Setting up your company in Bretagne

Source: Doing Business in France 2015, Business France

 

 

Setting up a Company

The key stages to complete before setting up a subsidiary

  • Choosing your premises and founding a head office for your company by signing a domiciliation agreement, a commercial lease or purchasing real estate,
  • Choosing your company’s legal status (SAS, SARL, or SA, for example),
  • Drafting your corporate statutes (address, directors, area of business, etc.) and signing them (in the presence of a notary if the company owns buildings),
  • Where necessary (for company directors outside of the EEA), acquiring a long-term visa and residence permit (trader or skills and expertise worker),
  • Choosing a company name (research rights via the National Institute of Intellectual Property, INPI, http://basesmarques.inpi.fr, and the commercial court),
  • Raising share capital: opening a bank account in France and depositing your start-up share capital,
  • Registering your statute’s within a month of them being adopted with the CFE (free of charge).

Whilst or after setting up the company, you’ll need to submit the following paperwork:

  • Registering the company with an insurance centre and taking out civil liability insurance and/or insurance for the premises,
  • Joining an employee pension fund (compulsory within three months of registering),
  • Paperwork related to recruiting employees must be submitted to the URSSAF by sending a preliminary hiring declaration (DPAE, déclaration préalable à l’embauche).

Registering the company with an insurance centre and taking out civil liability insurance and/or insurance for the premises,
Joining an employee pension fund (compulsory within three months of registering),
Paperwork related to recruiting employees must be submitted to the URSSAF by sending a preliminary hiring declaration (DPAE, déclaration préalable à l’embauche).

 

Simplified processes

The paperwork needed to open a company has been significantly streamlined and the entire process can now be completed online. Whatever the status you choose, you’ll be able to submit the paperwork required to set up your company to the relevant Business Start-Up Centre (CFE, centre de formalités des entreprises). This single point of contact is a centralised system for all your paperwork and will take care of passing on the information to the relevant authorities on your behalf.

It takes a few days to register a company or branch on the Business and Trade Register. The cost for completing all registration paperwork is around €50, in addition to the fees for advertising in legal announcement journals if you decide to set up as a company (approx. €230).

 

A business structure to suit you

Type of business structure Definition Features
No commercial activity Liaison Office One representative in France, no commercial activities.

Simple structure (extension of a foreign company in France):

> No commercial activity

> No autonomy.

Long-term solutions Branch Through its representative, an entity of the foreign company that can legally bind the company (i.e. sign sales contracts).

Uncomplicated structure that can conduct commercial activities:

> Can make decisions independently as the branch’s representative in France.

> Transactions legally binding for the foreign company.

Subsidiary Company subject to French law that can conduct all types of business. Autonomous legal entity:
Transactions only legally binding for the subsidiary itself.

range of different legal forms

The three main legal forms for limited companies allow financial liability to be restricted to the amount of capital contributions. Limited companies can easily be transformed at low tax cost.
The most commonly found business structures are:

  • SARL (société à responsabilité limitée, private limited liability)
  • SAS (société par action simplifiée, simplified joint-stock company)
  • SA (société anonyme, public limited company)

 

The SARL and SAS structures can be founded by a single associate, while SA structures require seven shareholders. The SA structure is the only one able to make public offerings.
The SAS structure is well-suited to holdings or foreign companies looking to set up wholly-owned subsidiaries. The amount of its share capital is freely set by the shareholders in its statutes.

If you do business in two or more EU member states, you can opt for European Company (SE) status. The head office must be registered in the statutes and correspond to the premises for the company’s central administration. The location of a company’s head office determines its applicable business law. A company with SE status is subject to tax in all member states where its permanent establishments are located.

 

Real estate to suit you

To get started, you’ll need temporary premises at a low cost. There are a number of options available, including:

  • Head office domiciliation in a business or domiciliation centre, which will also grant you access to services such as telephone reception, meeting rooms, a PO box, etc.
  • Council hosting services (incubators, workshops and networking, etc.).
  • Professional office hire for a fixed period (short-term lease, maximum 24 months).

 

Longer term solutions:

A commercial lease is the most widespread solution. These contracts are signed for a 9-year period and are renewable by the lessee every three years. The lessee signs up to the company registration registry (excluding self-employed professions) and enjoys legal protection from non-renewal or eviction.

 

If you’d like to own your own premises, you can choose from a variety of different options, including:

  • Freehold purchase: Foreign companies can buy land and commercial/industrial buildings from private or public owners. Transactions are legally protected via legal regulations applicable to real estate acquisition and through the assistance of intermediaries such as notaries. State support for purchasing buildings is available providing some conditions are met.
  • Leasing is very common.
  • The SCI (société civile immobilière, real estate investment company) is an independent legal body that helps fund premises that will then be made available for companies to run their businesses. One of its advantages is that it protects professional real estate assets and can also result in tax benefits.

 

 

 

Social legislation

Freely negotiated employment contracts

The different types of employment contracts available allow employers to tailor recruitment to their needs. Contractual clauses ensure additional flexibility in working relationships. They must nevertheless comply with the Labour Code and the collective agreement applicable to the company.

 

Common law employment contracts are permanent contracts (contrat à durée indéterminée or CDI in French). They generally take the form of a written document, and in these cases, the language used must be French. Employees whose mother tongue is a language other than French may request a translation prior to signing the contract. The employment contract must indicate the salary and the employee’s duties as well as the place of work and hours. In principle, the other clauses are freely determined by the parties, who enjoy great freedom regarding the content of their contracts.

 

Company directors do not receive employment contracts but business mandates. Their title, pay and conditions are freely set out in the company’s statutes. Provided some conditions are met, it is however possible to combine the role of director with a company employment contract for distinct technical duties (such as for SA managing directors, chairmen of SA and SAS companies and SARL minority shareholders).

 

In exceptional cases, they may use a CDD (contrat à durée déterminée, fixed-term contract) or TT (travail temporaire, temporary work contract) to carry out a specific and temporary role.

 

CDDs, or fixed-term contracts, may only be used in cases enshrined in law, which include temporary business growth periods.
These contracts must be written up in French and are valid for a maximum 18-month period, renewable once. They grant the employee access to end-of-contract remuneration (10% of the total remuneration paid for the entirety of the contract).

 

TT, or temporary contracts, involve drawing on temporary employment agencies that provide companies with employees they recruit and pay for these purposes.

 

All employment contracts are subject to a trial period. Trial periods last from two to a maximum of four months for a CDI, or permanent contract, and are renewable once. These contracts may be terminated immediately, without compensation due.

 

Simplified online hiring procedures

Hiring procedures have been simplified thanks to the preliminary hiring declaration (déclaration préalable à l’embauche, DPAE). Employers must fill in this form within eight days of the employee’s starting date, and send it to the URSSAF attached to the company’s premises. The declaration can be completed and submitted online. This procedure allows the following steps to be completed via a single portal: registration with the employee’s social security body (unless secondment), subscription to the occupational health service, scheduling the compulsory health check-up (during the trial period) and membership to the unemployment insurance body (Pôle emploi).

In addition to the DPAE, employers must:

  • declare the first hired employee to the work inspection body,
  • subscribe to the complementary retirement funds within three months of setting up the company,
  • complete all paperwork required to employ a foreign employee (excluding European employees).

 

Terminating a permanent contract

A permanent contract can be terminated in different ways:
Contractual termination: the employer and employee can mutually decide to amicably end the permanent employment contract. This procedure is fairly flexible.
The termination can be carried out for financial reasons or for reasons related to the employee. As in many countries, a reason must be provided for the termination (fair cause) and legal procedures must be followed (reason for termination, number of employees affected by the terminations and company workforce numbers).

 

Working hours: negotiating within the company

The statutory working week is 35 hours. This is a guideline amount, with extra hours being paid overtime. The 35-hour per week rule does not apply to management.

The overtime an employer may request is negotiated by agreement within the company (the default is 220 hours per year per employee), which means an annual total of 1,827 hours is permitted, meaning over 39 hours per week over 47 weeks. Overtime payment can be replaced by extra holiday if this option is provided for under the collective agreement.

Employees must work no more than 10 hours per day (modifiable by agreement up to 12 hours) and no more than 48 hours per week, with a maximum of an average of 44 hours per week over a 12-week period.

Employees enjoy five weeks’ paid leave per year. An employer may deny permission for leave if the workload does not allow for it. An employee must nevertheless be permitted to take at least four weeks’ leave between 1 May and 31 October. There are on average 10 bank holidays a year, and where applicable, days off for family events (weddings, births, deaths) in addition to paid leave.

Sundays are days off, but with a flexible derogation option.

Companies have a number of solutions available to adapt working hours to financial constraints, with no extra salary costs and by spreading remuneration. The provisions for the way in which working hours are organised and structured are incorporated into a unique framework: a collective agreement allows working hours to be organised in periods of over a week and under a year.

 

Social security: the key to helping your employees grow

 

The French social security system takes care of almost all health costs for policyholders and their beneficiaries. The system encompasses four types of insurance: health insurance (sickness, maternity, disability, death), retirement insurance, family services and accidents in the workplace.

Making contributions to the system is a safeguard for the company with respect to its responsibilities in terms of sickness, retirement, training and unemployment. Employers’ social security contributions are significantly reduced for low wages. From 1 January 2015, companies pay no URSSAF fees on the SMIC (minimum wage): the remaining employer contributions are approximately 11% to 13% depending on the employee’s status. In addition, all companies are eligible for the CICE (crédit d’impôt compétitivité emploi, competitiveness and employment tax credits) at a rate of 6% of the payroll under 2.5 times the minimum wage (€3,643.79 gross monthly salary).

For higher wages, on average social contributions account for 42% of the gross salary for the employer’s share, and whatever the amount, close to 21% for the salary share.

These contributions release the employer from their responsibility towards their employees. For example in the event of illness, maternity leave or an accident in the workplace, the employee’s salary is partially covered by social security.

Similarly, by paying in to the company’s professional training fund every month, the employer will see all or part of the professional training costs needed to improve their employees’ skill sets covered.

 

 

 

International mobility for management and foreign employees

 

International mobility provisions implemented in France aim to encourage head-hunting of highly qualified employees and promote intra-group mobility. Multi-year residence permits were introduced to provide foreign nationals and their families with total legal protection.
The ‘skills and expertise passport’ introduced in February 2016 grants its holders better living and working conditions in France. It replaces the array of different permits that existed for qualified foreign nationals or those with a particular skill (artists, scientists, athletes, etc.). Valid for a four-year period, they significantly reduce the burden of paperwork for foreign nationals in France.
Through a highly effective social security system and a collection of intricate bilateral social security agreements, companies are able to offer their employees excellent working conditions. Your employees can remain part of their home country’s social security system if a social security agreement has been signed between the country in question and France. If no such agreement exists, all employees working in France, irrespective of nationality, age or contract type, must be signed up to the French social security system (principle of territoriality).

All individuals who are tax residents in France are liable to be taxed on all of their earnings whether generated in France or abroad, subject to international tax agreements and some special tax regimes. When foreign source income is also taxed in their home country, double taxation is avoided by applying the provisions enshrined in a number of bilateral tax agreements signed by France and other states.

The expatriate tax regime is particularly well-designed, and allows for expatriation costs in France to be reduced.

The priority for companies seeking to send their employees to France is to plan for the administrative processes required and weigh up the social security consequences. In particular, they should determine the most appropriate migrant status, the most effective social security system and the most beneficial tax regime.

 

Professional immigration : useful information and links

 

The official visa website for France : France-Visas

Short-stay visa

Long-stay visa

Visa application guidelines

You are coming to France for professional purpose : all procedures according to your situation

Your arrival in France

 

International mobility according to professional situations

(non-EU/EEA/Switzerland)

Company director “Exceptional Economic Contribution”

  • Visa and residence permit issued : Long- or short-stay visa + “Exceptional Economic Contribution” residence permit
  • Maximum period of residence in France : Permanent residence permit = 10 years, renewable
  • Eligibility criteria :
    • Must run the company or hold an interest of at least 30%.
    • Must invest at least €10 million.
    • Or must create or maintain at least 50 jobs.
  • Application filing : At the Préfecture local to the planned investment site.
  • Requirement to obtain work permit : N/A
  • Accompanying family : Yes. Spouse receives 0-year residence permit.

Company director residing in France

  • Visa and residence permit issued : Long-stay visa + “Skills and Expertise” residence permit
  • Maximum period of residence in France : 3 years, renewable
  • Eligibility criteria :
    • Must create and run a company, certain conditions apply (intra-group transfer or creation of two jobs or investment of at least €300,000).
    • Must be an existing appointed paid company director.
    • Must be the representative of the branch or liaison office.
  • Application filing :
    • Initial application: at the consulate in the applicant’s country of residence.
    • To change status: at the Préfecture local to the applicant’s place of residence.
  • Requirement to obtain work permit : N/A. The applicant is a company director who does not have the status of employee as defined by French employment law.
  • Accompanying family : Yes. “Private and Family Life” residence permit issued for 3 years  (renewable). The spouse can freely seek employment.

Company director residing in France (ineligible for a “Skills and Expertise” permit)

  • Visa and residence permit issued : Long-stay visa + “Business Activity” residence permit
  • Maximum period of residence in France : 1 year, renewable
  • Eligibility criteria :
    • Must create and run a commercial or industrial business.
    • Must be an appointed company director (Director of a limited liability company, Chairman of simplified limited company, etc.).
    • Must be the representative of the branch or liaison office.
  • Application filing :
    • Initial application: at the consulate in the applicant’s country of residence.
    • To change status: at the Préfecture local to the applicant’s place of residence.
  • Requirement to obtain work permit : N/A. The applicant is a company director who does not have the status of employee as defined by French employment law.
  • Accompanying family : Yes. “Visitor” residence permit issued. The spouse must obtain a work permit to seek paid employment.

Company director not residing in France

  • Visa and residence permit issued : Schengen short-stay “Business Trip” visa. Option to obtain a circulation visa.
  • Maximum period of residence in France : 90 days maximum per 180-day period
  • Eligibility criteria :
    • Must be the company’s legal representative.
  • Application filing :
    • Consulate in the applicant’s country of residence.
  • Requirement to obtain work permit : N/A. The applicant is a company director who does not have the status of employee as defined by French employment law.
  • Accompanying family : No.

Employee on intragroup transfer

  • Visa and residence permit issued : Long-stay visa + “Employee on Assignment” residence permit
  • Maximum period of residence in France : 3 years, renewable
  • Eligibility criteria :
    • Must be on a posting or expatriation within same business group.
    • Must be paid gross monthly salary of at least 1.5 times the statutory national minimum wage (SMIC).
    • Work contract must be valid for at least three months.
  • Application filing :
    • Local employment authorities (Unité territoriale at the DIRECCTE) relative to where the work is to be performed in France : the employment authorities issue the work  permit and send the file to the consulate (through the OFII).
    • Or: OFII ‘One-stop shop’ for work permit applications in the départements concerned. The employer forwards all documentation to the OFII which acts as a single point of contact between the Unité territoriale, the company and the consulate.
    • Consulate: issues long-stay visa (filed at same time).
  • Requirement to obtain work permit : Yes. The employer sends the application file to the local employment authorities,
    which review the application within 10 days.
  • Accompanying family : Yes.
    • “Visitor” permit if residence is less than six months.
    • Three-year “Family and Private Life” permit if residence is for more than six months.

Highly skilled employee (Intra-European transfer)

  • Visa and residence permit issued : Long-stay visa + “European Union Blue Card” residence permit
  • Maximum period of residence in France : 3 years, renewable
  • Eligibility criteria :
    • Must hold a degree certifying at least three years of higher education or have at least five years of professional experience.
    • Must have an employment contract lasting at least one year.
    • Must earn a salary worth at least 1.5 times the average gross salary (€52,750 gross per year in 2014).
  • Application filing :
    • Local employment authorities (Unité territoriale at the DIRECCTE) relative to where the work is to be performed in France : the employment authorities issue the work  permit and send the file to the consulate (through the OFII).
    • Or: OFII ‘One-stop shop’ for work permit applications in the départements concerned. The employer forwards all documentation to the OFII which acts as a single point of contact between the Unité territoriale, the company and the consulate.
    • Consulate: issues long-stay visa (filed at same time).
  • Requirement to obtain work permit : Yes.
  • Accompanying family : Yes. “Private and Family Life” permit for same duration as holder of the “European Union Blue Card”.

Employee (posting < three months)

  • Visa and residence permit issued : Short-stay visa + temporary work permit.
  • Maximum period of residence in France : 90 days maximum
  • Eligibility criteria :
    • Must be a salaried employee of the foreign company prior to the posting.
    • Must be posted for an assignment on the foreign company’s behalf or to provide a service with a company based in France.
  • Application filing :
    • Local employment authorities (Unité territoriale at the DIRECCTE) : issue work permit
    • Consulate: issues short-stay visa
  • Requirement to obtain work permit : Yes. The employer sends the application file to the local employment authorities.
  • Accompanying family : No.

Employee from outside group (posting > three months)

  • Visa and residence permit issued : Long-stay visa equivalent to a “Temporary Worker” residence permit.
  • Maximum period of residence in France : Depends on length of assignment. 3 to 12 months, renewable, subject to certain restrictions.
  • Eligibility criteria :
    • Must be a salaried employee of the foreign company prior to the posting.
    • Must be posted for an assignment on the foreign company’s behalf or to provide a service with a company based in France.
  • Application filing :
    • Local employment authorities (Unité territoriale at the DIRECCTE) issue work permit. The employment authorities send the file to the OFII, which forwards it to the consulate.
    • Consulate: issues long-stay visa.
  • Requirement to obtain work permit : Yes. The employer sends the application file to the local employment authorities.
  • Accompanying family : No. May apply for a “Visitor” visa.

Arrival of an employee in France. Credit : Business France
Credit : Business France

 

 

 

Corporate tax in France

In France, tax rules have traditionally been designed to favour business investment, regional development and global expansion. The principles that apply to groups also illustrate France’s commitment to maintaining fair fiscal treatment. France enjoys bilateral tax agreements with most nations likely to do business with the country (over a hundred different states), thus offering foreign investors high protection against double taxation. A single office incorporated into the Public Finance Director General grants foreign investors access to tax-related information. This service is accessible by writing to tax4business@dgfip.finances.gouv.fr, and allows foreign investors to set up in France in a transparent, secure environment.

 

Corporation tax in line with European norms

 

When a foreign company operating in France turns a profit, the latter becomes taxable in France (principle of territoriality). For branches or permanent establishments with no separate legal personality, French profits are defined based on the foreign company’s accounts.

Corporation tax (IS) is as follows:

  • for big companies: standard 33.33% rate
  • for small- and medium-sized companies (SMEs): reduced IS rate of 15% up to €38,120 profit and standard rate of 33.33% for anything in excess of this figure. SMEs are exempt from additional social security contributions.
  • Industrial property profits (concession fees and patent assignment added value, subject to owning it for two years or more) are subject to a reduced rate of 15%.
  • Companies based in France, with shares in French or foreign companies, are only taxed up to 5% on the amounts allocated by the companies in question. To be eligible for this regime, the company must own at least 5% of capital in each company and hold the securities for at least two years.

 

In addition, companies enjoy highly favourable depreciation rules: thanks to a declining rate, the depreciation system generates tax savings on profits. Assets related to R&D also enjoy an increased depreciation coefficient.

The tax integration system allows companies within a single group to be taxed as a whole. It allows groups to compensate for profits and losses seen in their French businesses within the consolidation perimeter, and also allows the group’s internal operations to be neutralised. Tax credits collected by one of the group’s companies, for example research tax credits, can be transferred to the consolidation company that will be alone in paying corporation tax, thus being able to be set off against the taxes owed by the group. The tax integration system can be chosen when a French parent company holds 95% of the shares of the consolidated group’s French branches, whether directly or indirectly.

Holding companies are eligible for the tax integration system.  A holding company based in France that has held at least 5% of shares in each of its French or foreign subsidiaries for at least 2 years can enjoy taxation reduced to 5%.

 

Types of repatriation of profits

 There are three types of profit repatriation:

  • Transfer or distribution of the branch or subsidiary net profits;
  • Loan interest and advances granted by the foreign parent company;
  • Royalties or management fees.

Dividends paid enjoy reduced withholding tax rates, or even exemptions.

Dividends paid into a European parent company are exempt from withholding tax, as long as its head office is located within the EU and it has shares of at least 10% in its French distributor branch capital.

Outside of the EU, most tax conventions between France and the primary industrialised states allow for dividend withholding tax with a standard rate of 5% for companies (subject to minimum shareholding in the capital of the branch founded in France) or 15% for individuals. France’s new tax conventions (with Japan and the United States) even allow for zero withholding tax in the event of dividend payout (subject to certain capital share conditions). In the absence of a tax convention, the tax withholding rate is 30%.

For interest and royalties paid out to foreign companies, tax conventions give rates that vary from 0% to 15%.

 

VAT and customs duties

 

VAT: neutral tax for relevant companies

VAT is a tax on consumer goods and services, paid for by the end consumer.

During the set-up stage, each company is allocated an intra-community VAT number by the tax office. Companies may only collect tax on sales and services, and then deduct the VAT they have paid on their goods or services from this amount. To do so, they are required to fill in monthly, quarterly or annual tax forms depending on turnover, and the amount of VAT they paid the previous year. This form is then sent to the SIE (service des impôts des entreprises, business tax department) or the DGE (direction des grandes entreprises, large corporations department), depending on the size of the company and before a deadline set by the administration.

If the VAT paid on purchases is higher than the VAT collected on sales and services, the resulting extra VAT will be refunded to the company upon request.

Sales of goods outside of France are fully exempt.

The standard rate on the sales of goods and services is 20%, but several reduced rates exist:

  • 10%: restaurants, hospitality services, public transport, newspapers and magazines and some leisure activities;
  • 5%: food products, books, construction and renovation work on social housing, some agricultural products.
  • Drugs and medication are subject to a rate of 5.5% or 2.1%.

 

Standard customs duties across the EU

For goods moving within the EU, customs duties are only billed once, when the merchandise arrives on French soil. Goods coming into France to be dispatched to another EU member state are exempt from customs duties and VAT (VAT is paid in the country of consumption).

A legal provision allows merchandise purchases and processing operations or operations designed to improve these goods to be exempt from VAT, when the merchandise is to be subject to a suspensive VAT system or a European customs system, when the merchandise in question is to be dispatched within the EU or later exported. If the merchandise remains in France in the exit regime, this mechanism allows VAT to be paid at a later date.

Companies are exempt from filling in any administrative documents for the free movement of most goods between members states of the European Union. Intra-community trade only requires a trade of goods declaration (DEB) to be completed for statistics.

Customs have developed computerised customs clearance methods that ensure clearance paperwork and merchandise availability is accelerated.

Transferring merchandise between a European Union member state and a third country requires a customs declaration be made (whether for export or import) that takes the shape of a single administrative document.

 

Local taxes payable by the company

 

Territorial economic contribution

The CET (cotisation économique territoriale, territorial economic contribution) is comprised of the CFE (cotisation foncière des entreprises, corporate property tax) determined by the establishment’s local council, and the CVAE (cotisation sur la valeur ajoutée des entreprises, corporate added-value tax), with rates that vary from 0.5% to 1.5% based on annual turnover. Only companies with annual pre-tax turnover amounting to over €500,000 are liable for CVAE. The CET is capped at 3% of the company’s added value. Assets and real estate assets classified as capital investment (machinery, tools, real estate assets, equipment) are not taxed.

Some companies are exempt from CET following assessment by the local council: new companies located in specific areas or founded to take over struggling companies, Young Innovative Businesses (JEI) in some cases, expansions to and new industrial establishments or establishments linked to scientific and technical research located in some areas and under some conditions.

 

Property tax

The tax base is equal to the cadastral rental value (defined upon CET assessment) reduced by a lump-sum allowance of 50% for buildings or 20% for sites. The amount of tax is determined by multiplying the tax base by the rates voted in by the town councils (French communes and départements).

There are, however, a great many exemptions to property tax.

 

Tax credits

 

The French CIR (crédit dimpôt recherche, research tax credit) is one of the most attractive in the world

 

Beneficiaries: Businesses involved in the sales, industrial, agricultural or crafts sectors carrying out technical and scientific research (basic, applied or in experimental development)

Tax relief rates: 30% of annual research spending less than or equal to €100M and 5% beyond this threshold.

Using tax relief

  • Set against corporation tax (IS) owed by the business (for up to 3 years)
  • Instant research tax relief rebates for some businesses (Young Innovative Businesses)

Eligible spending

  • Spending on staff assigned to research (gross salary plus social contributions)
  • Operating costs
  • Spending on technology monitoring (up to €60,000 per year)
  • Spending on standardisation (up to 50%)
  • Spending on submitting, maintaining and defending patents
  • Spending on research paid to external organisations (public or private sector)

SMEs may also qualify for innovation tax relief

  • Applicable to spending on prototype design and pilot installations
  • Aimed at the creation of new products
  • Equal to 20% of spending committed

 

Tax credits to boost competitiveness and employment in companies (CICE)

The CICE is equal to 6% of total salaries paid and cannot exceed two-and-a-half times the SMIC (salaire minimum interprofessionnel de croissance, minimum wage), i.e. €3,643.79 pre-tax monthly pay (1 January 2015). Tax credits are not capped. They are written off the IS payable by the company for the year in which the salaries were paid. Excess tax credits are receivable from the state and can be used to pay the tax due for the three following years, or refunded after this date. Some companies (SMEs, start-ups (JEI) and struggling companies) can receive an immediate refund of this receivable.

 

Film and audiovisual tax credits to boost new productions

This tax credit rate (for either film or audiovisual, depending) is calculated for each tax year and is equal to 20% of eligible spending on technical expenses. It is aimed at covering the following expenses: wages and social security contributions for artists, musicians, extras, technicians and workers, technical equipment and materials, film set hire and film editing expenses. Transport, catering and accommodation expenses in France and subject to certain thresholds are also eligible for this tax credit. The works in question must be primarily in French. Film tax credits are capped at €4m, irrespective of the type of work. Audiovisual tax credits (documentaries, fiction, animation) are capped at €1,250 or €1,300 per minute produced and delivered, depending on the nature of the production. This tax credit is written off the taxes payable by the company on its profits for the year in which the expenses were incurred. If the tax credit exceeds the amount of tax due for the year, the excess is refunded.

 

Video games tax credits

Video games companies subject to corporation tax can receive tax credits for expenses related to developing video games that meet a certain set of criteria and are certified by the CNC (Centre national de la cinématographie, National Centre of Cinematography). Games that are eligible for tax credits must have development costs equal to or above €100,000 and contribute to French and European creative diversity in the video games sector.

Tax credits are equal to 20% of eligible spending, including in particular depreciation on new assets and payroll expenses (including technical and administrative staff) related to creating games, copyrights, and other operating and subcontracting expenses up to €1,000,000. The tax credit is capped at €3,000,000 per company per year.

 

 

 

RECEIVE PUBLIC BUSINESS GRANTS

France is home to a broad and diverse range of grants and public funding designed to meet investors’ needs. These forms of aid are categorised based on the project’s objective (business investment, research/development and innovation, training, etc.), its location (priority regional development area or not) and the type of company backing it (large company or SME*). In 2013, the Public Investment Bank was set up to support this network of public grants and funding to help companies develop in France and abroad, particularly those with fewer than 5,000 employees.

The French authorities support business in different ways:

  • Loans at interest-free or subsidised rates,
  • Grants for business investment or R&D,
  • Real estate grants,
  • Tax exemptions,
  • Social security contributions exemptions,
  • Tax credits/tax relief,
  • Expenses (such as training expenses for new employees, etc.),
  • Public credit guarantee,
  • Capital injections.

A number of funding support programmes are available to encourage companies to invest, create jobs and train employees. These programmes are overseen by the state, local councils and public bodies.

France also boasts a very fertile ecosystem that encourages companies to engage in research and development and develop their innovation through RDI (research, development and innovation) grants.