international employment law firm alliance L&E Global

Starting a business in France

1. Introduction

Since 2017, France has been reforming its labour code to make the country more competitive in the global market. The reforms conducted by the President Emmanuel Macron’s government has tackled many of the difficulties that formerly concerned foreign entities looking at French opportunities. With this reform, French employment law is undergoing a major overhaul, in the name of three main principles: greater flexibility, less risk, and new rules and rights.

Flichy Grangé Avocats, operating in Paris (France), has, since its creation, built up a recognised expertise in employment and labour law issues with international ramifications. Our team, made up of lawyers from international law firms who are fluent in English, has been structured to meet the specific needs of multinationals. We would be delighted to have the opportunity to assist with your organisation’s expansion into France. We have created a comprehensive package of materials and training modules allowing any organisation to open quickly and, in a cost, effective manner while still ensuring compliance with French regulations and best practices.

2. Labour and Employment Law Requirements

a) Employer Policy Requirements

In order to be legally compliant, any employer operating in France is required by legislation to create and implement a number of employment policies.

There are a number of policies that employers should create. These policies will help an organisation manage employee relations and mitigate the risk of legal liability in the future.

  • Hold an official employee register (registre unique du personnel);
  • Elaborate a document identifying health and safety risks and preventive measures.

It shall also display:

  • the work schedule (horaire collectif) and any derogation to weekly rest;
  • the way the dates of leave are determined amongst employees;
  • how the employees can find within the company the applicable industry wide collective bargaining agreement and any company wide collective bargaining agreement, the document in relation to health and where applicable, the company’s internal rules;
  • the address of the labour doctor, the labour inspectorate, and the phone number of the so called défenseur des droits, a body in charge of protecting against discrimination and other breaches of liberties;
  • phone number to use in case of emergency (police, firemen etc.);
  • detailed prescription in case of fire;
  • prohibition of smoking and vaping;
  • a number of statutory information in relation to prohibition of sexual harassment, associated criminal sanctions and authority having a number of provisions prohibiting discrimination, protecting whistle-blower and provision in relation to gender equality.

When the workforce reaches 50 employees for at least 12 consecutive months, employers are required to implement:

  • company rules and regulations which include provisions about moral harassment, sexual harassment, health and safety rules, disciplinary rules; this document must be submitted to the works council (if any) and to the labour inspectorate;
  • whistleblowing proceeding, in accordance with E.U directive.

Furthermore, it is recommended to implement the following policies (in French):

  • guidelines on the use of professional IT equipment;
  • guidelines on the use of company cars if applicable;
  • internal memorandum on the reimbursement of professional expenses.

Any employer shall also make sure that it has a proper process to carefully monitor and follow up the employee’s working time, as French regulation remains quite protective in that respect.

Flichy Grangé Avocats is able to assist you in drafting these documents or adapting your own pre-existing documents to French employment law.

b) Employee Training Requirements

Employers are required to complete certain training activities. The following is statutorily mandated training that employers must provide.

Firstly, employers must ensure the adaptation of their employees to the evolution of their job position.

In this context, employers must provide actions aiming at:

  • ensuring the employees’ adaptation to their positions or linked to their evolution or continuous employment in the company;
  • enhancing the employees’ qualifications.

Secondly, employers shall organise every two years an individual professional interview which is conducted with the relevant employees. Its purpose is to consider opportunities for the employees’ professional evolution and the possible trainings that could help.

Thirdly, each employee has an individual training account (compte personnel de formation).

Each year, this account is automatically credited with training hours proportionately to the annual working time performed. Employers may also choose to credit supplementary training hours under certain conditions.

Employers participate in financing the employees’ training:

  • directly by financing training actions implemented;
  • indirectly by paying a contribution to vocational training funds. The contribution rates vary depending on the size of the company.

Flichy Grangé Avocats is accredited by the French administration to provide trainings in labour law that can be followed by your HR managers in the framework of the above training requirements.

c) Employment Agreements

Unless a collective bargaining agreement provides otherwise, a full-time indefinite-term employment contract does not need to be concluded in writing. It is however strongly recommended.

In any event a written contract is compulsory in some cases, for example with:

  • a fixed-term contract;
  • a part-time contract whether indefinite or fixed-term;
  • an apprenticeship employment contract or a “professionalisation” employment

In the absence of a written contract, these above contracts are irrevocably deemed to be indefinite-term contracts and oral part-time contracts are deemed full-time contracts.

3. Corporate Law Requirements

a) Compliance for Incorporation

1. Preparation for Incorporation

In order to incorporate a company in France, there are a number of steps and requirements that are needed to ensure legal compliance.

Firstly, the shareholders have to ascertain that the business of the company does not fall in the scope of a regulated activity. As an example, selling medicinal products or freight transportation are regulated activities. running a regulated activity is allowed but it may require from the managers and/or the shareholders to justify with the French administration of certain conditions as experience, qualification, honourability, or insurance policies, for example, prior to starting the business.

Then, the sole shareholder or the shareholders have to choose the legal entity that suits their needs. shareholders may adopt entity with limited (e.g. French “SARL”, “SA” or “SAS”) or unlimited responsibility (e.g., “SNC”, “Société Civile”). Depending on its form, a company may also present a smaller or a larger flexibility in its organisational and operating rules. As an example, the governance of a “Société par action simplifiée” (simplified joint stock company) is freely organised by the bylaws.

The shareholders must also choose the registered office of the company. They can rent or buy premises, but the registered office of the company may also be established at the personal home of the manager. If none of these possibilities is suitable, it is still possible to shift towards domiciliary companies.

When the form of the legal entity is decided and the registered office determined, the shareholders shall draft and sign (unanimously) the bylaws of the company which are a private deed. The bylaws determine the governing rules of the company and between the shareholders, within the flexibility allowed by the chosen form. In case the chosen form does not offer a suitable flexibility, it is still possible to organise such governing rules regarding the shareholders in a shareholders’ agreement which is private and confidential.

Finally, the contributions must be released. The contributions in kind are subject to an auditor’s report (in principle) while the contributions in cash are deposed on a bank account opened in the name on behalf of the company in course of registration. The deposit of the funds is observed by the chosen bank which issue a “certificat de dépôt” (deposit certificate).

2. Incorporation Registrations

To be recognised as a legal entity under French law, a company has to be registered with the registry of the commercial court.

For this purpose, the filing of the following documents is required:

• identification document of the managers (for the foreign manager – who are not European resident it is necessary to provide the registry with a resident permit);
• the managers declaration of parentage and non-conviction;
• the signed bylaws;
• the “certificat de dépôt” (deposit certificate) provided by a bank; and
• the proof of the regular occupation of premises (lease agreement, certificate of domiciliation at the manager’s personal home or domiciliation agreement with a domiciliary company).

It is also required to provide the registry of the commercial court with the designation of the beneficial owner (e.g. the natural person(s) who owned directly or indirectly a significant part – 25 % – of the share capital of the company).

Lastly, it should be noted that all these documents may be filed with one-stop shop in short times, especially since it is possible to proceed with an online filing.

b) Post Incorporation Registrations

Note that it is possible to operate in France as an employer without having incorporated a legal entity and even to employ a single employee from abroad. The choice between setting up a legal entity or not requires tax and corporate law analysis. If no legal entity is being set up, this would require a specific registration of the foreign entity vis a vis the French administration, including social security bodies. In practice, this would generally take at least 3 months before being able to hire the employee in France.

4. Payroll and Benefits Providers

In France, any employer must comply with minimum wages as defined by the law, and with all minimum wage and benefits as determined by the industry wide collective bargaining agreement, if any applies.

It must also implement health and contingency scheme meeting a minimum content of protection and contributions to be paid. This requires, before the first hire, to enter contracts with insurance companies. A broker may be appointed to assist in order to do so.

As to payroll management, most of the companies whose shareholder is abroad and have limited number of employees in France would outsource payroll and benefit responsibilities to service providers. This provider would generally make sure that the company is duly registered towards all mandatory bodies in charge of collecting dues, as well as the occupational doctor centre (mandatory).

We would be happy to recommend payroll providers to fit your business’s requirements.

Flichy Grangé Avocats continues to assist foreign corporations in structuring their entry and employment models in France on a day-to-day basis. Flichy Grangé Avocats is pleased to offer its services for all the required work identified above and assist your organisation in commencing its operations in France.

Any questions

Ask our member firm Flichy Grangé Avocats in France