As a springboard for Europe, France is a coveted destination for entrepreneurs. Moreover, France demonstrates a very favorable entrepreneurial environment. According to figures published by INSEE in 2019, there are more than 4 million businesses in the country. France stands out for the simplicity and speed of the formalities related to the creation of companies. This article will highlight everything you need to know to start a business in France.
Starting a business in France: assistance for creation
The existence of aid mechanisms for business creation is a French particularity. It also proves the entrepreneurial dynamism of the country. The aid can take the form of a sum of money, a tax break, support or a grant. A distinction is made between public and private aid.
First of all, there is the NACRE device or new support for the creation or the takeover of a company. This type of aid is provided by a subsidy organization approved by the State. This aid corresponds to a loan at a zero rate over 5 years and without guarantee. It is intended to accompany young people under 30 in the process of creating a business. In addition to the financial aid, the NACRE system helps the entrepreneur to set up the project and during the first three years of activity.
Secondly, France has set up the ACRE system or aid for the creation or takeover of a business. This system provides an exemption from social charges at the beginning of the activity. In order to benefit from this scheme, you must meet the various eligibility conditions.
Thirdly, there is the ARCE device or Aid for the takeover or creation of companies. This aid is granted by Pôle emploi. It is intended for jobseekers who receive the back-to-work allowance (ARE). It corresponds to the payment of 45% of the ARE that remains to be paid, thus serving as capital for the start-up of the activity.
Finally, France has set up a number of training programs to support entrepreneurs. These trainings are provided, in most cases, by the Chamber of Commerce and Industry. For the most part, the trainings are free.
Aid for the creation of companies: private aid
There are other ways to finance an entrepreneurial project.
On the one hand, there is the honorary loan. It is a loan intended particularly to meet the need for working capital for the beginning of the activity. This loan is at zero interest and without guarantee or surety. It is considered as a private aid because it is mainly granted by an associative organization. On the other hand, the entrepreneur can resort to or apply for the project competition to benefit from financing. Finally, it is possible for the entrepreneur to integrate the incubators. This is a structure that accompanies entrepreneurs at all stages of the project.
Creating a company in France: the different steps
Choosing the legal status and tax system
Any commercial company created on French territory must, in principle, have a corporate form. To this end, the provisions of the Commercial Code have presented several types of legal status. Each of these legal forms corresponds to the aspirations and expectations of the entrepreneur. On the one hand, there are the forms for those who want to start up alone. On the other hand, there are those for those who want to become partners.
Once the entrepreneur has chosen the legal status, he must proceed to the choice of the tax system. There are two options for taxing profits: corporate tax (IS) and income tax (IR). Certain companies are obliged to pay corporate income tax. On the other hand, they can opt for the income tax. This is the case of the SASU. It is in principle subject to corporate income tax, but can opt for income tax.
Choose the elements of individualization of the company
These elements are mainly: the corporate name and the registered office. They are mainly used to identify the company although their determination is a legal obligation. Moreover, they play a significant role on the image of the company. They must be included in the company’s articles of association.
The determination of the registered office corresponds to the domiciliation of the company. It is the fact of attributing an administrative address to the company. The domiciliation has many interests. It determines the nationality of the company as well as the applicable law. It determines the commercial court with territorial jurisdiction. Finally, it determines the tax policy to be applied. Indeed, if the company is located in an urban free zone (ZFU), it benefits from a tax exemption on profits for a period of 5 years. As for the business property tax, it depends on the city. To benefit from a lower CFE, some companies opt for commercial domiciliation.
Drafting the company’s articles of association
This is the document that governs the operation of the company. Its drafting depends on the corporate form chosen by the entrepreneur. In any case, it must respect the formal requirements of the law.
Before signing the articles of association, the contributions must be made.
Making the contributions
The contributions correspond to the constitution of the share capital. In the majority of the legal statutes, there is no minimum amount of social capital. However, the partners can agree in the statutes to opt for a variable capital. This means that they have the possibility to vary the share capital.
It should be noted that according to the provisions of the Madelin law, any person making a contribution to a company benefits from an income tax reduction equal to 25%. To benefit from this reduction, certain conditions must be met. These conditions relate to the person of the subscriber, the subscription and the company.
Publish a notice of incorporation
The notice of incorporation is used to inform third parties. It must be published in a newspaper of legal announcements of the jurisdiction of the registered office of the company.
Administrative formalities for registration
The application for registration can be filed directly with the competent CFE. It can also be sent online on the official Infogreffe website. In all cases, certain documents must be provided. After processing the application, the company obtains a Kbis extract.