With a highly skilled workforce, strong economy, and access to the European market, France is a popular choice for companies looking to hire remote talent.
But while hiring in France can be an appealing option, it’s also complex. To employ workers in France directly, you’ll need to establish a legal entity and comply with French employment, tax, and social security laws.
Setting up a legal entity in France requires time, expertise, and ongoing administrative support. For some companies, especially those hiring just a handful of employees, opening an entity may not be the best option. Working with an Employer of Record (EOR) can be a more straightforward and cost-effective approach.
Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources or qualified professionals.
Key takeaways:
- Setting up a legal entity in France involves multiple regulatory steps and can be a lengthy process.
- Choosing the legal structure is of key importance, as it impacts taxes, governance, and administrative complexity.
- A legal entity in France has ongoing compliance requirements, and much of the documentation needs to be in French.
What You Should Know Before Creating a French Legal Entity
Setup can take anywhere from several weeks to several months, depending on the type of entity you’re creating. Companies should be prepared for various hurdles, including significant upfront costs and ongoing compliance obligations.
If you don’t speak French, the language barrier can also slow down the process. To begin with, all legal documents must be in French, which will likely require additional time and expense to have everything translated.
You'll also interact with multiple government agencies, which may necessitate support from local experts.
Before opening a French entity, companies should consider whether they have the necessary internal resources to manage the process. The time and cost investment are usually only justified if there is a long-term commitment to hiring in France.
Choosing the Right Legal Structure for Your French Entity
France offers several business structure options, each with differing implications for liability and taxes. The best choice for your company will depend on your:
- Business model
- Employee headcount
- Risk tolerance
Société à Responsabilité Limitée (SARL)
A SARL is common for small and mid-sized businesses with more than one owner. It’s a limited liability company, which protects the personal assets of shareholders. SARLs require at least one director and can have up to 100 shareholders.
However, because they can have multiple shareholders, SARLs are more complicated than other entity types. You’ll generally pay corporate income tax, but a SARL can opt for partnership taxation, which is effectively a personal income tax.
A SARL must appoint a gérant, who is legally responsible for running the company.
Société par Actions Simplifiée (SAS)
A SAS is a simplified joint stock company. It’s one of the most popular structures for startups and international companies expanding into France, and offers flexibility in how the company is governed and structured.
At least one director manages a SAS company, and if the company has more than 20 employees, it must also appoint an auditor. The administrative costs of a SAS can be substantial, thanks in part to the requirement to audit and publish financial statements annually.
Branch Office
A branch office is not a separate legal entity. Instead, it operates as an extension of its parent company.
While this reduces the setup requirements, it also exposes the parent company to liability for French operations. Branch offices are typically used for short-term market testing or as a first step in forming a different type of French entity.
Setting Up a Legal Entity in France: A Step-by-Step Guide
Below are the steps required to establish an entity in France. This list is not exhaustive, and the process and order may vary depending on your specific business needs.
Step 1: Reserve and Register Your Company Name
First, you’ll need to select a company name and verify its availability through the Institut National de la Propriété Industrielle (INPI) and the Commercial Court Registry.
If the name doesn’t conflict with an existing company name, a certificate of reservation will be issued. Name verification typically takes several days, assuming there are no conflicts.
Note: You may also want to claim the business name as a trademark, but this isn’t required.
Step 2: Prepare Articles of Association (Statuts)
The Articles of Association (statuts) is a document that defines how your company operates. It must include an Objects Clause, or l’objet social, which describes the company’s purpose and intended business activities. The Articles also outline the ownership structure, the amount of share capital, and the rights and obligations of the members.
This document must be included with your company registration. If you make changes in the future, you’ll need to file formal amendments. To ensure your documents meet all legal requirements, it’s advisable to consult with a legal representative who specializes in French law.
Step 3: Open a Corporate Bank Account
Opening a French corporate bank account is one of the most common bottlenecks in the process. Banks have strict know-your-customer (KYC) requirements and may require in-person verification, which can make the approval timeline quite slow.
You’ll need to deposit the minimum share capital required by the entity type. The money remains frozen until your entity registration is complete. Once the account is open, you’ll receive a certificate confirming the deposit, which you’ll need to include with your registration paperwork.
Step 4: Register With the Centre de Formalités des Entreprises (CFE)
Next, you’ll submit your registration through the Centre de Formalités des Entreprises (CFE). The CFE coordinates filings with tax authorities, social agencies, and commercial courts.
There are several registration centers within CFE, depending on the nature of your business. For example, commercial sales entities must work with the Registre de Commerce et des Sociétés (RCS) and the Chambre du Commerce et d'Industrie (CCI).
Required documents typically include:
- Articles of Association
- Proof of address
- Bank deposit certificate
- Identification for the business’s directors
Fees can vary depending on the business, but can range from a few hundred euros to more than EUR 1,500 if you require help from a local professional. Processing times can take several weeks.
Step 5: Register for Tax and Social Security
Once incorporated, companies must register with the Direction Générale des Finances Publiques (DGFiP) for corporate income tax. If applicable, you also need to obtain a VAT (Value Added Tax) number. VAT numbers are required for most businesses involved in economic activity in the EU.
You must also register with the Union de Recouvrement des cotisations de Sécurité Sociale et d’Allocations Familiales (URSSAF), the French social security collections agency. You’ll also need to manage withholdings and remittance of social security obligations for employees.
Step 6: Receive the SIREN Number and KBIS Extract
Next, your company will receive a SIREN number, which serves as the official identifier for the business. You’ll also obtain a KBIS extract, which serves as legal proof of the company’s existence.
Banks often require the KBIS extract before they finalize the opening of your account. As a result, the entire process to open a bank account for foreign-owned companies can take weeks.
Step 7: Provide Background on Key Executives and Directors
French authorities require detailed disclosures about company leadership. These include residency status and visa information. Your company also needs to provide identification for all directors and shareholders, such as passports or national IDs.
Incomplete or inconsistent information can cause registration delays.
Ongoing Compliance Requirements
Entity setup is only the beginning. A French company must comply with ongoing obligations, including:
- Annual financial statements
- Corporate income tax filings
- Documented board meetings
- Payroll administration and reporting
- Social contributions and employee benefits
All accounting documentation must be in French.
France is also home to a complex social contribution system that requires payments from both employers and employees, alongside robust labor laws that provide strong worker protections, including limits on working hours, mandatory paid leave, and termination procedures.
Common Challenges Companies Face When Opening an Entity
To sum up, the hurdles companies often encounter when expanding into France include:
- Difficulty opening bank accounts
- Navigating French labor laws and employment protections
- Managing social contributions and mandatory benefits
- Administrative bureaucracy and slow processing times
- Language barriers for legal and tax documentation
- Complying with local reporting and tax requirements
These challenges can quickly become operational risks, as failure to comply can result in legal consequences, fines, or other penalties.
When to Open a French Legal Entity
Opening an entity in France makes sense if your company has a long-term commitment to operating in the country. If you plan to build a sizable local team or establish a permanent presence, you may benefit from having your own entity.
An entity can also be the right choice if your business wants complete control over employment relationships, taxes, or intellectual property ownership within the country. You may also need to establish your own French entity if you operate in specific industries or have clients that require a locally registered company for invoicing or business transactions.
Establishing an entity also means having the ability to manage and operate it. You’ll need legal, HR, payroll, and accounting support, along with a solid understanding of French regulations, which can be achieved by either hiring in-house expertise or partnering with external firms. Without that infrastructure, the ongoing compliance burden can quickly become overwhelming.
Escape the Administrative Maze: Hire French Workers With an EOR
France is known for its bureaucracy. The business registration process is complex, and different steps can cause delays.
Partnering with an Employer of Record removes the need to establish a local entity. The EOR becomes the legal employer of your French employees, while you retain day-to-day management of their work.
An EOR handles:
- Local payroll and taxes
- Social security contributions
- Benefits administration, including health insurance
- Employment contracts and onboarding
- Compliance with French labor laws
This approach is ideal for companies testing the French market or those that want to hire a few local employees without the long-term commitment of establishing a legal entity.
How RemoFirst Supports Hiring in France
RemoFirst is an Employer of Record (EOR) that helps companies hire employees compliantly in France and 185+ other countries. With RemoFirst, you can onboard employees, run payroll, and offer benefits — all without establishing a local entity.
RemoFirst’s compliance-first approach reduces your risk while maintaining flexibility. With transparent, flat-rate pricing, it’s easy to forecast costs as your team grows.
Book a demo to see how RemoFirst can help you employ top talent in France, or anywhere, without the complexity of entity setup.
