Setting up or running a business in France: a guide for resident foreign entrepreneurs

France is an attractive destination for many entrepreneurs from diverse backgrounds, keen to develop their projects in a dynamic economic environment. However, setting up and running a commercial, industrial or craft business in France when you are a national of a non-EU country (outside the European Union, the European Economic Area and Switzerland) means navigating a specific regulatory framework. Understanding the obligations associated with residence is a fundamental step in securing your project and your personal installation. The purpose of this article is to explain the main requirements and options available to you if you are planning to reside in France and become your own boss.

The general obligation: a residence permit to do business

Since a major reform in 2006, the need for foreign nationals wishing to reside in France and carry out a self-employed activity to hold a specific permit has been clarified. The old "foreign trader's identity card" has been abolished. Today, the principle is clear: to live in France and run your business or practise your craft, you must, barring exceptions, hold a residence permit that explicitly authorises you to do so.

This requirement derives in particular from the provisions of the Code on the Entry and Residence of Foreigners and the Right of Asylum (CESEDA). Article L. 313-10 of this code, for example, provides for the issue of temporary residence permits to work, including on a self-employed basis. Without this permit, you run the risk of finding yourself in an irregular situation, not only in terms of your residency, but also in terms of your professional activity.

Who is affected by this obligation?

The requirement to hold an appropriate residence permit does not just apply to one category of entrepreneur. It applies widely, whether you are planning to set up a small business or take over the reins of a larger company.

Sole trader (natural person)

If you are planning to run your own business, either as a trader registered with the Registre du Commerce et des Sociétés (RCS) or as a craftsman registered with the Répertoire des Métiers (RM), you are directly concerned. You will need to provide proof of a residence permit allowing you to carry on this activity.

It is worth noting a clarification made by the law of 26 January 2024 (law no. 2024-42): it confirms that non-European foreigners can only access the status of sole trader if they hold a residence permit authorising them to do so. This reinforces the need to anticipate these administrative formalities even before officially launching a business under this status.

Company directors and partners

The obligation also extends to foreign nationals who hold key positions within legal entities (companies, associations, economic interest groups, etc.). The obligation to hold an appropriate residence permit applies in particular to the following, in accordance with article R. 313-16 of the CESEDA :

• The partner of a civil partnership is indefinitely liable for the company's debts.
• The partner of a société en nom collectif (SNC) or the general partner of a société en commandite (SCS), liable indefinitely and jointly and severally.
• A member of an Economic Interest Grouping (EIG) or European Economic Interest Grouping (EEIG).
• Any person, whether a partner or not, with the power to direct or manage the company (for example: the manager of a SARL or civil partnership, the chairman of a SAS, the managing director or chairman of the management board of a SA).
• The natural person delegated by a managing legal entity (possible in SAS or SNC) to exercise effective management.
• The legal representative of an association (under the 1901 Act) issuing bonds or carrying out recent economic activity (less than two years).
• The director or representative of a commercial EIG.
• The natural person with the power to bind a foreign company through an establishment, branch or commercial representation in France.

On the other hand, positions with no direct management powers, such as those of simple director or member of the supervisory board of a public limited company (even the chairman of this board), do not, in principle, make it necessary to hold a specific residence permit for the exercise of this position alone.

The main entry points: which residence permit should you choose?

Fortunately, French law provides for several types of residence permit designed to accommodate foreign talent and entrepreneurial projects. The choice will depend on the nature of your project, its scale, your background and your ambitions. Here is an overview of the most common options.

The "entrepreneur/professional" residence permit

Under article L. 313-10, 3° of the CESEDA, this temporary residence permit (generally renewable for one year) is the 'standard' option for anyone wishing to set up or take over a commercial, industrial or craft business in France.

The essential condition for obtaining it is to demonstrate the economic viability of your project. What does this mean in practice? The authorities will assess whether your activity is likely to provide you with sufficient means of support. Generally speaking, the criterion used is an income at least equivalent to the annual gross minimum wage (SMIC) for full-time work. You will therefore need to present a solid business case, often including a business plan and financial forecasts, to convince people of the feasibility and potential of your business. Administrative case law, such as a ruling by the Paris Administrative Court of Appeal in January 2021 (no. 20PA02407), shows that the administration carefully examines the consistency of the project (market analysis, commercial strategy, etc.) before granting this title.

The "talent passport" for ambitious projects

The "talent passport" scheme, codified in article L. 313-20 of the CESEDA, is designed to attract profiles and projects considered to be of particular interest to the French economy. It covers several categories and often has the advantage of being a multi-annual (up to 4 years), renewable residence permit. The "talent passport" contains a number of features that may be of interest to entrepreneurs:

• Business creator : For those with a real and serious business plan and a degree at least equivalent to a Master's or 5 years' comparable professional experience.
• Innovative economic project : For those whose project has been recognised as innovative by a public body.
• Economic investor : For those making a significant direct investment in France (personally or via a controlled company).
• Corporate officer : For executives appointed in a French company, subject to a salary threshold.

Article L. 315-1 of the CESEDA also provides for a "skills and talents" residence permit. Although distinct from the "talent passport" in the strict sense, it also targets exceptional profiles likely to make a significant contribution to France's economic development or influence. The criteria for obtaining the card are defined by a national commission and are considered to be highly selective.

Special case: the "seeking employment or setting up a business" card

Introduced by the law of 10 September 2018 (amending article L. 313-7 of the CESEDA), this card is specifically aimed at foreign nationals who have just completed their higher education studies (minimum master's level) or research work in France and wish to stay there to seek employment or setting up a company.

This title, which lasts for a maximum of 12 months and is non-renewable, gives them valuable time to carry out an entrepreneurial project related to their training or research. To obtain it, you need to provide proof that you have a degree (or that your research has been completed), health insurance and a credible business start-up project. If, at the end of this period, the business has been set up and is deemed viable, the foreign national can then apply for a change of status to an "entrepreneur/professional" card or a "talent passport".

Important exceptions: who is exempt from these specific procedures?

Although the general rule is that an "entrepreneur" residence permit is required, there are situations where this is not necessary. It is a good idea to be aware of these to avoid unnecessary procedures.

Citizens of the European Union, the EEA and Switzerland

This is the most notable exception. By virtue of the principles of freedom of movement and freedom of establishment guaranteed by the European treaties, nationals of EU Member States, as well as Iceland, Liechtenstein, Norway (EEA) and Switzerland, can come to settle and do business in France without needing a residence permit. All they have to do is register with the town hall in their place of residence within three months of their arrival, as stipulated in article L. 121-1 of the CESEDA. The transitional arrangements that may have existed in the past for certain new Member States (such as Romania and Bulgaria until 2014) have all come to an end.

Foreign nationals who already hold certain residence permits

Some foreign nationals already legally resident in France also do not need to apply for a specific permit to set up their own business, as their current permit already authorises them to do so. This is particularly the case for holders of :

• From a resident card (valid for 10 years).
• From a long-term resident's card - EU.
• A 10-year Algerian residence certificate.
• From a temporary or multi-annual residence permit for "private and family life"..

Under articles L. 313-12 and L. 314-4 of the CESEDA or the Franco-Algerian agreement, these permits allow you to carry out any paid or self-employed professional activity. Be careful, however, when renewing these permits: you must ensure that you still meet the conditions for obtaining them. At the end of 2023 (Soc. 29 Nov. 2023, no. 22-10.004), on the basis of the former article L. 311-4 of the CESEDA, the Court of Cassation reiterated the importance of applying for renewal on time (two months before expiry) in order to benefit from the three-month period after expiry during which rights, including the right to work, are maintained.

What about other nationalities (Algerians, Moroccans, Tunisians, sub-Saharan Africans)?

For nationals of countries linked to France by specific bilateral agreements, such as Algeria, Morocco, Tunisia or certain sub-Saharan African countries, the general rule remains the obligation to apply for a residence permit authorising self-employment. However, the precise conditions for obtaining this permit and the types of permit available may be governed by specific agreements. For example, the amended Franco-Algerian agreement of 27 December 1968 contains provisions specific to Algerian traders and craftsmen wishing to establish themselves in France. It is therefore advisable to check the content of the agreement applicable to your nationality.

Combined activities: the need for vigilance

One situation that deserves particular attention is that of a foreign national already in France with a "student", "employee", "visitor" or other residence permit, who wishes to start a commercial or craft activity, perhaps even on a secondary basis at first. It is essential to understand that the initial residence permit generally does not cover this new self-employed activity.

In practice, this means that it is essential to apply for a change of status with the prefecture in your place of residence before starting your business activity. Ignoring this step, even if the activity is secondary, can lead to serious complications, in particular the risk of working without authorisation and compromising your right to residency. It is better to plan ahead and regularise your administrative situation beforehand.

Navigating the different residence permit options, understanding eligibility criteria and anticipating administrative requirements can be complex. Each situation is unique and deserves an in-depth analysis. For a personalised analysis of your situation and to ensure that you choose the path best suited to your entrepreneurial project in France, our team is at your disposal.

Sources

• Code de l'entrée et du séjour des étrangers et du droit d'asile (CESEDA), in particular articles L. 121-1, L. 311-4 (former version), L. 313-7, L. 313-10, L. 313-12, L. 313-20, L. 314-4, L. 315-1, R. 313-16.
• Law no. 2024-42 of 26 January 2024 to control immigration and improve integration.
• Law No. 2018-778 of 10 September 2018 for controlled immigration, an effective right of asylum and successful integration.
• Franco-Algerian agreement of 27 December 1968, as amended.