France Expansion Guide
Global Upside helps companies set up, hire, and operate in France. Set up a legal entity quickly and easily with our solutions for branch, subsidiary, and rep office. Looking for an alternative to permanent establishment? Hire and pay employees in France without a legal entity by using our PEO & employer of record services. Once your business is set up, our teams can support with recruitment and staffing, human resources, employee benefits, payroll, accounting, and tax.
France is located in Western Europe, bordered to the north-west by the English Channel, the north by the North Sea, and the Mediterranean Sea. Countries along its borders include Belgium, Luxembourg, Germany, Switzerland, Italy, Monaco, Spain, and Andorra. France is among the strongest nations in Europe and pivotal in the sustainability of the European Union. Tourism, telecommunication, agriculture, machinery, chemicals, and steel are the major industries in France.
A SARL is easy to set up and administer and is suitable for small businesses. Consequently, it is the most popular corporate structure in France, owing to the numerous benefits to small firms, such as cheap capital requirements, hassle-free rules, and regulations.
SAS is an increasingly used type of establishment, essentially because of its immense adjustability and low capital obligations. However, SAS does not have access to the capital markets, and its shares are not fit for trading on a stock exchange.
In France, an employment contract can be either in writing or verbal.
The employee has the right to request a copy of the agreement in their native language, but only the French document is legally binding.
Some of the details typically mentioned in the written contract include:
- The amount of paid leave to which the employee is allowed
- Or in the absence of paid leave, the procedures for allocating and determining the leave
- Salary information, including the payment frequency
- Collective bargaining agreements that govern working conditions
- and more
The different types of employment relationships are:
- Permanent Employment – Per the labor code of France, a permanent employment contract, also known as Contrat à Durée Indeterminée (CDI), is a contract with no end date. Permanent employees are entitled to a variety of benefits.
- Fixed-Term Contracts – Per the French labor law, a fixed-term contract, also known as Contrat à Durée Déterminée (CDD), is for a specific duration of employment. Fixed-term agreements do not replace permanent jobs within the company. Fixed-term contracts have a maximum term of 18 months, including renewals.
- Temporary Employment – Per the French Code of Employment, a TWA (Contrat de Travail Temporaire ou d’Intérim; a temporary or agency job contract) involves three parties: the employer, the employee, and the employment agency. The conditions for a TWA are almost the same as those for a CDD.
In France, CDI’s typically have probationary periods as follows:
- for workers and employees – 2 months
- for supervisors and technicians – 3 months
- for executives – 4 months
The probationary period for CDD generally may not exceed:
- One day per week for the contract duration, up to a maximum of 2 weeks for an initial term contract of 6 months or less.
- Up to 1 month for employment contracts with a period of more than six months.
If an industry-wide agreement allows, the employer can extend the probationary period once.
The statutory maximum working hours in France are 35 hours per calendar week or 7 hours per day. However, with occasional exceptions, work hours may extend up to a maximum of 48 hours per week (an average of 44 hours weekly during 12 consecutive weeks and 10 hours per day).
Employees in France are entitled to the following leaves:
- Annual leave – Per the Employment Code of France, full-time employees earn 2.5 days of annual leave every working month. Total annual leave is limited to 30 working days per year.
- Maternity leave – Female employees are allowed 16 weeks of paid maternity leave.
- Sick leave – The French Labor Code does not mention a specific number of days of sick leave. However, employees are allowed paid sick leaves on presenting a sick leave certificate (avis d’arrêt de travail) from a doctor.
- Paternity leave – Fathers are entitled to 11 consecutive days of paternity leave (or 18 consecutive days if multiple children are born or adopted).
The following are the statutory national holidays observed in France:
- January 1 – New Year’s Day
- April 5 – Easter Monday
- May 1 – Labor Day / May Day
- May 8 – WWII Victory Day
- May 13 – Ascension Day
- May 24 – Whit Monday
- July 14 – Bastille Day
- August 15 – Assumption of Mary
- November 1 – All Saints’ Day
- November 11 – Armistice Day
- December 25 – Christmas Day
In France, the retirement scheme consists of a compulsory supplementary scheme and a statutory scheme. Individuals must also make appropriate contributions (contribution trimesters) to be eligible for a full pension.
Social insurance, often known as social welfare, is a government-mandated insurance program that provides financial help to the elderly, disabled, injured, and unemployed.
Some examples of social insurance programs in France are:
- Dependents’/Survivors Benefit – France’s statutory social security system provides survivors’ benefits, including a death grant, a lump sum paid to the surviving dependents, a survivor’s pension, and a temporary widowhood allowance.
- Life and Disability Insurance/Benefit – The conditions for receiving disability benefits for occupational and non-occupational accidents or diseases are different.
The following are examples of other statutory benefits:
- and more
According to French employment law, the termination of an employment agreement by either party must be preceded by a notice period for the following duration:
- Employment between 6 months and two years – 1 month
- Employment of more than two years – 2 months
Any current collective agreement or employment contract may raise the statutory minimum.
Visa/ Work Permits
The length and reason for the visit determine the type of visa necessary to enter France.
There are typically two categories of visas:
- Schengen visa – Schengen Short or short-stay visas are for stays of up to 90 days.
- Long-stay visa – Long-stay visas are for individuals who plan to stay for more than 90 days.
People from the following countries do not need a visa to enter France: all 28 EU member countries, Switzerland, Iceland, Liechtenstein, and Norway.
Per French law, EU citizens do not require a work or residence permit if they have a passport or other form of identification proving that they are EU citizens. However, non-EU citizens must obtain a work permit to work in France.
The standard corporate tax rate is:
- if turnover is less than EUR 250 million – 26.5%
- if turnover is at least EUR 250 million – 27.5%
Value Added Tax (VAT)
The standard VAT rate in France is 20%. It applies to most goods and services.
Corporate tax returns are typically due by the second business day after May 1 of the year following the calendar year or within three months of the year-end for non-calendar financial years.
Late payments and filings are subject to a 10% penalty. If additional tax is payable due to a reassessment, the interest is 0.2% per month (2.4% per year).
In May of 2018, the General Data Protection Regulation (GDPR) came into effect in France. This regulation states that an employer should collect employee data for legal matters. Any disregard or infringement on GDPR statutes will result in severe penalties and fines of up to €1.5 million.
Anti-Bribery & Anti-Corruption Law
The anti-corruption law in France is known as the Sapin II Law.
The French Criminal Code has Articles 433-1 and 433-2 that define corruption as a crime. Furthermore, under Article L-233-3 of the French Commercial Code, Sapin II Law applies equally to parent companies and their subsidiaries and controlled entities. Penalties include a monetary fine.