Before doing any business in France, you should carefully research the main issues (outlined below) which are involved.
French language, law, local and national bureaucracy, culture and taxes may all be initially unfamiliar, but must be mastered if a long-term investment is to be successful.
You should also get unbiased and independent professional advice tailor-made to your specific circumstances before making any commitment.
English and other EU nationals do not generally require written permission to live or work in France. Americans or other non-EU nationals must by contrast hold valid French resident and work/business permits.
To work in France within the law, you should be able to speak and write French well, although translation/support agencies can be an economical way to help you with official and other day-to-day correspondence.
You should employ a good local French accountant from day one. S/he will ensure that you take advantage of all the many available tax allowances and deductions to avoid or mitigate payment of French taxes. A cheaper alternative may be to use the Centre de Gestion attached to your local Chambre de Commerce.
Some French businesses (e.g. estate agencies) are more tightly controlled these days than others.
Do you need French-recognised qualifications, licences, insurance cover etc?
What are the civil/criminal penalties if you do not adhere to these and any other requirements?
You may be encouraged or even required to attend a full-time stage de gestion in order to learn how to run the administrative/tax side of a French business.
The licensing of premises where alcohol and soft drinks are consumed is strictly regulated by the Code des débits de boissons.
You cannot obtain a licence before completing a déclaration préalable which must be filed with the Mairie (the Préfecture de Police in Paris) at least 15 days before the opening date.
A further declaration must also be made to the recette locale des douanes et droits indirect.
Proprietors of restaurants, hotels and chambres d’hôte who serve drinks (even free of charge) with main meals and as accompaniments to food must hold a licence restaurant.
A petite licence is required where only soft drinks, beers, wines and other alcohol with a content of less than 3 degrees are provided. If spirits and other drinks with an alcohol content of up to 18 degrees are also served, you must hold a grande licence restaurant.
Hotel and restaurant licences can be obtained relatively easily with no limit on numbers.
No matter how small your business, it must be registered with at least one and usually several different French authorities. They will write to you regularly and you must respond, usually by LRAR (registered post).
All French businesses are subject to and must register for TVA (French VAT).
There is no minimum threshold below which you do not need to register. Except for very small businesses, all TVA returns have to be made monthly, and not quarterly as in Britain.
TVA refunds are not received automatically. They have to be applied for specifically at certain dates in the year, and they do not come through very quickly.
Your local Mairie, Chambre de Commerce and tax office are a potential wealth of local information about TVA and other matters. It pays to be in their good books, and they may help make your plans succeed.
If you require funding banks may demand detailed business plans/cash flow forecasts. Some form of French security (e.g. the business premises and/or any goodwill you own) is usually required.
If you take a lease of business premises, take legal advice to ensure among other things that the wording of your lease ensures that the future value of your business is protected. The relevant law is complex and changes regularly.
If you buy an existing company, you usually either buy its share capital or buy the underlying assets owned by that company. For French stamp duty purposes it is cheaper to buy the shares but you then accept any undisclosed liabilities.
Deciding on the right business structure (e.g. sole trader, partnership or a French company) depends on a variety of detailed factors such as the need for limited liability, capital requirements, tax considerations etc.
These details should be discussed with your legal/tax advisers at the earliest possible stage.
If you decide to take on French employees (expensive in terms of French social security charges) you must enter into a contract which complies with French employment law.
Among other things this limits the length of the working week, provides for holiday entitlements, maternity leave etc. It is difficult to dismiss a French employee.
Whether or not you take on French employees, insurance is a strict legal requirement. You must as a minimum usually have public liability, workshop, tools and equipment, injury and sickness income protection insurance cover.
Remember any contract of employment must be in the French language. This also applies if you are subcontracting work out rather than employing people direct. It makes no difference whether your employees or subcontractors are wholly British nationals.
The list of potential questions to ask before doing business in France is of course endless. What is however important is to be able to confer with the relevant experts – in a language you understand – who can listen to your needs, ask you any relevant questions and then provide you with the right answers.
