How to start a business in France: tips for Russian entrepreneurs

Overview of the principle

In the French business environment, the principle of "laisser passer, laisser faire" (which can be translated as "let it pass, let it be done") has been actively in place for a long time. This approach contributed to France securing the second position in the global ranking for attracting foreign direct investment by the end of 2005, according to data provided by the French agency that deals with foreign capital.

Business organization in France

In this article, we will explore how to organize your business in France and in which sectors Russian entrepreneurs can achieve successful results. Opinions on this matter are expressed by Alexander Kolosovsky, a lawyer from the Paris Bar Association, co-founder of the Franco-Russian Lawyers Association, and manager of the Paris office of International Legal Counsels.

Legal forms for conducting business

In France, there are many legal forms of business operations that significantly exceed their Russian counterparts. However, the most common options remain:

• Limited Liability Company (LLC);
• Joint Stock Company (SA), both closed and open type.

Of all the available forms, SARL is the most sought after, as the registration process has been significantly simplified since 2004. Currently, to establish it, only a nominal minimum share capital of one euro is required. However, to cover initial expenses, it is recommended to deposit at least 500 or 1000 euros into the account.

The procedure for creating a joint-stock company

The procedure for creating a joint-stock company (SA) involves a more complex set of requirements.The minimum amount of the charter capital is at least 37,000 euros.. At the time of registration, half of this amount must be paid at the time of registration and the remainder must be paid during the first financial reporting period. It should be noted that the funds placed in the authorized fund will be available for use as working capital after registration.

At the end of the year, it is necessary to provide financial statements; if the authorized capital decreases by more than 50% by the end of the reporting year, this may lead to compulsory liquidation by the commercial court, although such cases are extremely rare.

Restrictions for foreign investors

For foreign investors in France, there are virtually no serious restrictions, except for some specialized areas where a license is required to operate, for example:

• jurisprudence;
• Medicine;
• Education.

It is also worth considering that when transferring technologies in strategically important sectors, additional permits or licenses may be required. Although France is known for its bureaucracy, in practice, there are relatively few obstacles to doing business here. The main principle is that foreigners are allowed to do everything as long as they adhere to the established rules.

A simple way to start a business in France

For Russian citizens, the simplest and most popular way to start a business in France is to open a representative office. In this case, there is no need to create a separate legal entity; it is enough to provide a certificate of registration of your company in Russia or another country and have a legal address in France.

This approach allows for minimizing costs and quickly starting operations in a new market, which is especially relevant for entrepreneurs aiming to expand their business. Thus,the French market offers many opportunities for foreign investorsCompliance with local laws is the key to stable and successful business operations.

Establishing a representative office

In the process of establishing a representation in another country, it is important to actively engage in building business connections and assessing the current market situation. Deals can be made both with organizations located in Russia and with foreign companies.

It is worth noting that a representative office, as well as the legal entity that established it, are exempt from tax obligations if their activities are not of a commercial nature in France. However, it is essential to take into account how this concept is interpreted by local laws, for which it is advisable to consult a professional lawyer in this field.

Business management

To establish a fully-fledged business in the country, it is necessary to attract a local manager or co-founder who can legally work in France or in one of the EU countries and has no legal restrictions. Alternatively, you can also manage your company on your own.

Obtaining a license

If you decide to take on the role of a manager, you will need to obtain a special license for conducting commercial activities - a carte de commercant. This card can be obtained either individually through the French consulate in Russia or simultaneously with a residence permit.

Submitting an application to the consulate

If the upcoming business launch involves submitting an application to the consulate, you will initially need to obtain the following documents:

• The legal address of your company in France
• The charter of your company
• Founding agreement

After that, it is important to appoint a director and formalize this decision properly, as well as get approval from the bank to open a current account.

Contacting the consulate

French government institutions are understanding towards requests made to consulates, which simplifies the process of obtaining information about your company and creates an atmosphere of trust. The consulate can arrange a personal meeting with representatives of your company, request the necessary data about its activities in Russia, and its current operations.

It is important to note that anyone interested has the opportunity to accumulate funds and start a business in France, even if they do not have a registered legal entity in Russia.

Residence permit

If you also need to obtain a residence permit, this process takes place directly in France. The Ministry of the Interior and the local prefecture are responsible for its organization. To obtain a permit for commercial activities, you will need to register with the Chamber of Commerce, which will assess the viability of your business plan and the necessity of your presence in the market.

Psychological and administrative obstacles

Generally, if your project does not intend to take jobs away from French citizens, there are no significant obstacles, either administrative or psychological. This is especially relevant in cases where your business plan includes the creation of jobs for local residents.

Documents for starting a business

It is important to remember that starting a business in France requires gathering a complete set of documents, which can be submitted through a trusted representative or in person, after obtaining a visa in advance.

Issuance of a commercial card with the right to reside

A commercial card with the right to stay in the country requires not only a set of additional documents, but also a valid passport and a visa for long-term stay ("long séjour"), the period of which does not exceed three months. It is also possible to buy a share in an existing business or purchase an entire enterprise.

If you have the necessary financial resources, it is better to consider the option of acquiring a company that already has a positive credit history and an established reputation in the market.

Experience of successful companies

From my professional experience, it is safe to say that significant results were achieved by those companies that focused on exports, alcoholic beverages, software development, as well as real estate, travel services and transportation solutions. They provided financial and legal advice to foreign clients seeking to develop their businesses in Russia and the CIS.

The potential of the tourism industry

Tourism is a vast field with enormous potential for profit. For example, the restaurant business can become a very lucrative direction:

• Russian restaurants are virtually absent in France.
• Initial investment in this area can quickly yield significant returns.

Interest in the wine industry

Interest in the wine industry is steadily increasing, especially in the context of the crisis in French winemaking. This sector attracts attention not only from Russians but also from the British, Americans, and Dutch. If the issue is addressed too late, valuable opportunities may be missed.

The wine industry is sensitive to changes.Local investors may find themselves in a more advantageous position in certain cases. However, entrepreneurial opportunities are available everywhere.

Traditional business lines

Traditional business areas include:

• Construction
• Real estate trading
• Supermarkets
• Consulting services
• Assistance to French companies in finding outsourcing solutions in Russia
• Marketing services
• HR
• Software development
• The organization of online stores
• The beauty industry

Unusual business niches

Moreover, interesting business niches can also be found in less obvious areas, such as:

• Antiques trade
• Works of art
• Various specialty stores

Even ordinary rural specialists, such as hairdressers or bakers, may be interested in the opportunity to attract Russian investors for their projects.

Success of Russian companies on international markets

It should also be noted that some Russian companies are successfully presenting their IT products in international markets, including France and other European Union countries. This applies to:

• Antivirus programs
• Video games
• Other innovative developments in the field of information technology and the internet

There are food products and art objects that may be in demand in foreign markets.

Reasons for troubles in the market

Problems in the market often arise from poorly thought-out steps, such as:

• Lack of proper regulation in relationships with partners
• Untimely submission of reports and audiences
• Non-compliance with standards for conducting business transactions
• Ignoring financial reporting requirements

Sometimes, property rights in the field of intellectual or industrial property are registered incorrectly, allowing competitors to copy products or developments. In the most severe cases, this can lead to the closure of a business if questionable schemes take precedence over honest and transparent activities.

Conclusion

In conclusion, it can be said that the principle of "laisser passer, laisser faire" continues to be the foundation of the French economy, creating favorable conditions for foreign investors, including Russian entrepreneurs. As I noted in the article, France holds a respectable position in the global market for foreign direct investment, which attests to its attractiveness for business.

Available legal forms

Number of available legal forms, such as limited liability company (SARL) and joint-stock company (SA), provides flexibility in choosing a structure for doing business. Simplified company registration procedures make market entry even more accessible, which should inspire Russian businesses to expand their operations in this country.

Bureaucratic obstacles

Moreover, the lack of significant bureaucratic obstacles, except for certain licenses in specific areas, creates a positive image of France as a place where one can start and grow a business.

Knowledge of local laws

Of course, for successful business operations in another country, a key factor remains the knowledge of local laws, customs, and cultural nuances. I strongly recommend consulting local experts, such as lawyers and consultants, who can help avoid potential pitfalls and make the process more efficient.

Opening of a representative office

Overall, opening a representative office or starting your own business in France is a real opportunity for Russian entrepreneurs looking to broaden their horizons and take advantage of the benefits offered by the French economy. Success in this area is possible if approached with the right seriousness and preparation.

I hope that the information presented in this article will be useful and inspire many to embark on new ventures in a country that is so open to collaboration and innovation.