The following is an outline of points to consider when setting up a business in France.

With few exceptions, foreign investments in France are not subject to prior administrative control. As EU members, UK citizens are free to set up any commercial business and to manage a French company.

An individual or a company deciding to set up a business in France will benefit from a secure legal framework that offers a large variety of options from individual ownership to the listed company.

While individual ownership remains the most common form of business, this appears only suitable for businesses of limited levels and risks, since all investments will be risked to meet business liabilities. In addition, the evolution of an individual business is virtually impossible due to the costs of conversion into any corporate form.

The common practice is therefore to set up the business, even if this is of a small size, under one of the corporate forms provided by French law.

Setting up a company gives rise to an independent legal entity having its own assets/liabilities, separate from that of its owner. In case of insolvency and unless mismanagement can be proven, the investor's estate remains safe from the business' creditors.

The most common corporate forms are the Société à Responsabilité Limitée (SARL), the Société Anonyme (SA) and the Société par Action Simplifiée (SAS). Property is generally held through a Société Civile Immobilière (SCI).

The choice of legal framework will depend on the investor's development strategy and will take into account various aspects such as:

Financial commitment (capital amount differs from one corporate form to another)

Taxation (corporation tax is the rule, but personal income tax can be an option in some cases)

Social security coverage (health/pension coverage depends on the chosen independent or corporate form).

Contact French Law & Property Department

For further information, please contact:

Dawn Alderson
  Tel: +44 (0) 20 8394 6373
  dawn.alderson@russell-cooke.co.uk

Patrick Delas
  Tel: +44 (0) 20 8394 6387
  patrick.delas@russell-cooke.co.uk

Véronique Cardon
  Tel: +44 (0) 20 8394 6335
  veronique.cardon@russell-cooke.co.uk

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