one director is required; between one and 50 shareholders, 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 one Euro must be deposited in a French corporate bank account.

Once the subsidiary is registered and before operating payroll for staff, these steps apply:

Apply with Form 2043 to the Ministry of Economy and Finance for employees’ for individual tax numbers.
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 five funds of the social security system and the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales, (URSSAF), which handles social security deductions.

Benefits of Setting Up a French Subsidiary

France has many attractions as a prime target for international expansion. Companies establishing a subsidiary will enter one of the world’s most potent and diverse economies and the European Union. Nearly 30,000 companies in France have foreign capital, employing over 10% of the workforce.

The parent company is in an ideal location to explore further expansion by establishing a subsidiary. France has borders with eight nations and coastlines facing the Atlantic Ocean, Mediterranean Sea and North Sea. The economy includes massive industrial and agricultural sectors. At the same time, Paris is the European Union’s leading financial centre and ranks above London and New York as cities home to the most Top 500 businesses.

Benefits of setting up a subsidiary include:

The subsidiary is a separate legal entity from the parent company.
The subsidiary can operate under its own business name and pursue independent business activities once it has obtained relevant licences.
The subsidiary has the same legal standing as local companies and can be eligible for French Government tax incentives and benefits.
Companies operating a limited liability subsidiary are not liable for specific share capital requirements other than issuing a minimum of one Euro.
The parent company is not liable for the obligations and debts of the subsidiary.

Subsidiary Laws in France

Companies expanding into France will typically set up either a limited liability company Société a Responsabilité Limitée (SARL) or a private limited liability company, Société a Responsabilité Limitée (SELARL). They must meet requirements under the Commercial, Civil, Monetary and Financial Codes.

Registration and Documentation:

A limited liability company must have at least one director and between one and 50 shareholders, and they must be named in the National Register (Institut National de la Propriété Industrielle, INPI).
All companies in France must register with the Registry of Commerce and Companies.
Certificate of Incorporation, ‘extrait de Kbis’.
Registration must be published in the Official Gazette with all necessary documents filed at the Centre de Formalités des Enterprises.
All commercial documents must be stamped at the Commercial Court.
Notarized Articles of Association of the parent company must be supplied, giving reasons for setting up the subsidiary and proposed business activities.
You must obtain a Tax Registration Certificate.
You must register a representative and office address.

Accounts and Taxation:

Entities were subject to 25% Corporate Income Tax in 2022.
File CIT returns by April 15 of the following year.
Register with the Tax Administration and Ministry of Economy and Finance.
Register for Value Added Tax with the Service des Impôts des Entreprises (CGI) within two weeks of starting trading.
Dividend income is taxed at 12.8% or general tax rates after deducting 40% for company tax already paid.
A withholding Tax of 30% is applied to dividends paid to non-resident individuals or companies.

Management:

Annual general meetings are not required if there are fewer than 25 shareholders.
Company directors who are residents of the European Union, European Economic Area nations or Switzerland can operate as directors on the same basis as French residents. Others must apply for a residence permit.

Entering the French Market

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).

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.

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.

French Employment Contracts

Employment Contracts in France

There are a variety of contract types in France. The main types are:

Open-ended, indefinite employment contract (Contrat à durée indéterminée – CDI): This is the most common form of contract, giving full-time employees the security of long-term work with an agreement that is by definition indefinite. Permanent contracts are, by default, full-time. They can be terminated either by the employee resigning, by the employer dismissing them with just cause or economic reasons or by mutual agreement. The employee need not give a specific reason for resigning but must give notice and continue to work as per their contract unless mutually agreed otherwise.

Fixed-term employment contract (Contrat à durée déterminée – CDD): The Labour Code allows these only under specific circumstances. These include:

Replacing a full-time employee temporarily absent from work for such as illness or injury, maternity or paternity leave, attending a training course or retirement. The end date of the contract should be given with the justification for the CDD
Increase in business activity due to demand
Seasonal work
Maximum contracted duration between three and 24 months or up to 36 months for ‘specific purpose’ or a ‘senior’ CDD for staff over 57 years old
A CDD can be renewed only twice, making a total of three CDDs
Failure to meet requirements for a CDD can see it automatically become a CDI

Trial Period Contracts: Both CDIs and CDDs can begin with a trial or probationary period, usually varying between three and six months as contractually agreed.

Temporary / Agency Contracts: Similar to CDD but involving agency as the third party; usual maximum of 18 months with employee due end-of-contract 10% bonus of total gross salary. The employee is hired and paid by the agency.

Part-time Employment Contract: This can be a CDI or CDD for employees working fewer than 35 hours a week and not more than 1,607 annually. Part-time contracts must be in writing and include job title, remuneration, monthly or weekly payments and overtime limits.

Youth Employment Contracts: They include:

The three-year Apprenticeship Contract for 16-25 year-olds towards obtaining a professional qualification, paid at between 28% and 78% of the national minimum wage depending on age and year of apprenticeship
The professional training contract for unqualified 16-25 year-olds or those aged over 26 years needing professional training, for six to 21 months at between 55% and 85% of the national minimum wage

Collective Agreements in France

Individual employers, employer federations, trade unions and employer organizations are part of Collective Bargaining Agreements (CBAs) that lay the framework of employment terms and conditions for employees. They generally cover specific sectors or industries.

Foreign companies who do not have a legal entity in France, but employ staff who are registered with social insurance and tax authorities, must still adhere to applicable collective agreements. Failure to comply risks fines and other sanctions that will compromise your business activity.

Compliance is mandatory if the agreement has been applied to the sector by the Ministry of Labour, or if the company is part of an employers’ organization that signed the agreement.

Collective agreements are binding on employers, regardless of the employer being a member of the organization that drew up the agreement or whether the employee is a union member. However, collective agreements can provide extra benefits not covered by employment law, affecting such as salary increases, extra holiday benefits, paid sick leave and minimum wages.

There are more than 300 collective agreements in France, which are also known as national collective agreements (Conventions Collectives Nationales, CCN). Collective agreements generally enhance the minimum requirements of the French Labour Code and in some cases introduce guarantees that are not covered by the Code. These agreements cover more than 90% of the workforce.

Employee Benefits in France

Happy and satisfied employees make your business thrive and lead to even better profits. However, the specifics of employee benefits in France might not all be familiar to you yet. When expanding your company’s presence in a new country, you must ensure compliance with your employment contracts and benefit guarantees.

These involve social security contributions, sick leave, health insurance, and unemployment, to name a few. In France, benefits can be guaranteed by labour law, national legislation, and collective agreements with trade unions or workers’ councils. Our guide will explain what benefits and employee compensation are guaranteed and what can be modified for any employer who wishes to expand their business into France.

What are the Compensation Laws in France?

Collective and trade union agreements ensure that employees are treated equally in their respective industries and economic sectors. In France, there are around 300 collective agreements covering over 90% of the workforce, and they supplement minimums stipulated by the Labour Code. Compensation laws generally apply to holidays, sick leave, maternity benefits, minimum wages and more. Agreements cannot undercut minimum compensation levels laid down by national laws where they apply. These include:

Social Insurance: Social insurance in France is organized by national, regional, and local institutions supervised by the Ministry for Solidarity and Health and the Ministry of Economy and Finance.

Around 80% of the general scheme’s total revenue derives from social security contributions and taxes employers and employees pay. Mandatory withholdings for social security include the General Social Contribution (CSG) and the Social Debt Repayment Contribution (CRDS), which deduct tax from income earnings, property, investments, and gambling. Foreign tax residents must also pay into the social security system to be eligible for certain benefits, including healthcare, maternity and paternity allowances, sickness benefits and supplementary pension schemes.

Redundancy, Termination, Severance: Dismissals, terminating contracts and redundancies in France are regulated to protect the employee. In France, there is no such thing as a ‘summary dismissal’ or being ‘sacked on the spot’. The French Labour Code dictates that the employer must have a ‘justifiable cause’ for termination and follow the proscribed procedures. Redundancy for employees or groups of employees can be justified for economic, technological, or business reasons. Under the French Labour Code, these reasons must be verifiable as not relating directly to the employees.

Severance pay is 25% of the month’s salary for each year up to 10 years of employment and 33% for each month’s salary over ten years of service. Notice is one month between six months and two years of service and two months for more than two years of service. Notice periods are generally governed by the French Labor Code and collective agreements, particularly regarding fewer than six months of employment.

Working Hours and Breaks: Working hours should not exceed 35 per week or 44 on average over 12 weeks. The ‘office day’ is often from 8 or 9 am until 12/12.30, then 2/2.30 to 6 pm. The Labour Code stipulates that weekly working hours over 35, or 1,607 annually, are overtime. Employees receive a minimum 20 minutes’ break after six hours of work, with 11 hours of unbroken rest between shifts and 35 continuous hours of rest every seven days.

Sick Leave: Employees unable to work through illness or injury qualify for daily payments from the social security system, with the employer legally required to make up the difference as per the Labor Code. The benefit is paid from day one of incapacity for work-related illness or injury or from the eighth day in other cases and cannot exceed 90 days. Employees receive 90% of their salary for the first 30 days and two-thirds for the next 30, with qualifying periods increased by ten days for every five years of service.

Holiday / Vacation Leave: Paid annual leave totals five weeks after completing one year’s employment, with collective agreements covering entitlement for less than one year’s work. The full entitlement is two-and-a-half days each month to a maximum of 30 days. Labour Day is the only mandatory public holiday in France; employees who have to work earn ‘double time’. There are a further ten statutory public holidays.

Maternity / Paternity Leave: Leave totals 16 weeks, with at least ten taken post-natal and eight weeks the mandatory minimum total. Leave can increase to 26 weeks for a third child, 34 weeks for twins and 46 for triplets. Maternity benefit equals average salary over the three months before birth (with a quarterly cap of €10,131, US$11,920) as long as the individual worked a minimum of 150 hours over the previous three months.

Paternity leave increased to 28 days from July 1, 2021, with salary paid for three days by the employer and by social security for the rest. Seven days are mandatory. For multiple births, 32 days of leave is allowed. Adoptive fathers can also apply. The co-parent has up to six months to take the leave and must have worked at least 150 hours in the three months preceding leave to claim benefits. of is

Parental Leave: Leave starts from the end of maternity leave at six months for one child and up to three years for two or more children. In this case, either parent can receive a benefit for 12 months, but the remaining 12 months are paid only if the parent stops working or sufficiently reduces their hours. The benefit depends on income and length of employment.

Guarantees and Restrictions on Employee Benefits in France

Guaranteed Benefits:

Overtime: Rates are 25% above the hourly rate for the first eight hours and 50% above basic for each subsequent hour.
Health Insurance: All employees who have contributed to the social security funds for the required period are entitled to health insurance.
Public Holidays: There is one mandatory public holiday, Labour Day on May 1, with another ten statutory public holidays.
Vacation Leave: Paid vacation is based on two-and-a-half days per month after more than one year’s employment, to a maximum of 30 days or five weeks. Individual contracts or collective agreements cover holidays for having worked less than 12 months.
Sick Leave: Employees who have been with their employer for one month receive 90% of their salary for the first 30 days, and two-thirds for the next 30 days, with the employer making up the difference according to the Labour Code.
Maternity and Paternity Leave: Sixteen weeks includes at least ten weeks post-natal. Eight weeks is the mandatory minimum. Paternity leave doubled to 28 days from July 2021.

Restrictions:

Social Security: Maternity and paternity benefits – claimants must have worked at least 150 hours within the previous three months or 600 hours over 12 months if working part-time.
Vacation Leave: Employers must have worked at least 12 months with their employer to qualify for two-and-a-half days per month for 30 days annually.
Unemployment Benefit: Claimants must have registered as a job seeker, be involuntarily unemployed and have worked at least four months in the previous 24 months, or 36 months for those over 53-year-olds.
Health Insurance and other Benefits in France
Health insurance is mandatory for all French residents, who since 2016, come under the universal healthcare system Protection Maladie Universelle (PUMA). Permanent residents are covered once they have lived in France for a minimum of three months and have made the necessary contributions, including expatriates who qualify under this requirement. Most costs can be reclaimed to between 70% and 80%. Other benefits cover sick leave, paid vacations, maternity and paternity benefits, and unemployment. All employees paying social security contributions are entitled to health insurance.

Negotiating employee benefits is a complex process for employers in France. The mix of mandatory regulations, collective agreements and individual contracts create many compliance issues. Compensation, benefits, social security contributions and health insurance must be attended to swiftly and efficiently to ensure a smooth transition for your staff. Get ahead of these issues by working with Bradford Jacobs’ Employer of Record (EOR) services.

Social Security in France

The Ministry for Solidarity and Health and the Ministry of Economy and Finance administer social insurance in France. It covers benefits for all salaried workers in the private sector through a network of national, regional, and local institutions and consultation with employers and employees. Around 80% of revenue comes from contributions and taxes calculated on percentage rates from employers and employees. The system covers maternity and paternity benefits, unemployment pay, sick leave, workplace accidents and family benefits. Contributions to the funds are based on percentages of total earnings, as follows:

Health, maternity, disability, death – 13% or 7% (employer)
Autonomy solidarity contribution – 0.3% (employer)
Old-age insurance (with upper limit) – 6.9% (employee), 8.55% (employer), capped monthly at €3,428 (US$4,044)
Old-age insurance – 0.4% (employee), 1.9% (employer)
Workplace accidents – variable
Family benefits – 5.25% or 3.45% (employer)
Social security surcharge (CSG) – 9.2% (employee)
Social security debt (CRDS) – 0.5% (employee)
Unemployment – 4.05% (employer), capped monthly at €13,712 (US$16,176)
Unemployment wage guarantee (AGS) – 0.15% (employer), capped monthly at €13,712 (US$16,176)
Supplementary pension (Bracket 1) – 3.15% (employee), 4.72% (employer), capped monthly at €3,428 (US$4,044)
Additional pension (Bracket 2) – 8.64% (employee), 12.95% (employer), which applies between €3,428 (US$4,044) and €27,424 (US$32,353) Employers’ statutory costs to social insurance can vary between 32% and 45% of gross salaries depending on the ages of employees and various ceilings.

Recruiting Top Talent in France

Recruiting in France can bring potential tripwires for companies taking steps to build their international profile. Finding and recruiting top talent in an overseas territory that is maybe thousands of miles away is a significant challenge. It can be tricky, especially when a company ventures into an unfamiliar country and explores new markets. We can oversee the process for you. Bradford Jacobs’ expertise and over 20 years of experience in international recruitment services are indispensable for expansion into France.

Hiring the right talent in France to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process can be complicated when you have no physical presence in France yet. Our benchmark platforms as a Professional Employer Organisation (PEO) have worldwide reach and include a total understanding of the complexities of the French employment market. Our comprehensive knowledge of all French employment sectors and understanding of the culture and customs guarantees an untroubled transition.

Recruiting in France

Foreign companies recruiting in France do not need to establish a legal entity to hire new employees. However, if you are starting a business or expanding into France, it is crucial to your recruitment drive to know where to locate the best talent who is a ‘perfect fit’ for your company’s activities. The answers do not come quickly – and employers must follow strict registration procedures once the right employee is found. These include:

Apply to the Ministry of Economy and Finance with Form 2043 to obtain the employee’s tax number.
Register employees with their local tax office (Service des Impôts des Particuliers).
Register employees with the Agence Centrale des Organismes de Sécurité Sociale (ACOSS) so they qualify for the social security system and the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales (URSSAF), which processes social security contributions.
Draft employee contracts, which must be in French to be legally valid, with translations as required.
Report to the French authorities on regular and overtime working hours, tax-exempt elements on the monthly pay slip, and withholding tax and social security deductions.
Apply for employees’ permits and visas if required.
Apply for employees’ special expatriation status if applicable.
Calculate employees’ monthly salaries and provide their pay slips.
Research any available tax-free allowances or benefits.
Submit employees’ and employers’ wage tax returns and national insurance forms.
Correspond with the applicable national authorities regarding payroll changes and payments.
Create a payment schedule for wage tax, social insurance, and net wages.

The recruitment process is time-consuming and requires dedication – a difficult task when faced with many other complicated issues involved in international expansion. We can provide all the answers with our Employer of Record (EOR) solution. We will convert your expansion blueprint for France into an action plan with a few simple steps:

Bradford Jacobs locates the perfect employees for your company, then steps in as EOR to ensure they comply with French employment contracts law, payroll, HR, visa requirements and permits (if required).
We manage all work-related registration formalities and ongoing employment issues while you control your employees daily.
The employees complete their timesheets and any expense claims, and we invoice you, the client. Once paid, we deduct all contributions from the relevant French authorities and transfer the balance into the employees’ accounts.

Within a few days, your company will have an international presence in France – in a prime position to explore further expansion into Europe without risking the expense or stress of setting up your own subsidiary or branch office in the country.

Employees’ Legal Checks in France

Article 9 of the French Civil Code – ‘Everyone is entitled to a right to respect his/her private life’ – generally underpins what is permitted to be asked of potential employees. Further Articles of the French Labour Code (FLC) impose other restrictions regarding interview questions and what can be asked during employment. For example:

In general: Requested information must be directly relevant to the position and to assessing the professional ability.
Privacy: No personal information can be gathered without the individual’s knowledge and must be lawfully collected and for legitimate reasons under the rules of the French Data Protection Authority.
Discrimination: Candidates cannot be rejected on ethnic origin, gender, sexual orientation, pregnancy, family status, nationality, political or religious beliefs, health, disability, or trade union membership.
Financial background: There are no credit background checks in France.

Permitted checks include:

Eligibility to work: Verifying whether non-French applicants have the required work or residence permits.
Criminal record checks: In regulated occupations relating to cash transportation, security, surveillance, municipal police officers and airport workers, employers can request that applicants provide an extract from their criminal record. Employers cannot access the information.
References and education checks: Collecting references from former employers or clients and education checks are permitted, with the candidate’s permission.

Basic Facts when Recruiting in France

Terms and conditions of employment come under the French Labour Code (Code du Travail), which governs all mandatory and statutory individual and collective regulations regarding minimum wages, working hours, overtime and paid annual leave.
The Social Security Code (Code de la Sécurité Sociale) covers employees’ sickness, maternity, and paternity benefits. The Penal Code (Code Pénal) can apply to discrimination, health, and safety matters. Where there are differences between the Labour Code and collective or trade union agreements, the terms apply which are most beneficial to the employee.
Permanent contracts for full-time employment do not need to be written, though some collective agreements make this mandatory. When written, they must be in French as the legal reference (translations can be requested) and should include the names and addresses of parties, job title and location, working hours, salary, paid leave, any probation period, and notice period.
According to the French Civil Code, Labour Code, and the French Data Protection Authority, employers’ questions during an interview should be restricted to the job in question.
Employees must be registered with the Ministry of Economy and Finance to obtain individual tax numbers and with their local tax office (Service des Impôts des Particuliers).
Employees must also be registered with the Agence Centrale des Organismes de Sécurité Sociale (ACOSS) and the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales (URSSAF), which handles social security contributions.
Working hours are generally 35 per week and must not exceed 44 on average over 12 weeks.
Overtime is based on a working week of 35 hours, with the first eight hours earning 25% above the basic hourly rate and subsequent hours 50% above.
The Labour Code or collective agreements govern notice periods. The statutory minimum is one month’s notice for between six months and two years’ service, with two months applying above two years’ employment.
Paid vacation is for a minimum of five weeks after one year’s employment, although collective agreements can allow for more.

French Work Culture

Work Culture

To do business in France, it is vital to have a good understanding of its business or work culture. Making the right impression with the right people is the key to success in France, and it is important to back this up with the right research on the market and potential business associates. As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the French work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in France to start your expansion well-informed.

Foreign companies hoping to make their mark in the France’s economy must have a thorough understanding of the country’s work environment – not just it’s tradition of culture, art, and cuisine and in France the love of their language is an important part of that culture. There is a strong division between business and family life and, despite working fewer hours than most of Europe, productivity is high. The Organization for Economic Cooperation and Development (OECD) ranked France 15th out of 87 nations for worker productivity. Although traditional in some ways, tending towards a hierarchical structure, individual initiative is valued by French businesses. Women’s role in business is protected by law and legislation is reducing gender pay differentials.

Punctuality and Meetings: Being on time is not such an issue as in some countries but call if running more than 10 minutes late. Book meetings at least two weeks in advance, mid to late morning or mid-afternoon (avoiding lunch – unless you are invited and, in that case, never be late!). French businesspeople generally do not appreciate you arriving unannounced in their office. Language:

French is the official language, and for many the ‘only language’ and a much-loved part of their culture. Even if your French is scant, don’t start the introductory conversation in English. Make the effort and the meeting will go more smoothly.

Business Relationships: Stay focused on the business reason for the meeting, avoid small talk and don’t stray into questions or revelations about private life. The French keep these two elements very separate. Concentrate on delivering relevant specifics in a clear way without exaggeration or over-emphasis.

Introductions and Greetings: Leave the highest-ranked of your counterparts to initiate handshakes, especially if your opposite number is female. Use ‘Monsieur’ and ‘Madame’ before the surname – some business relationships never get as far as first names. ‘Bonjour’ and ‘Au revoir’ on arriving and leaving is polite. If exchanging ‘la bise’ (‘air kisses’ one on each cheek) do not also shake hands. Exchange business cards, with the French version on the uppermost side.

Gift-giving: There is little tradition for this, choose something tasteful if at all.

Dress Code: Stays formal throughout the meeting; jackets are rarely removed, and ties stay knotted; stylish, smart, and tailored suits for women. If the invitation says ‘Dress informal’, still wear a jacket and tie.

Negotiating the deal: Always best to deal with your highest-ranked opposite number, otherwise subsequent discussions in their office could ‘move the goalposts’. Supply minutes asap after the meeting.

Business Meals: Long business meetings are the norm though more about building relationships, and of course the French take cuisine very seriously. Choose the restaurant carefully as this will indicate the value you put on the relationship. Let your hosts choose the wine.

French Minimum Wage

There was no increase in 2021 to France’s National Minimum Wage of €1,554.60 (US$1,830) per month which is €18,655 (US$21,963) per year and divided into 12 equal payments.

Probation Periods in France

Probation or trial periods are often entered into for mutual assessment. Conditions and skill levels can be written into the employment agreement or contract including the duration and if there is provision for an extension.

Generally, open ended contracts allow for maximum trial periods of:

Blue- and white-collar workers – Two months
Technical staff and middle managers – Three months
Top-line professional and managerial staff – Four months

Provided that extensions to probationary periods do not contravene the industry’s collective agreements, the probation can be extended once, which can effectively double the probation time.

During probation an employer may give notice to his employee:

During first seven days – 24 Hours
In the first month – 48 hours
During months two and three – 2 weeks
Following the third month – 4 weeks
When an employee gives notice in the first seven days – 24 hours
Thereafter during the length of the probation – 48 hours

Both parties can terminate the probation without giving reasons as long as there is no discrimination.

Working Hours in France

Legally, the weekly working hours are 35 across the board. Maximum working hours daily is 10 unless an extension if given in a collective agreement to 12 hours. A rest period is mandatory after four-and-a-half hours. 48 hours per week is the maximum allowed or on average 44 hours over 12 consecutive weeks. Hours are considered overtime above the 35 regular working hours.

Breaks are a minimum of 20 mins every six hours with 11 hours rest between working days and 35 hours rest per working week. Sunday is generally considered a rest day.

Overtime in France

Hours over the legally allowed 35 hours per week or 1,607 hours annually are considered overtime and paid as such.

Remuneration for the first eight hours is paid at 125% of the basic hourly rate and 150% for every subsequent hour. However, collective bargaining agreements can allow for ‘paid leave of absence’ and when overtime per year is more than the 220 hours, then a paid leave of absence is permitted as well as the premium due.

Notice Periods in France

Notice periods in France are governed by both collective agreements and the French Labor Code and the length of notice is determined by seniority. By law the entitlement is:

From six months to two years employment – One month’s notice
For more than two years – Two months’ notice

Employment of less than six months is governed by company code of practice or collective bargaining agreements (CBAs) which may also stipulate longer periods of notice for employees.

Every employee is entitled to notice unless dismissed through gross misconduct. However, there are strict procedures to terminate a contract and dismiss an employee, including detailed written justifications. The employee has the right for union representatives to attend any meetings.

Termination of notice periods can be agreed between both parties. If the employer wishes to terminate the notice period, the employee should still be paid. If the employee wishes to leave, then the employer has no obligation to pay him.

Redundancy / Termination in France

Statutory severance pay equals a quarter of monthly salary for each year of employment up to 10 years and one third for each subsequent year if no collective agreement applies.

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