France Starting a Business Guide (Création d'Entreprise)
starting a business in France. The guide covers: the legal forms — the SAS (Société par Actions Simplifiée) — the most popular form for startups and medium-sized businesses: flexible governance, the president is the legal representative, share capital can be minimal (€1), no minimum capital requirement, the shareholders' agreement (statuts) can freely allocate powers; the SARL (Société à Responsabilité Limitée) — the traditional limited liability company: minimum 2 associates (max 100), the gérant is the manager, share capital of at least €1, the limitations on the transfer of shares to third parties; the EURL (Entreprise Unipersonnelle à Responsabilité Limitée) — the single-member SARL: one associate, the sole associate can be the gérant, limited liability; the SASU (Société par Actions Simplifiée Unipersonnelle) — the single-member SAS: one shareholder, the president, limited liability; the auto-entrepreneur (micro-entreprise) — the simplified regime for sole traders: no share capital, turnover limits of €188,700 (sales of goods) or €77,700 (services), simplified tax regime (the "micro-BIC" for business income or "micro-BNC" for professional income), the "prélèvement libératoire" (a percentage of turnover paid as tax), the social charges are proportional to turnover (approximately 12.3% for sales of goods, 21.2% for services, 23.1% for liberal professions); the registration procedure — the "guichet unique" (the single online portal at formalites.entreprises.gouv.fr since 2023 replaces the former CFE (Centre de Formalités des Entreprises)); the registration fees — approximately €50–€100 for the registration (the "immatriculation au RCS" or "Répertoire des Métiers"); the publication of the incorporation notice in a legal gazette (the "avis de constitution dans un journal d'annonces légales" — approximately €120–€200); the business bank account — required for all companies (except the auto-entrepreneur who can use a personal account for business transactions); the tax regime at creation — the company chooses between the Impôt sur les Sociétés (IS) — corporate tax at 15–25% — and the Impôt sur le Revenu (IR) — the "régime des sociétés de personnes" — for the first 5 fiscal years, a new company can opt for IR if it meets certain conditions (the "option pour l'IR" is available for SARL de famille, EURL, SASU); the social security for business owners — the Sécurité Sociale des Indépendants (SSI) — the social security scheme for self-employed persons: the health insurance (assurance maladie), the retirement contributions (assurance vieillesse), the family allowances, the contributions are based on the professional income; the **TVA registration** — mandatory if turnover exceeds €91,900 (goods) or €36,800 (services); the business must mention its SIRET number and the TVA number on invoices from the first invoice.
France has simplified business creation significantly with the guichet unique portal. All amounts in Euros (EUR). For related reading, see our Corporate Tax Guide →, VAT Guide →, and Hiring Employees Guide →.
Legal Forms — Comparison
- SAS — most flexible: The SAS (Société par Actions Simplifiée) is the most common form for growth companies: (a) no minimum share capital, (b) the president can be a legal entity or an individual, (c) the shareholders' agreement can allocate veto rights, preferential rights, and governance rules very flexibly, (d) shares can be freely transferred unless the statuts restrict them, (e) the SAS must have at least one shareholder (for the SASU). The SAS is subject to corporate tax (IS) by default, but can opt for IR for the first 5 years.
- SARL — traditional: The SARL (Société à Responsabilité Limitée) is the traditional French company: (a) minimum 2 associates, maximum 100, (b) the gérant manages the company — the gérant can be an associate or a third party, (c) transfer of shares to third parties requires the approval of the majority of associates (the "agrément"), (d) the SARL is subject to corporate tax (IS) by default, but can opt for IR (the "option pour le régime des sociétés de personnes") under certain conditions.
- Auto-Entrepreneur — simplest: The auto-entrepreneur (micro-entreprise) is the simplest form: (a) no share capital, (b) no accounting beyond a simple revenue log (the "livre des recettes") and an expense log (the "registre des achats"), (c) the social charges are calculated as a percentage of turnover, (d) the tax can be paid as a percentage of turnover (the "prélèvement libératoire") if the household income is below certain thresholds, (e) turnover limits: €188,700 for sales of goods, €77,700 for services.
Tax Regimes for Startups
- Option for IR (Impôt sur le Revenu): A new company can opt to be taxed under the personal income tax regime (IR) for the first 5 fiscal years. This means the company's profits are taxed in the hands of the shareholders (or the sole shareholder) at the progressive IR rates. This can be advantageous in the early years when profits are reinvested. The option must be exercised within the first 3 months of the fiscal year.
- Corporate tax (IS): Most companies default to the Impôt sur les Sociétés at 15% (first €42,500 of profit) and 25% (above). The IS regime allows the company to retain profits for reinvestment and provides the benefit of the participation exemption (régime mère-fille).
For the registration procedure, see the guichet unique portal at formalites.entreprises.gouv.fr. For the social security contributions for business owners, see our Social Charges Guide →.