France is one of the most attractive destinations in Europe for foreign investors and entrepreneurs.
Its strategic location, skilled workforce, and access to the European Single Market make it a gateway to the EU economy.
However, the creation of a company by a foreign national — whether resident or non-resident in France — must comply with specific legal and fiscal rules.
This article outlines the main legal principles, immigration requirements, and tax obligations applicable to foreigners wishing to establish a business in France.
I. The Legal Right to Establish a Business in France
Under French law, the freedom to conduct business (liberté du commerce et de l’industrie) applies to both French and foreign nationals.
Legal References
- Article L.122-1 of the Commercial Code – guarantees the freedom of commerce and industry.
- Article 1832 of the Civil Code – defines the company contract.
- Articles L.123-1 and following of the Commercial Code – govern registration in the Trade and Companies Register (Registre du commerce et des sociétés).
Accordingly, any foreign person, regardless of nationality, may incorporate, acquire or participate in a French company, subject to compliance with the applicable residence and tax regulations.
II. Conditions According to Residency Status
1/ Foreign Residents in France
Foreign nationals legally residing in France may establish a business provided their residence permit authorises professional or commercial activity.
Permits include, inter alia:
- “Entrepreneur/Profession libérale” residence permit (Article L.421-5 of the CESEDA);
- “Passeport Talent – Business Creator” residence permit (Article L.421-16 of the CESEDA).
Nationals of the European Union, the European Economic Area, and Switzerland are exempt from residence permit requirements and benefit from full freedom of establishment.
2/ Foreign Non-Residents
Foreigners not residing in France may incorporate a French company without residing in the country.
They may act as shareholders and even as company directors, provided that, if they exercise managerial functions in France, they comply with immigration laws (limitation of the duration of Visa for visit).
From a tax standpoint, non-resident companies established outside the European Union must appoint a French tax representative (représentant fiscal) when they carry out taxable operations in France (Article 289 A of the French Tax Code).
III. Choosing the Appropriate Legal Structure
The choice of company form depends on the investor’s objectives, liability concerns, and the desired governance model.
IV. Incorporation Procedure in France
Most incorporation steps can now be completed entirely online, subject to some previous formalities and requirements.
Main Steps
- Draft the Articles of Association (statuts) in French.
- Deposit the share capital in a blocked business bank account or with a notary – this means find a bank and pass the KYC process for Non-Resident Foreigners.
- Proceed to the registration (get all needed documents, including translated ID) of the company to get the Kbis extract, the official certificate confirming the company’s legal existence.
V. Taxation and Fiscal Obligations
1️/ Corporate Income Tax
Companies registered in France are subject to corporate income tax (IS) at the standard rate of 25 % (Article 219 of the French Tax Code).
2️/ Value Added Tax (VAT)
Most commercial operations carried out in France are subject to VAT (Articles 256 et seq. of the CGI).
3️/ Non-Resident Shareholders
Dividends, capital gains, or director’s remuneration paid to non-residents are taxable in France in accordance with international tax treaties (Articles 182 B and 119 bis CGI).
Where applicable, double taxation agreements may limit or eliminate French withholding tax.
Conclusion
Setting up a company in France as a foreigner is both legally possible and encouraged under French and European law.
The assistance of a French business lawyer is highly recommended to:
- Select the appropriate legal form;
- Ensure compliance with French tax and immigration law;
- Liaise with banks and administrative authorities during incorporation.