France

Key facts France taxation

France is one of the most powerful countries in terms of economy, especially due to its size and location, as well as the membership in many European organizations, which make it a key jurisdiction for starting companies. Besides, it is one of the most industrialized countries in the world. Anyhow, French economy is characterized by a large industrial base, important agricultural resources and a highly trained workforce. Foreign investments in France are very popular and the government encourages entrepreneurs to come and open companies in France. The main industries in France are: aerospace, tourism, industrial machinery, automotive, pharmaceuticals, food and beverages, printing. The private sector is well-developed. 

SARL (societe a responsabilite limitee):

  • at least two individuals or corporate bodies of any nationality and residence
  • legal office address in France
  • minimum share capital of 1 Euro
  • The initial capital is decided in the articles of association by each legal entity
  • liability of the entity’s members is limited in extend to their contribution to the capital
  • auditor is necessary to be appointed if the company meets two of the following conditions: it has more than 50 employees, a net turnover over 3.1 million EUR or a total balance sheet over 1.55 million EUR

A SA (societe anonime):

  • at least seven members, corporate bodies or individuals
  • three to 18 directors appointed by the shareholders
  • mandatory that at least one member is an individual
  • minimum share capital is 37,000 EUR (from which at least half must be deposited at registration and the other half in maximum five years)
  • the appointment of an statutory auditor is mandatory

French SAS (societe par actions simplifiees):

  • at least one member
  • at least one director appointed by the shareholders
  • minimum share capital of 37,000 EUR
  • appointment of an auditor is mandatory only if one of the following conditions is met: the company has more than 20 employees, the pre-tax turnover exceeds two million EUR or the total balance sheet exceeds one million EUR

The SNC (societe en nom collectif):

  • at least two partners
  • no minimum share capital
  • the partners are liable in extend of their personal assets for the entity’s liabilities

The SCS (société en commandite simple):

  • a general partner and a silent partner; The silent partner is providing capital and it is considered liable only in extend of that capital, while the general partner doesn’t provide any capital and he is considered liable even with its own assets for the entity’s liabilities.

The SEL (société d'exercice libéral) is a rare form of business established by professionals in order to allow those to exercise their professional activity in the form of companies.

The EURL (entreprise unipersonnelle a responsabilité limitée) is a hybrid between a limited liability company and a partnership which doesn’t require a minimum share capital and with the personal assets of the owners not protected in case the company has outstanding debts.

Taxation:

  • standard VAT rate is 20%
  • corporate tax is 33%
  • dividends and capital gains between parent-subsidiary company are eligible for a 95% rebate on corporate tax
  • withholding tax of 30% applies on dividend payments to non-resident companies, unless reduced via tax treaty
  • royalties payments to non EU companies are subject to withholding tax of 33%
  • interest payments to foreign companies are tax exempt
  • a French branch of a non EU company is subject to 30% branch tax
  • filing of Financial Statements in mandatory
  • Business startups with less than 50 employees have an option to pay income tax instead of corporate tax during the first five years