Foreign Merchant in France: What Are the Requirements

Foreign merchant must meet several conditions to conduct business in France. A merchant is defined by the Commercial Code, and when they are a non-EU foreign national, they must, on the one hand, hold a residence permit to live in France, and on the other hand, fulfill registration obligations. This article focuses on foreign merchants in contrast to artisans and liberal professions.

Article L121-1 of the Commercial Code defines what a merchant is:

“Merchants are those who engage in commercial transactions and make it their regular profession.”

The fact of being a foreign national does not change the definition, which implies that a foreigner who wishes to engage in commercial transactions and make it their regular profession will also be considered a merchant. This leads to obligations related to their foreign status, as well as obligations tied to their status as a merchant, which are different.

The foreign merchant must hold the residence permit stipulated in Article L421-5 of the CESEDA (Code of Entry and Stay of Foreigners and the Right of Asylum):

“A foreigner who engages in a self-employed activity, which is economically viable and provides sufficient means of subsistence in accordance with current legislation, is issued a temporary residence permit labeled ‘entrepreneur/freelancer’ for a maximum duration of one year.”

The wording of the article is broad, as it covers any self-employed activity, thus automatically including merchants since they are not employees. The other criteria set by the law are that the planned activity must be economically viable and that the foreign merchant derives sufficient means of subsistence from it. These criteria apply to all individuals seeking this residence permit.

Before engaging in commercial activity in France, a foreigner must hold the residence permit provided for by Article L421-5 of the CESEDA. If not, they are not in compliance with the rules set by the CESEDA. A foreigner holding a “salaried,” “student,” or “visitor” residence permit must apply for a change of status if they wish to engage in commercial transactions.

Beyond the requirement to hold a residence permit, the foreign merchant must register their business with the Trade and Companies Register (RCS). This requirement is stipulated in Article R421-7 of the CESEDA. The RCS is maintained by the clerk of the Commercial Court located in the jurisdiction where the foreign merchant wishes to establish their business. This registration then allows the foreigner to start their commercial activity.

However, being a merchant does not necessarily mean that the foreigner must form a company. They can perfectly well conduct business as a sole trader.

Registration must take place either before the start of business activities or within a certain period after the foreign merchant begins operations. Moreover, proof of registration will be required for the physical issuance of the residence permit under Article L421-5 of the CESEDA.

Thus, the foreign merchant faces a dual obligation to conduct business in France. The two are interconnected, making it legally impossible to bypass them.

For a foreigner wishing to start a business in France, it is essential to understand the obligations imposed by the Commercial Code and the CESEDA before beginning the process.