Foreign Business Creator: Legal Framework and Formalities

A foreign business creator must obtain a residence permit to carry out their activity in France. This could either be a residence permit as an “entrepreneur/self-employed professional” as stipulated in Article L421-5° of the CESEDA, or a “Passeport Talent” residence permit as outlined in Article L421-16° of the CESEDA. In both cases, there are obligations that a foreign business creator must meet to start and continue their activity on French soil.

The first question foreign business creators often ask me is what legal status their business activity should have. The concept of economic activity, as considered by the CESEDA, is very broad.

Previously, there was a distinction between artisans, merchants, and self-employed professionals.

This distinction was abolished by the law of March 7, 2016, in the general regime (though it still exists in the French-Algerian agreement). Therefore, regardless of the nature of the activity, it does not affect the process of obtaining a residence permit for a foreign business creator. Commercial activities such as real estate sales, artisan activities like carpentry, or IT service provision—all these activities can qualify for a residence permit in France.

The legal structure of the business is very flexible.

A foreign business creator can choose the corporate form for their business: a company or sole proprietorship. The law imposes no restrictions, as long as the individual has the appropriate residence permit. A foreign business creator can, for instance, choose to create a simplified joint-stock company (SAS) for their activity, or even a limited liability partnership (SELARL). Similarly, they can opt for a sole proprietorship or become a self-employed entrepreneur. However, without a residence permit, it is impossible to manage a company. To be a manager of a company in France, a foreigner must hold a “entrepreneur/self-employed professional,” “Talent Passport,” or, of course, a “private and family life” or residence card.

All the social obligations arising from the legal structure of the business will apply in the same way as they do for a French citizen.

The issue of investment in the company often comes up.

It is not a mandatory condition to obtain a residence permit. A foreign business creator does not necessarily need to invest capital upfront. However, this investment may play a role in determining which residence permit is issued—whether an “entrepreneur/self-employed professional” or a “Talent Passport.” There is a Talent Passport for economic investments, but this applies to a foreign business acquirer rather than a foreign business creator. In practice, such individuals may not necessarily need or want to live or settle in France.

As for partnerships, foreign business creators often ask: can they partner with another person to carry out their project and succeed in their economic activity? This is entirely possible, but attention must be paid to the type of permit requested and the remuneration of the different partners.

Joining an existing business, however, is not directly considered an issue for a foreign business creator. A foreigner wishing to come to France to join an already existing company as a partner can do so, but they would need to apply for one of the two residence permits mentioned earlier. However, the criteria for obtaining the permit would be different from those for a foreign business creator.

Many applications by foreign business creators fail in practice because the projects are insufficiently prepared. To obtain the residence permits that will allow non-salaried work in France, the economic viability of the project is key. Other elements that strengthen the project, such as the corporate structure, invested capital, and business partners, are also important factors to consider in successfully obtaining the residence permit.