5 Things to Know Before Doing Business in France

This #MemberInsights article is contributed by FACC Member, Benjamin PIK.

Benjamin is a French-American CPA who holds a degree from Université Paris Dauphine and from Concordia University. Prior to joining AS Partners, Benjamin worked for 10 years in international accounting firms across North America, the Middle East, and Europe where he coordinated French and foreign reporting audits, provided advisory services for governance and risk monitoring.

Benjamin assists US subsidiaries in France and American entrepreneurs who want to develop their business in France by providing them administrative accounting and tax assistance.

The French market represents an attractive opportunity for a wide variety of businesses. The economic landscape has never been so promising, and the country has rapidly bounced back from the effects of the COVID-19 pandemic. 

In recent years, France has become one of Europe’s most prominent tech hubs, with the emergence of notable startups across multiple industries. France now boasts 26 unicorns (companies valued at more than $1 Billion), and in 2021 alone, French tech companies raised €11.6 Billion in new venture capital. It’s true that the influence and reach of the French business community continue to grow across the globe. 

This rapid innovation and growth are occurring alongside notable investments from the French government. President Emmanuel Macron recently announced 21 major new investments totaling over €4 Billion, which promise to create over 10,000 new jobs. 

For many companies, France now represents the primary gateway to the European market. But there are a few things that you should know before expanding your business into France. Here are five of the most important:

The Variety of Available Business Structures

Entrepreneurs have plenty of options when it’s time to set up a structure for their business in France. In fact, it’s not always necessary to have a legal commercial entity to start doing business, and it’s possible that companies can avoid having to deal with all the administrative work that goes along with this. 

Instead, we suggest you work with a local representative who understands the French business environment and will help you explore different business structures before landing on the one that’s right for your company. Running alone solves nothing: it’s more important to start moving at the right moment. 

Tax Incentives

Corporate tax rates in France are gradually declining, making France a much more attractive destination for international entrepreneurs. In 2022, the corporate tax rate was reduced to 25%, and for smaller businesses, a reduced rate of 15% applies to the first €38,120 in taxable annual profits. 

In addition to this, the French government continues to invest in tax incentive programs. One notable example of this is the Research Tax Credit (CIR), which offers companies the opportunity to claim reimbursement for up to 30% of their investments in research, experimentation, and development initiatives conducted in France. 

There are further tax incentives for startups through the Young Innovative Enterprise classification. Companies with heavy research and development investments (15%+ of total expenditure) can claim many tax exemptions, including a two-year exemption from corporation tax. 

Favorable Immigration Landscape

In today’s global economy, access to talented professionals is a prerequisite for success. In France, the government has created immigration policies that make it easy for companies to hire skilled workers and relocate them to France. 

There’s a range of residency permits available, with one of the most notable being the “passport talent”, which allows skilled professionals and their families to live and work in France. 

Attractive Social Security System

France’s social security system is one of the most advanced in the world and provides all kinds of benefits to residents. 

The majority of employees receive government coverage for sickness, maternity, and paternity leave, as well as other family benefits, all offered through the compulsory general scheme. 

French Business Mindset

For many years, France trailed behind other advanced countries such as the United States when it came to company creation and business mindset, but recent years have seen this gap shrink significantly. 

The French business mindset is evolving rapidly, with deals closing much faster than ever before, and all kinds of stakeholders being more responsive to the needs of modern businesses. There’s truly never been a better time to do business in France.  

AS Partners: A Trusted Partner

If you’re considering entering the French market, it’s important you have a partner you can trust and who understands your needs and requests.

Here at AS Partners, we’ve got a proven global track record, and have helped over 100 different clients to navigate the French business environment. To learn more, contact us today.