Topic 1 Steps & tips on how to set up a business in France / legal framework for starting up a business in France as a TCN

In order to be able to start a business in France, you must either hold :

  1. A residence permit
  2. Have the status of a refugee
  3. Be an EU citizen

Since the beginning of 2022, an unique formality center exists online in order to create any sort of business – regardless of activity or legal form: https://formalites.entreprises.gouv.fr/

This site facilitates the formalities of companies by transmitting their information to all the competent authorities in terms of formalities: INSEE’s register (The National Institute of Statistics and Economic Studies), Chambre des Métiers et de l’Artisanat (Guild of Arts and crafts), Mutuelle Sociale Agricole (Mutual Agricultural Fund), administration fiscale (financial administrator) or securité sociale (social security system). However, in order to allow the different organisations to adapt to this new system, a transition period is open until 2023, the date on which formalites.entreprises.gouv.fr will become the one and only counter to which all companies will have to carry out their formalities at the start of their activity.

There are 5 different business categories in France and each of them has their own registration center called the “CFE” (Centre de Formalités des Entreprises). These centers, in addition to registration services provide trainings, information and assistance to entrepreneurs. It is important to check to which category your business belongs and take advantage of the services these centers can provide.

  • Commercial enterprises
  • Craftsmen employing more than 10 employees
  • Micro-entrepreneurs exercising a commercial activity
  • Craftsmen employing less than 11 employees
  • Commercial enterprises carrying out a craft activity and employing less than 11 Employees
  • Micro-entrepreneurs carrying out a craft activity
  • Civil companies other than commercial
  • Liberal practice companies
  • Public industrial and commercial establishments (EPIC)
  • Commercial agents natural persons
  • Associations or joint ownership subject to commercial taxes
  • Non-professional furnished accommodation rental activities
  • Companies primarily engaged in agricultural activity
https://unsplash.com/photos/v9FQR4tbIq8

SETTING UP YOUR BUSINESS

  1. Create a business plan
  2. Decide on the category and business structure
  3. Take care of the financial aspects – open a bank account, ensure you have the necessary capital or micro-credit
  4. Take care of the necessary paperwork to register your business
  5. Receive the K-bis certificate, company ID number (SIREN/SIRET) and the VAT number
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Tips on creating a business plan

There are no definitive rules concerning what a business plan should contain, but some general topics include:

a synthetic presentation of your project, 1-2 pages maximum.

Another crucial chapter is defining why your skills and experience bring value for the project, and if you have a team, how they are complimentary.

  • Presentation of the products and services you wish to sell
  • Presentation of your business model: how your business creates and distributes value to its stakeholders
  • The strategy you have chosen to enter your market and develop your activity: the market segmentation, the choice of the product/market, the positioning taken in relation to the competition, as well as the marketing decisions you have made (product, price, distribution and communication policy).
  • The conclusions of your market study: explain the market in which you are in, detail the characteristics of potential customers, indicate who your direct or indirect competitors are, expose the possible risks related to your economic-legal-socio-professional environment, etc. as well as the strategy you will adopt: your position in regards with the competition, price policy, marketing…
  • An estimated turnover, relying as much as possible on tangible elements
  • The means to be implemented to achieve your sales forecasts: explain concretely how the company will operate with what and with whom?

It includes all the elements that translate the economic part into financial terms. Its composition will naturally depend on the sector of activity and the development potential of your project. Often this part consists of:

  • The table of investments: it indicates the purchase price of the investments, their planned date of acquisition, the accounting amortization period and the annual allocation of amortizations that they entail for each of the first three financial years.
  • The initial financing plan: it indicates the capital to be raised in order to be able to launch the project under good conditions.
  • The income statement for the first three years: it makes it possible to judge the future profitability of the new company.
  • The cash flow plan over 12 months
  • The calculation of the break-even point: it is important to know the turnover that the company must imperatively achieve to cover all of its expenses, and to determine the moment when this threshold (breakeven point) will be reached. Beyond that, the company begins to make profits.
  • The three-year financing plan: this table is necessary to assess the projected evolution of the financial structure of the company in the medium term, because a good financial structure is one of the conditions for the sustainability of new companies.

The presentation of the legal regime of the new company must be used to explain and justify the choice made, to present the distribution of capital and the resulting powers.

Do not forget to facilitate the reading of the business plan! It is generally placed at the beginning of the file, before or after the executive summary.    

This part must be the subject of a separate file to gather all the supporting documents and not to weigh down the business plan.

Once your business idea is clear and you are ready to launch, it’s important to choose the business structure and tax regime that fits the activity the best.

The two main types in France are:

  • A sole trader (Entreprise Individuelle (EI), micro-entrepreneur)
  • A company such as SARL, EURL, SA and SAS

It is important to do research into the different pros and cons of each structure and their associated taxing. Some factors to take into account include if you want to be in charge of your business, your turnover, protection of personal assets etc.

As a sole trader, you and the business are one legal entitity, meaning that your personal and professional assets merge. This legal structure is the one used for micro-entreprises and also as an EIRL (Entrepreneur of Individual Limited Liability) where your personal assets are separate. In both cases, you do business under your own name although you can take on a company or trade name.

The difference when creating a company is that it will be legally separate from you, and your personal assets are protected from the company’ creditors. A company must have its own name, address and a minimum of assets and its creation is more than complex than the creation of a micro-entreprise or an EI. Several legal formalities need to be undertaken, such as the writing of the company statuses and publishing legal notices. Also note that some activities are strictly regulated in France and need specific licences/insurance such as hairdressers, veterinarians, builders, etc.

Find out if the business you want to set up is regulated here: https://bpifrance-creation.fr/entrepreneur/activites-reglementees

As choosing your legal structure is a crucial step, don’t hesitate to look for guidance! Many associations and state organisms offer help, such as the CCI (Chambre de Commerce et Industrie) and and the ADIE association. There is also plenty of information available online and also books written about the subject.

If your French skills are sufficient enough, it is possible to participate in different trainings in Martinique where you can learn how to refine your business plan and get information about the legal procedures:

  • CCI Martinique (CCIM) – They offer a five-day training called “Cinq jours pour entreprendre”, costing about 500€

https://www.martinique.cci.fr/ccim-formation-reussir-creation.aspx

  • ADIE Martinique proposes different free online and face-to-face workshops

https://www.facebook.com/adie.martinique/

Bank loans

There exists two possibilities, the start-up loan Prêt à la Création d’Entreprise » (PCE) for up to EUR 7,000 or business loan called Prêts Bancaires aux Entreprises (PBE)

Pole Emploi / Region

If you’re enlisted as a jobseeker with Pôle Emploi, two interesting possibilities exist: the ACCRE and NACRE.

The ACRE « Assistance for business creators and buyers”  is a partial or total exemption from social charges for one year under certain conditions. It can be combined with the NACRE, which is an assistance in setting up the project of creating or taking over a business,  including financial structuring and starting up the activity. The assistance lasts 3 years and is managed by the region.

Micro-credit

ADIE – Association offering microloans up to 12 000€ and personalized help with your business creation.

https://www.adie.org/

  • Réseau Entreprendre Martinique

https://www.reseau-entreprendre.org/martinique/

  • Initiative Martinique Active

http://www.initiative-martinique.com/v1/

  • CCIM (Chambre de Commerce et Industrie Martinique)

https://www.martinique.cci.fr/

  • Association SME – Solidarité Migrants Entrepreneurs

https://smeasso.org

  • Association Singa

https://singafrance.com/en/

Visual from Canva