Setting Up Your Business in France: GEOS Guide for Global Expansion

This article is apart of our weekly series associated with the The Global Subsidiary Index. The series is designed to help businesses identify the best countries for establishing a subsidiary based on key operational factors. GEOS provides a data-driven ranking of jurisdictions worldwide, assessing across 40+ criteria to bring you insights into global expansion opportunities.

Each country on the index is scored on an overall score out of 100, with each individual criterion out of 5 or 10. Higher scores indicate a more favorable environment for businesses. By leveraging these insights, companies can make informed decisions on where to establish a legal presence.

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France is gaining ground with global companies. With billions raised by French start-ups and over 1.1 million jobs created, the country’s tech ecosystem is booming. Doing business in France comes with big advantages, strong economic foundations, a great location, and a pro-growth mindset.

Backed by strong government support and global investor interest, France now leads the EU in startup fundraising and ranks 11th worldwide for innovation.

If you’re thinking about expanding into France, there’s never been a better time. In this guide, we’ll walk you through what to expect and how GEOS can help you set up smoothly and stay compliant every step of the way.

Why Should You Expand to France?

Doing business in France puts you at the heart of the EU economy. It offers stability, skilled talent, and room to grow. Here’s why many companies see France as a smart place to expand.

Europe’s Economic Powerhouse with Distinct French Market Advantages

France is the seventh-largest economy in the world. It ranks third in Europe after Germany and the UK. In 2022, its GDP reached $2.78 trillion. It’s expected to stay steady through 2024.

The country has strong consumer spending power. That gives France a GDP per capita score of 10 out of 10. People spend across many sectors, from luxury goods to tech. For global companies, that makes France a high-potential market.

France scores 58.8 on the GEOS Global Subsidiary Index. It offers solid opportunities but also presents challenges. One key challenge is employment law. Hiring and firing can be slow and expensive. Managing a team in-country takes planning and local support.

Still, the economy is well-rounded. France gets a 5 out of 5 industry diversity score. Major sectors include tech, fashion, luxury goods, aerospace, and automotive. Since 2017, the country has added over 300 factories and 90,000 jobs. The government is also investing $24.8 billion into green industries by 2030. That includes clean tech and efforts to cut industrial emissions.

France has a 4 out of 5 political risk score. The political system is stable and supports long-term investment. France plays a key role in global trade through the EU, G7, G20, and OECD. Recent elections brought some uncertainty, but core policies remain steady.

Other strengths add to its appeal:

• Strong transport and logistics
• Near-complete 5G coverage
• Legal protections for intellectual property
• Skilled workforce and top universities
• Advanced financial systems

France brings strong demand, sector variety, and global influence. Labor laws can slow things down, but with the right setup, companies can grow here. It’s a solid base for long-term success in Europe.

Competitive Tax & Financial Environment

France has a modern tax and financial system. The VAT complexity score is 3 out of 5. The rules aren’t the toughest in Europe, but they’re not simple either. The standard VAT rate is 20%. Reduced rates apply to certain goods and services, 10%, 5.5%, or even 2.1% in some cases.

B2B services are usually taxed where the customer is based. B2C services are taxed where the supplier operates. Some exports and cross-border services are exempt. To stay compliant, you need a solid VAT process in place.

France applies several other taxes. These include:

• A 0.16% social contribution tax on revenue
• Excise duties on fuel, alcohol, and tobacco
• Environmental taxes and eco-contributions under EPR laws
• A 3% tax on French real estate
• Local business taxes like property tax, CFE, and CVAE

The corporate tax rate score is 6 out of 10. The standard corporate tax rate is 25%. Small businesses can pay just 15% on the first €42,500 of profit if they meet the requirements. Bigger companies may owe more through a 3.3% social surcharge or one-time contributions.

There’s also a 10% tax rate for income from patents and certain IP under the patent box regime. France has adopted global minimum tax rules, too, which apply to large multinationals.

Businesses must pay tax on their earnings and manage their tax affairs in accordance with French regulations. Payroll taxes are another factor. If a business isn’t subject to VAT on at least 90% of its revenue, payroll tax applies.

Social contributions are high; employers pay around 45% of gross salary. Social security contributions are a mandatory part of registration and ongoing compliance in France. That makes labor costs a major consideration.

Other taxes to plan for when doing business in France:

• Transfer taxes on shares, property, and goodwill
• A financial transaction tax (FTT) of 0.3% (rising to 0.4% in April 2025)
• A 3% digital services tax for large tech companies

France scores 5 out of 5 for financial infrastructure. Its systems are fast, secure, and fully integrated with EU platforms. Payment systems like T2-BF and SEPA ensure smooth transactions. The Banque de France, AMF, and ACPR oversee regulation and stability.

Still, opening a local bank account isn’t always easy. It often requires an in-person visit and detailed paperwork. But it’s necessary. Businesses must have a local account to handle tax payments. Engaging with French tax authorities is essential to ensure proper registration, compliance, and to effectively manage your tax affairs. During the registration process, businesses may receive official correspondence from a tax officer, such as a welcome letter containing essential registration details.

Choosing the Right Business Structure

Selecting the right business structure is a foundational decision when starting your own business in France. The structure you choose will impact everything from liability and taxation to management flexibility and future growth.

The most common options for foreign entrepreneurs and local founders alike include the Sole Proprietorship (Entreprise Individuelle), Limited Liability Company (SARL), Simplified Joint Stock Company (SAS), and Joint Stock Company (SA).

A sole proprietorship is the simplest form, ideal for freelance professionals or those launching a small business with minimal risk. However, it does not provide separation between personal and business assets.

For those seeking limited liability protection, a SARL (limited liability company) is a popular choice, especially for small to medium-sized businesses. It offers a straightforward setup and shields personal assets from business debts.

The SAS (simplified joint stock company) is favored by startups and growing businesses that value flexibility in management and shareholding. It allows for customized governance structures and is well-suited for companies planning to attract investors. The SA (joint stock company) is designed for larger enterprises, particularly those considering public offerings or significant capital raising, but it comes with more complex regulatory requirements.

Choosing the right business structure is essential for ensuring compliance, managing risk, and supporting your long-term business goals in France.

Workforce & Hiring Regulations

France has strict labor laws. The employment law complexity score is 1 out of 10. The rules favor employees. Employers must follow clear steps when hiring, managing, or letting someone go. In France, employers are legally required to pay at least the minimum wage (SMIC) to all employees, which directly impacts employment costs and the calculation of net salary and social charges.

Hiring is generally easy. The difficulty of recruiting score is 8 out of 10. But once someone is on payroll, the law gets stricter. Most employees work 35 hours a week. Overtime is allowed only with approval and must follow legal limits.

Non-EU citizens need a work permit. Employers and employees can agree on terms, but the law sets minimum rights. These include paid leave, work-hour limits, and health protections.

Dismissals need valid reasons. They must be based on personal conduct or economic need. Severance pay depends on service length and the collective agreement.

Recent reforms brought some flexibility. New laws cover whistleblower protections, gender balance in leadership, and sick leave rules. But the system is still complex.

Unions and Labor Relations

Unions play a major role. The union complexity score is 1 out of 5. Even small unions have influence.

Two members can form a union section at work. These groups can hold meetings and share updates. If a union earns 10% in workplace elections, it becomes representative.

In companies with 50 or more staff, representative unions can appoint delegates. These delegates:

• Get 12 to 24 hours a month for union work
• Can move freely on-site
• Are protected from dismissal
• Negotiate with management

Unions that aren’t yet representative can still appoint a union rep. They get four hours a month to grow support.

Overall, hiring in France is fairly simple, but managing employees brings more complexity. Labor laws set strict rules and offer strong protections for workers. These rules cover everything from working hours to termination.

On top of that, unions are active and often involved in key decisions. To manage teams effectively, employers need legal guidance to stay compliant.

Company Formation, Incorporation & Compliance Essentials

France makes it fairly easy to register a business. The government portal sophistication score is 4 out of 5. Most company setup steps can be done online. You can submit documents, update records, and handle filings through official digital platforms.

The system is efficient, especially for standard procedures. The business registration and company registration process in France requires following the correct registration process and meeting all legal requirements to ensure your new company is properly established. When starting a business in France, it is important to plan carefully, complete legal registration, and choose the appropriate legal status for your business project.

Paperwork and Documentation

Still, paperwork is part of the process of doing business in France. The original paperwork score is 2 out of 5. Many filings need notarized documents or certified translations. Some steps also require an apostille. These rules can slow things down, especially for foreign founders.

Online tools help, but you’ll likely need to send or present physical documents at some point. You must submit official documents, such as the Kbis certificate, and ensure the business name and company name are included in all legal filings.

Director Requirements and Local Support

France gets a resident director score of 3 out of 5. You don’t need a resident director by law. But having a local advisor or representative helps. They can guide you through registrations, speak with authorities, and assist with opening a bank account.

Bank Account and Capital Deposit

After depositing share capital in a French bank account, the unblocking of capital typically takes about two weeks once the bank receives all necessary documentation. The one stop shop (guichet unique) and the local chamber of commerce are valuable resources for business registration and company formation, helping entrepreneurs navigate the process.

Legal Publicity and Court Registration

When completing legal and administrative steps, you must publish legal publicity in an authorized newspaper and register your new company with the commercial court (Greffe du Tribunal de Commerce).

Choosing a Legal Structure

It is also essential to select the correct legal status, business category, and company structure, as these choices determine whether your business is a separate legal entity and affect compliance obligations. The choice of business type impacts startup costs, investment requirements, and legal setup processes. Registration with social security authorities is required, ensuring social security coverage for both entrepreneurs and employees.

When considering company structures, SAS, SASU, and SARL are recognized legal forms of commercial company in France, each offering specific characteristics and liability protections. Understanding the procedures and registration steps specific to establishing a French company is crucial, as is knowing the role of government agencies involved in formalizing your business.

The SARL is an example of a limited company (société à responsabilité limitée) in France, suitable for family businesses and offering liability protection. In the case of SASU, a natural person can act as the sole shareholder in this corporate structure. The société par actions refers to a traditional stock company in France, with specific legal and administrative characteristics. The société par actions simplifiée is a flexible and popular corporate structure, suitable for start-ups and entrepreneurs.

Protecting your industrial property, such as trademarks and business names, through the national institute (INPI) is also important. If you operate in regulated professions, additional steps or verification may be necessary to comply with industry-specific regulations.

After registering with the tax authorities, you will receive a welcome letter from the tax office containing essential details such as your VAT number and contact details for your assigned tax officer.

Immigration & Work Permits

Immigration in France is complex. The immigration complexity score is 1 out of 5. The process is strict and requires detailed paperwork. Employers and foreign workers must follow specific rules.

France has a long history of immigration. Workers have come from Spain, Portugal, and North Africa. But in recent years, public sentiment has shifted. Economic stress and political pressure have made immigration a more sensitive issue. As a result, the rules have tightened.

Most non-EU nationals need a work permit before they can start working. In addition, non-European entrepreneurs may need to obtain a residence permit to legally operate a business in France.

The specific requirements for visas and permits can differ depending on the individual’s home country. The permit type depends on the job, salary, and contract terms. Some require sponsorship from a French employer. Others need proof of qualifications.

Key points to keep in mind:

• Missing documents often delay or stop the process
• Regulations change often, so it’s important to stay updated

Keep in mind that applications are reviewed carefully. And mistakes or outdated paperwork can lead to rejections. That’s why many companies turn to legal or immigration advisors to avoid issues.

Regulatory & Compliance Risks

Doing business in France means complying with strong data protection and licensing rules. The data management laws score is 4 out of 5, showing clear alignment with the EU’s GDPR. These rules apply to any company handling personal data of people in the EU, even if the company is based elsewhere.

France has its own national law that builds on GDPR. Updates in 2021, 2022, and 2024 expanded the law’s scope. New rules cover age checks, online tracking, and health data. France’s data authority (CNIL) has the power to issue fines or formal warnings. In addition, French law requires companies to comply with specific legal and accounting standards, including keeping detailed financial records.

Common risks include:

• Missing documentation or consent procedures
• Broad enforcement and extra requirements for non-EU companies

Companies need strong data processes. That means clear policies, proper user consent, and detailed records.

The licensing requirements score is 3 out of 5. Rules vary by profession and by where the qualification was earned. EU citizens benefit from mutual recognition, but the process can still take time. For non-EU professionals, recognition is stricter and handled at the national level.

France may require proof of course content, local exams, or extra training. Employers often need to help assess and document qualifications.

Talent Availability & Operational Considerations

France offers strong talent across key roles. The marketing talent score is 5 out of 5. Skilled professionals are widely available, especially in digital and brand marketing. Cities like Paris and Lyon have large talent pools.

The developer talent score is also 5 out of 5. Tech talent in France is top-notch. Developers are trained in AI, software, and data. Many have experience working in global teams and speak English well. This makes France a solid base for tech-driven companies.

The language score is 3 out of 5. French is still the dominant language. But English is common in tech and multinational firms. Many professionals are bilingual, though not all roles require or offer full English fluency.

The salary benchmarking score is 2 out of 10. Wages in France are high, especially in senior or technical roles. Social charges and benefits add to the cost of employment.

Key operational considerations:

• Budget for higher total compensation, including taxes and benefits
• Expect to operate in French for most day-to-day interactions outside global teams

Unique France Expansion Insights

France is a strong choice for businesses looking to grow through innovation. It offers deep talent, generous incentives, and region-specific strengths. When planning your business in France, it is essential to develop a business plan tailored to the French market, as this will help clarify your goals and support applications for bank accounts or investment.

Entrepreneurs, especially those launching a small business or a freelance professional, can benefit from personalized guidance and expert advice throughout the business launch process. Access to these resources and support systems makes expansion smoother and more effective.

Regional Innovation Hubs

Paris sits at the center of France’s innovation scene. The city excels in AI, fintech, edtech, and biosciences. It’s backed by world-class universities and high-tech research centers, creating a strong pipeline of talent and discovery. 

Venture capital activity continues to rise, and Paris’ tech professionals are known for their enthusiasm in networking. According to Startup Genome, Paris is now the biggest biotech hub in Europe.

• Specialties: AI, fintech, edtech, biosciences
• Backed by top universities and research centers

Lyon has emerged as a fast-growing digital tech hub. The city supports its tech ecosystem with strong training programs, respected research labs, and a dense network of startups and large companies. Its entrepreneurial energy is matched by solid infrastructure and a steady flow of local events that keep its tech communities active and connected.

• Leading sector: digital technology
• Strong mix of training, research, and tech infrastructure

Toulouse is built on aerospace and deep tech. It’s home to Airbus and the Aerospace Valley cluster, making it a European leader in aviation and space. The city also pushes forward in AI and biotech, thanks to institutions like ANITI and Oncopole. 

This combination of research excellence and industry collaboration makes Toulouse a standout in healthcare innovation, smart mobility, and autonomous systems.

• Core strengths: aerospace, AI, biotech
• Key institutions: ANITI (AI) and Oncopole (medical research)

Cultural Dynamics

When doing business in France, it’s important to keep culture in mind. It tends to be more formal and structured. It’s a high-context environment where tone, body language, and hierarchy matter.

Decisions often go through senior leadership. Clear, respectful communication helps build strong working relationships. While many aspects may feel familiar, the underlying expectations and norms are often very different from places like the U.S.

Government Incentives

France offers generous tax relief for R&D, clean tech, and collaboration with research institutions. Key programs include:

• R&D Tax Credit: 30% of eligible expenses up to €100M, 5% above
• Research Collaboration Credit: Up to 40% of costs (50% for SMEs), capped at €6M
• Green Industry Credit: 20%–40% of clean tech project costs, capped at €150M–€350M
• Patent Box Regime: Reduced tax rate for income from qualifying IP
• Charitable Donation Credit: 60% tax credit on donations up to €2M (40% above that)

Unused credits can be refunded or carried forward, helping companies manage costs during early-stage growth or large-scale investments.

Overall, France offers the right mix of talent, funding, and infrastructure for innovative businesses. Local knowledge and cultural awareness are key to unlocking long-term success.

How GEOS Simplifies Your Expansion into France

Doing business in France means you’re building within a major economic force in Europe. In 2023, it produced €2.8 trillion in goods and services. It’s home to more than 4.7 million businesses. But setting up there can be tricky. The rules are strict, and the paperwork adds up fast.

Foreign companies looking to establish a presence in France, whether through a branch or subsidiary, can benefit from expert support to navigate the incorporation and compliance process. GEOS makes it easier. We handle incorporation, filings, and local compliance from start to finish.

AI-Powered Global Expansion Support

Geovanna, our AI assistant, keeps your expansion moving. She helps you stay ahead of deadlines and navigate local rules. You get a smoother setup, fewer surprises, and more time to focus on strategy.

Is France the Right Fit for Your Business?

France scores 58.8 on the GEOS Global Subsidiary Index. That means a solid opportunity, but also a need for precision. If you’re ready to plan carefully and play by the rules, France offers real potential. The talent is strong. The infrastructure supports growth. And the market is worth the effort.

📩 Contact GEOS for a Customized Expansion Strategy

Thinking about expanding into France? Let GEOS help you build the right path forward. Book a demo today.

This article does not constitute legal advice.