France

Location

Located in north-western Europe bordering multiple other European countries as well as being the biggest Western European country, France holds an advantageous geographical position. There are 13 regions of metropolitan France, including Corsica and 5 overseas regions.

France includes a number of overseas territories in its sovereignty. These are Guadeloupe, Martinique, Saint-Martin, Saint-Barthélemy, Saint Pierre and Miquelon (Atlantic Ocean); Reunion Island, Mayotte, the French Southern and Antarctic Lands (Indian Ocean); and French Polynesia, New Caledonia, Wallis and Futuna (Pacific Ocean).

Population

France’s population is approximately 68 million, making it the second-most populated country in Europe after Germany. The population continues to increase over the years, though at a slower pace since 2015. This is primarily due to a rise in immigration – France ranks 20^th in the world for migrant intake. France also has one of the longest life expectancies, at 82.5 years old (2019).

As a highly developed country and one of Europe’s founding members, France has the seventh-largest economy in the world. Its GDP value represents 4.17% of the world economy, with a total GDP of 2.832 trillion USD (2020). The French GPP (gross private product) growth is stable, with an increase of 1.6% in 2018.

Trade

France is the second-largest exporter in Europe after Germany. Exports play a crucial role in maintaining the growth of the French GDP.

French exports and imports are mainly trading within the EU. Indeed, only one-third of all exports is going to economies outside Europe. From these economies, China is the largest expeditor for French import and the United States is the largest destination for French exports.

Top Imports & Exports

More than one-third of both imports and exports are traded with Germany, which represents France’s strongest trading partner (respectively 17% and 19%). In terms of export goods, the country is one of the world’s largest exporters of farming and agricultural products in Europe.

Globally, France is a major exporter of aircraft & spacecraft machinery and  ‘delicatessen’ (deli) food products such as wines, spirits and cheeses.

As for services, the largest imports to France are transportation and travel services. France is also the most-visited country worldwide, making tourism a crucial part of the economy.

Free Trade Agreements

As a member of the European Union, France follows the trade policy set for the EU. However, many bilateral and regional trade agreements have also been implemented over the years between the EU and several foreign countries.

Expanding to France? Here is a breakdown of the key things to keep in mind.

Company Setup

France has a lot to offer in terms of business opportunities. It is actually easier to start a business in France than in most other G20 countries.

There are 2 types of business structures to choose from when creating a business in France: a sole trader and a company. The company includes either a subsidiary, a branch office or a liaison office. The tax regime will depend on your chosen business structure.

After that, the next step is to register your business through the CFE. You will also have to ensure you have the necessary funds to deposit the legal minimum of share capital, according to your business type.

Payroll

France has many regulations that make it one of the world’s most complex and challenging countries for payroll. The payroll regime depends on your chosen business structure.

Considering the regulations imposed on the branch and liaison office, the subsidiary option is the most common and preferable for the long-term.

To comply with the French system, both employers and employees must contribute to France’s mandatory social insurance system. The employer’s contribution generally amounts to approximately 50% of the employee’s salary. The employee’s contribution is 20% of their gross wage, directly deducted by the employer.

In 2017, a new automated process was implemented, known as the Déclaration Sociale Nominative (DSN). This must now be implemented with the payroll system to comply with the social welfare reporting requirements.

Employment

Foreign workers are employed under the same working conditions as locals, although there may be some varying conditions depending on the employee category.

Contracts must meet local standards and be drafted in the French language. The minimum for full-time working hours per week is 35 and the maximum is 48.

Immigration

For citizens within the EU/EEA or Switzerland, it is legal to work in France without a work permit. For others, a work permit must be granted prior to any visa or stay document. The procedure must be organised by an employer.

If you plan on staying for fewer than 90 days, a short-stay work visa will suffice. For a longer stay, a long-stay work visa is required. There are different types of visas to work in France and the French law differentiates between a visa and a stay document (known as a ‘carte de sejour’).

The general rule stipulates that a stay document will not be delivered unless first approved by a foreign Consulate.

Tax

As with many European countries, the French tax year follows the calendar year, so from 1 January to 31 December. The standard corporate income tax rate is 33.33%. French corporate tax is payable quarterly on 15 March, 15 June, 15 September, and 15 December.

If you fail to pay on time, late interest may apply. In addition, a 40% penalty can be applied in the case of negligence or 80% for fraud.

Some taxes are deductible for a subsidiary. For a sole trader company, tax is automatically calculated under the personal income tax system or under the rules of the régime micro-entrepris or régime du reel. The national sales tax on goods and services is known as the TVA, which is 20%.