Guide pour set up a business in France

In order to be able to be able to exercise its activity, it is necessary for a business centre to hold an “agrément préfectoral”, which is a prefectural police authorisation.

Such approval can be requested from the departmental police service where the head office of the business centre or from the police headquarters if the centre in question has its registered address in Paris. The “agrément préfectoral” must be renewed every 6 years. If the director of the business centre fulfils the honorability terms (i.e. not being in a situation of personal bankruptcy), the approval is generally granted without complications after applying for it to the pertinent prefecture.

The number of the “agrément préfectoral” is important to establish a domiciliation contract between a company and a business centre. Indeed, since 2012, every business centre that offers a domiciliation service must provide a number corresponding to the “agrément préfectoral” so that the domiciliation of the enterprises in the centre is valid. Without this number, any company trying to register their address will be rejected by the Registry of Commerce and Companies (RCS in French).

Documents to provide to request an “agrément préfectoral”

To obtain the “agrément préfectoral”, a dossier including the following information is require:

• A declaration form dully completed. The form can be found online.
• A proof of availability of the premises (cadastral statement, floor plan of the premises or a detailed description with supporting pictures).
• A document certifying that the company owns or leases the premises.
• A certificate of honorability from the director of the centre if he’s the only manager. If there are other members in the direction, shareholders, or associates holding at least 25% of the shares or votes in the company, they will also have to provide a certificate.
• A copy of the ID card or passport of the legal representatives, shareholders and associates.
• A copy of the statutes of company constitution (only in the case of a legal entity).
• The K-bis number of the centre.

Once the application has been validated by the police, a number of “agrément préfectoral” is assigned to the business centre. This number, which is the proof that the company can offer a domiciliation service legally, must appear on every agreement established with companies that wish to use the business centre as their registered address.

Conclusion

It is important to know that offering and exercising a domiciliation service without the “agrément préfectoral” can be sanctioned with a fine of €7,500 or even a jail time for up to six months.

If the business centre obtains the “agrément préfectoral”, the last step to take before carrying out a perfectly legal domiciliation service is to register in the pertinent RCS, like any other type of company in France.

As a savvy investor, you have decided to create a real estate company to manage your properties.

This type of company is indeed the most appropriate vehicle for driving your brick investment policy.

AFTER YOUR FIRST PURCHASE

When acquiring your first property, it is natural to domicile your company in the address of such property. However, the downside is that, if this is your first real estate purchase, the seller won’t be willing to let you make use of his address until the sale is definitively concluded. It is then impossible to establish the headquarters of your society at your future address.

You can also domicile your real estate company at your current address, as long as you are the director of the company. Indeed, only the director can domicile his business at his private address. This isn’t an option for the associates.

Note that you will need to add the name of your company to your letterbox in order to receive your mail. While this is a completely valid option in legal terms, it implies, however, that your neighbors will necessarily know about the existence of your company.

Nevertheless, this becomes problematic if your primary residence is the one you have decided to sell so as to buy your new property. This situation is relatively common in France. In fact, the French tax system favors the purchases / sales of the principal residence rather than the operations related to second homes. At this point, it’s important to know that a rental investment is considered as such.

FOR YOUR RENTAL INVESTMENTS

Once your first real estate company has been created, you can accumulate as much real estate as you wish, regardless of their respective addresses. It’s at this point when a professional domiciliation service becomes a real management tool. It is not worth it to create another company, unless you want to have different associates or another proportion of capital than those in the first one. A domiciliation address, fixed and durable, allows you to manage all your property from a central administrative address.

CONCLUSION

The domiciliation of a real estate company is particularly relevant if you have decided to invest in different properties and want a flexible management of your real estate portfolio. In addition, especially if your enterprise is subject to a corporate tax, it’ll be possible for you to add the expenses of the domiciliation to your tax result.

Do you have an idea and want to establish a business in France? If that’s the case, you’ve probably also wondered what are the procedures to do so.

First of all, it’s necessary to know that, regardless of your choice, one of the first things you will have to decide is the address of your enterprise, as it’s compulsory to have one within the French territory in order to enter the enterprise details in the registry of the Commercial Court. In France, there are three possibilities to settle the head office or secondary establishment of your business.

DOMICILIATION IN YOUR OWN HOME

This modality enables you to use your private address, providing that you reside in France, as your registered business address. It’s fairly easy and fast to use your home as head office if you’re a freelancer or a one-person enterprise. However, your activity may be restricted by your rental agreement if you aren’t the landlord, in which case you’ll need an authorisation to exert your activity.

In addition, there may be restrictions as of the amount of years you can use your private address for your business if you’re more than one member in the company. In that case, you need to know as well that only the address of the director can be registered. Doing otherwise is not legal. You also need to note that if you move to a different address, you’ll have to notify it and enter the new one again in the registry of the Commercial Court, paying the subsequent office address modification charges.

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RENTING OR BUYING THE EMPLACEMENT OF YOUR OFFICE

If you opt for a more traditional establishment, you can perhaps think about renting or buying your premises in France. This would provide your business with an office exclusively for your activity and reserved just for your company. Your professional and private lives are thus differentiated, although this is not highly recommendable if your company has only started to operate now and having a physical space isn’t vital to carry out your professional activity due to the fact that it will take quite an amount of your monthly budget, with prices going as high as € 10,000 / sq metre / year in some areas of Paris, and that only accounts for the surface.

In addition to that, you also need to bear in mind that the size of your company will vary over the years and so your spatial needs may be different, meaning you may have to move to a different address. This is particularly problematic because the rental agreements in France stipulate minimum stay periods. In this regard, you need to be very careful with the dates for administrative procedures to avoid having to pay for your rent for as long as three years more even if you aren’t using the premises.

If you want to buy your own facilities, you should think about the means of financing. By buying your premises, it's possible that your company will lose some investment opportunities as the available budget will be considerably lower, thus slowing your progress down. Moreover, it could mean that, just like renting the place, if the size of your company changes and you need a larger space, your facilities won't be really useful.

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DOMICILIATION IN A BUSINESS CENTRE

If you opt to register your enterprise by using the services of a business centre, you’ll have almost the same ease to do so as if you were registering your own address without even having to have a residence in France. All you need to do is to contact the centre and they will take care of the administrative procedures to create and register your company in a very short time span. By hiring a domiciliation service, you get an official address for your company in a generally prestigious area, in which you will receive also all your correspondence, and which will provide you with some premises elsewhere than your private address. Not only do business centres make the process quick and simple, but they put at your disposal secretariat and punctual offices rental services in their facilities should you request them. This is particularly useful if you want to meet some clients or have a reunion with the members of your company.

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CONCLUSION

If you’re a company starting its business in France, and you need an address to determine the location of your head office or secondary establishment without a strong investment or providing an address that interferes with your private life, making use of the domiciliation services of a business centre seems to be a very interesting option to consider.