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How To Register As An Employer In A New Market: Key Requirements For France



How To Register As An Employer In A New Market: Key Requirements For France

Entering the French market has significant prospects for enterprises, and the procedure is more straightforward than many anticipate. Comprehending the essential procedures from the outset is crucial for a seamless transition. Equipped with the appropriate expertise and resources, organizations may successfully traverse this trip, optimizing their engagement with France’s evolving business landscape.


Businesses can establish their presence in France through digital platforms such as eBranch, without the necessity of a local corporation or intricate intermediaries. International enterprises can effectively fulfill regulatory obligations and conduct operations remotely using a virtual office service. This method streamlines the procedure, enabling organizations to conserve time and resources while maintaining adherence to French legislation.


The primary advantage of entering the French market is that businesses can commence operations without the necessity of a PEO. The process of registering as an employer and overseeing employee-related responsibilities is uncomplicated and may be efficiently managed through digital platforms. This guide delineates the specific requirements, offering a concise and pragmatic framework for entering the French market.


Legal Entity Registration


Setting up a legal entity in France is an exciting step in expanding your business. Let’s break down the process with the essential information you’ll need for a smooth registration.


Choosing a Business Structure


The French market offers several business structures, each with its advantages depending on your company size and needs. Here’s a breakdown of the most popular options:


Structure Type

Best For

Minimum Capital

Number of Partners

SARL

Small/Medium Business

€1

2-100

EURL

Solo Entrepreneurs

€1

1

SAS

Flexible Management

No minimum

2+

SASU

Single Shareholder

No minimum

1

The SAS structure is particularly favorable for international companies due to its flexibility, making it easier to adapt as the business grows.


Drafting Articles of Association


When setting up your legal entity, your Articles of Association outline the fundamental rules for your company’s operations. Be sure to include the following:


Key Element

Description

Company Name and Purpose

Clear identification of your company and its objectives

Registered Office Address

Your official business address in France

Share Capital Amount

The total capital your company will begin with

Management Structure

Who will manage the company (e.g., directors, executives)

Decision-Making Procedures

How decisions will be made (voting rules, meetings)

Shareholder Rights & Obligations

Rights and duties of shareholders

These documents must be drafted in French, so having legal assistance can help ensure everything is accurately reflected.


Opening a Corporate Bank Account


Once your company structure is in place, the next step is opening a corporate bank account. This account is essential for all your financial transactions. To open the account, you’ll need to provide:

Required Documents

Description

Draft Articles of Association

Proof of your company’s legal structure

Proof of Identity for Directors

Identification documents for all company directors

Initial Capital Deposit

Deposit the share capital in a French bank

Business Plan

Your business plan, either in French or English

After completing this step, the bank will issue a Certificate of Blocked Capital. This certificate is essential for finalizing your company registration.


While the registration process may seem detailed, businesses can complete the entire procedure in a matter of weeks with the proper documentation. Preparation and a clear understanding of the steps are key to ensuring your French entity registration goes smoothly.


Employer Registration With Authorities


Once your legal structure is set, the next exciting step is getting your business officially registered with French authorities. Let’s break down the process of registering as an employer in France and ensuring your company is fully compliant.


Registering with URSSAF


The first authority you’ll interact with is URSSAF (Union de Recouvrement des Cotisations de Sécurité Sociale et d'Allocations Familiales). This is the French social security and family allowances collection service. If your company doesn’t have a physical establishment in France but hires employees in the country, you will need to register with URSSAF’s Foreign Companies service.


Registration Steps:

Step

Action

1

Create your personal space on urssaf.eu

2

Complete the EO form (Employeur d'Origine)

3

Wait for confirmation from URSSAF

4

Set up your declaration system

As of March 2024, you no longer need a social representative for most sectors, except for the pharmaceutical industry!


Obtaining a SIRET Number


The SIRET number is essential for your company’s identification in France. It’s a 14-digit number that proves your company’s legal existence. Each of your company’s locations, such as offices or establishments, will have its own SIRET number.

SIRET Components

Details

First 9 digits

Your SIREN number, which identifies your company

Last 5 digits

Unique establishment identifier, specific to each location

Your SIRET number will be automatically generated after registration and can be found in your personal space on the business formalities portal.


Social Security Registration


Now, let's focus on your employees' social security registration to ensure they're covered. This step is crucial for providing necessary protections and benefits.


Required Documentation:

Document

Description

Employee Identification Proof

A copy of the employee’s identification document (passport, national ID)

Work Authorization

For non-EU citizens, proof of authorization to work in France

Employment Contract

The signed agreement between employer and employee

Pre-Hiring Declaration (DPAE)

Declaration that must be submitted before the employee begins working (must be done within 8 days)


The DPAE is a convenient tool because it allows you to handle multiple registrations (social security, occupational health services, etc.) at once.


For international employees holding a passeport talent, there’s a fast-track registration process. Simply visit immatriculation-travailleurs-etrangers.ameli.fr for a streamlined process.


Once registered, you’ll need to manage:


  • Monthly/Quarterly Social Security Contributions

  • Employee Healthcare Coverage

  • Mandatory Occupational Health Service Registration


Insider Tip: After registration, wait 72 hours before joining the TFE (Titre Firmes Étrangères) service to ensure everything is processed correctly.


Tax Obligations


Now that your company is registered, it's time to dive into the world of French taxes. While taxes might seem daunting at first, understanding them is key to ensuring your business operates smoothly and remains compliant.


Corporate Tax Registration


The good news is that France's corporate tax system is relatively straightforward. The standard corporate tax rate is 25%, but here's an exciting twist: if your annual turnover is under €10 million, you'll only pay 15% on your first €42,500 of profit. This makes it more affordable for smaller businesses to grow and succeed.


Here’s a breakdown of the corporate tax rates:

Company Size

Tax Rate

Applicable To

All Companies

25%

Standard Rate

Small Companies

15%

First €42,500 of Profit

Large Companies

+3.3%

Surtax on Amounts Over €763,000


The fiscal year in France can be customized to fit your business cycle, so choose a 12-month period that works best for your operations.


VAT Registration


In France, VAT (Value Added Tax) is essential if you're selling goods or services. The standard VAT rate is 20%, but there are reduced rates depending on the type of product or service you offer:


  • 10% for certain food items and transport services

  • 5.5% for essential items such as books and medicine

  • 2.1% for specific publications


For EU companies, VAT registration is required once sales exceed €35,000 in France. However, with services like eBranch, businesses can manage VAT obligations smoothly, even without a local entity in France.


Withholding Tax Requirements


Withholding tax obligations are an important aspect of managing employee salaries in France. Starting in January 2023, there have been updates to how withholding tax is applied to employees. Here’s what you need to know:


Monthly Obligations:


Obligation

Deadline

Description

Social Security Declarations

5th or 15th

File through DSN for social security-affiliated employees

Non-affiliated Employees

5th or 15th

Use PASRAU system for non-affiliated employees

Annual Obligations:

Obligation

Deadline

Description

Annual Pasrau Submission

February 10th

Report net taxable amounts for each employee

If you're using a virtual office to manage operations, you can still handle all of your tax and withholding obligations online, without needing a physical presence in France. This makes compliance easier, saving you time and resources.


Late payments or filings can lead to penalties: 5% for late payments and 10% for late filing. Proper planning is key to avoiding these penalties, ensuring everything stays on track.


Understanding your tax obligations can seem like a lot, but with the right systems in place and the proper support, managing taxes in France will be a seamless part of your business operations.


Employment Contracts And Labor Laws


Now it's time to dive into the important topic of French employment contracts. Setting up clear, comprehensive agreements ensures both your business and employees are on the same page.


Key Contract Elements


French employment contracts are formal and must be written in French (yes, even if your employee is fluent in English). The French version of the contract holds legal weight in case of any disputes. Here are the main contract options:

Contract Type

Best Used For

Duration

CDI (Permanent)

Long-term hires

Indefinite

CDD (Fixed-term)

Temporary needs

Max 18 months

While providing translations can be helpful, the French version always takes precedence in legal matters.


Working Hours and Leave


France is famous for its focus on work-life balance, and their labor laws reflect that. Here are the key working hour guidelines:

Work Condition

Details

Standard Workweek

35 hours per week

Daily Limits

Maximum 10 hours per day

Weekly Maximum

48 hours maximum per week

Rest Periods

20 minutes break every 6 hours of work

Annual Leave

5 weeks minimum per year

Overtime Rules: Overtime is paid at a 25% bonus for the first 8 extra hours, and 50% for any overtime beyond that.


Minimum Wage Requirements


As of January 2024, the SMIC (minimum wage) in France is €11.65 per hour. Here's how it breaks down for monthly calculations:


Calculation

Amount

Monthly Salary

€1,766.92 gross for a 35-hour workweek

Includes

Basic salary and some bonuses

For skilled employees, it’s common to offer 20-30% more than the SMIC to remain competitive in the market.


French labor laws are designed to ensure fair treatment of employees, and understanding them is critical to running a compliant and successful business. By using services like eBranch, managing these requirements is a breeze, even without a local entity.


Important Reminders:


  1. Always get contracts in writing.

  2. Stick to the 35-hour workweek.

  3. Ensure salaries are above the SMIC.


French employees enjoy a "right to disconnect," meaning they cannot be contacted for work after hours—no midnight emails allowed!


Social Security Contributions


The French social security system is an essential part of doing business in France, and understanding how it works can help ensure compliance and smooth operations for your company. This system is known for being comprehensive, offering employees a variety of benefits, from health care to old-age pensions, and businesses must make contributions on behalf of their employees.


Types of Contributions


The French social security system involves several types of contributions, each with its own share for both employees and employers. Here's a detailed breakdown:

Contribution Type

Employee Share

Employer Share

Health & Maternity

-

13% or 7%

Old-age Insurance

6.9%

8.55%

Family Benefits

-

5.25% or 3.45%

Unemployment

-

4.05%

Supplementary Pension

3.15%

4.72%

The French social security system is so intricate and far-reaching that it’s often compared to Swiss watches in terms of complexity and precision!


Calculation Methods


Calculating your contributions is based on salary brackets and other specific conditions:


Salary Brackets


  • Bracket 1: Up to €3,864 monthly

  • Bracket 2: €3,864 to €30,912 monthly


Special Considerations


  • CSG (Social Security Surcharge): 9.2% on 98.25% of the gross salary.

  • CRDS (Social Security Debt): 0.5% on 98.25% of the gross salary.


These contributions are calculated automatically using eBranch services, simplifying the process and ensuring accuracy.


Payment Procedures


Even without a local entity in France, managing social security contributions is possible through a streamlined process. Here's how it works:


Monthly Requirements


  • Submit declarations by the 5th or 15th of each month.

  • Payments are made through the URSSAF online platform.

  • It's important to keep detailed records of each employee’s contributions for transparency.


Smart Savings Alert: If your employees earn less than 2.5 times the minimum wage, you may qualify for a reduced health contribution rate of 7% instead of the standard 13%. This is a great way to save on social security expenses.


International Agreements


For businesses expanding from the United States to France, there’s an agreement in place that allows companies to contribute to only one social security system (either in the US or France), not both. To qualify, you will need to request a certificate of coverage (form SE 404-2) to prove your exemption from paying into the French system.


Supplementary Pension System


In addition to the basic social security system, the supplementary pension system is managed on a points-based system:


  • Employer contribution: 60% of the total pension contribution.

  • Employee contribution: 40% of the total pension contribution.

  • Points system: Contributions accumulate yearly based on the amount paid, which eventually impacts the pension benefits employees will receive.


Insider Tip


Setting up automatic payments through your French business bank account can save you time and ensure that payments are made on time. It’s a great way to keep your social security obligations in check without missing deadlines.


Using services like our virtual office solution ensures that you're 100% compliant with French social security regulations, even without a local entity or PEO. By handling your contributions efficiently, you can focus on growing your business while staying on top of your legal obligations!


Ongoing Compliance and Reporting


Running a business in France requires staying on top of compliance and reporting obligations. Proper management of these responsibilities ensures smooth operations, helping your company avoid penalties and maintain a positive relationship with French authorities. Here’s everything you need to know about reporting in France.


Monthly/Quarterly Declarations


The Déclaration Sociale Nominative (DSN) is your primary tool for submitting monthly and quarterly reports about your employees. The DSN covers everything related to employee wages, working hours, social security contributions, and income tax withholdings.


When to File:


Company Size

DSN Deadline

Payment Due

50+ employees

5th of the next month

5th of the next month

Under 50 employees

15th of the next month

15th of the next month

Using services like eBranch ensures timely reminders and simplifies the filing process.


What to Include in the DSN:


  • Employee wages and working hours

  • Social security contributions

  • Income tax withholdings

  • Health insurance details


Annual Tax Filings


The Corporate Tax Return is due annually and is critical to keeping your business in good standing with the French authorities. Here's the breakdown for the tax filing process:


Corporate Tax Return Details:


  • Due date: May 31st (for companies with a December year-end).

  • Four quarterly installments are required, with the final installment due in December.

  • Companies must pay 95-98% of their estimated tax by the final installment.


Payment Schedule for Corporate Tax:

Date

Installment

March 15th

First installment

June 15th

Second installment

September 15th

Third installment

December 15th

Final installment


Companies with revenues under €250 million can enjoy more flexible payment terms.


Labor Law Updates


2024 brings exciting updates to French labor laws that affect businesses:

New Minimum Wage (as of January 2024):

Wage Type

Amount

Hourly

€11.65

Monthly

€1,766.92 (based on 35 hours)

Key Changes to France Travail (formerly Pôle emploi):


  1. New Coordinated Employment Services: More streamlined support for employees and employers.

  2. Simplified Support for Disabled Workers: Enhancements in worker support.

  3. Job Seeker Monitoring: Improved tracking of job seekers’ progress.


Registration Requirements:


  • All businesses must comply with new registration regulations by July 2025.

  • New employment contracts for job seekers and a 15-hour weekly activity commitment will be mandatory.


Foreign Company Registration (Starting March 2024):


  • Foreign companies without a French establishment must now register with the French Company Formalities Office. The good news is, businesses won’t need to use a third-party representative anymore.


Penalties to Avoid


It's crucial to ensure that all filings and payments are made on time to avoid penalties:

Violation Type

Penalty

Late payment

5% penalty + 0.2% monthly interest

Late filing

10% penalty

Tax reassessment over €100,000

Potential criminal proceedings

Using a virtual office service can help you stay on top of deadlines and avoid penalties.


2024 Compliance Calendar


Month

Compliance Requirement

January

Update employee minimum wage

March

New foreign company registration rules

July

Enhanced job seeker support system

Ongoing

Monthly/quarterly declarations via DSN


The French reporting system is rigorous but manageable with the right tools. Setting up your compliance process using services like eBranch makes navigating the system easier and more efficient. This way, your business can stay on track and avoid penalties while focusing on growth and success in the French market!


Registering As An Employer In Finland: Flexible Options Beyond Local Entities


When it comes to establishing a presence as an employer in Finland, businesses have two main options beyond setting up a local entity:


  1. Direct Registration of the Foreign Company: This involves registering the company directly with the Finnish Commercial Register and obtaining the necessary tax and employment registrations. This provides full control over the hiring process and employee management, but requires more time and resources to set up and maintain.


  2. Finnish Branch Office: Establishing a branch office of your foreign company allows you to operate in Finland without the need for a local subsidiary. The branch is considered an extension of the parent company and is subject to the same taxation and compliance requirements. This is a popular choice for international businesses looking to expand their operations in Finland.


Regardless of the registration method, the key focus should be on employment governance - ensuring compliance with Finnish labor laws, managing payroll and HR functions, and providing the necessary employee benefits. Finland's digital infrastructure, including the eBranch system, makes these processes seamless, whether you choose the direct registration or branch office approach.


The most important aspects to consider are the mandatory insurance requirements, employee registration procedures, and adherence to working hour regulations, minimum wage, and other labor regulations. By prioritizing these employment governance aspects, you can ensure a smooth and compliant hiring process in Finland, without getting bogged down in the details of local entity formation.


Conclusion


Establishing a business in France is a systematic and attainable endeavor, governed by explicit procedures that guarantee adherence to local legislation. France provides a systematic framework for entrepreneurs, encompassing the selection of an appropriate business structure and comprehension of social security contributions. The advent of digital platforms has streamlined administrative tasks, enabling international enterprises to manage tax declarations, employee registrations, and other critical activities effortlessly.


Recent modifications in French rules, including the removal of social representatives and the simplification of the registration process, have rendered the French market more inviting for multinational enterprises. These advancements allow enterprises to concentrate on expansion instead of becoming entangled in intricate bureaucracy, facilitating the establishment of a presence in France.


Utilizing virtual office solutions and sophisticated digital tools, initiating and overseeing a firm in France has become exceedingly uncomplicated. A local body is not required for complete compliance. By enrolling in eBranch, you can utilize these services and commence your adventure as an employer in France now. Become part of the multitude of prosperous enterprises flourishing in the French market, where explicit regulations and efficient procedures facilitate your business expansion at every stage.


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