Disadvantages and risks of doing business in France
Despite significant advantages, doing business in France can present some challenges of which outside investors and businesses should be cognizant of.
The process of opening a business in France as a foreign, non-EU resident can be lengthy. Furthermore, once established, U.S. businesses must be prepared to deal with the country’s extensive and complex labor laws which have a special emphasis on employee rights and protections. Employment costs can run high due to the payroll taxes that employers are required to pay.
France also presents some cultural challenges. While English is considered the main language used for business in most EU countries, in France, businesspeople and even visitors are expected to have some grasp of French. While it is not obligatory to speak French, to refuse or even attempt to speak it, may be considered rude.
The power structure and hierarchy norms in France are very defined and can seem alien to Americans. The business environment is very formal, and individuals are expected to know the rank of their counterparts and act accordingly. Greeting and addressing clients and colleagues in the proper manner is also encouraged.
When doing business in France, it’s important to consider local norms and understand these cultural differences in order to make a good impression.
Frequently asked questions for doing business in France
Why should I consider doing business in France?
Not only is France one of the largest economies in Europe but is the 6th largest in the world. It boasts a large domestic market and is a major springboard to the rest of the European single market. Great infrastructure, highly developed telecommunications and technology, and access to one of the largest capital markets in the region.
What challenges should I consider when expanding to France?
While there are challenges to doing business in any foreign country, some of the common challenges of doing business in France include complexity in labor laws and higher cost of employment, differing business norms and language barriers, and a strict regulatory environment.
What is the corporate tax rate?
The current corporate tax rate in France is 33.3%
What are the business entity types available?
There are many entity types in France, the most commonly used are:
- Société par actions simplifiée (SAS) or Simplified joint-stock company
- Société a responsabilité limitée (SARL) or Limited liability company
- Société anonyme (SA) or Public limited company
How long does it take to incorporate a business in France?
Depending on the entity and business type, it can take between 1 and 4 weeks.