About Investment & Business Structuring Law in France
Investment and business structuring law in France governs how individuals and entities create, restructure, and manage corporate entities and investment vehicles. It covers company formation, governance, and the allocation of ownership and control among shareholders. The aim is to balance entrepreneurial flexibility with transparency and regulatory compliance.
This area intersects with corporate law, tax considerations, and anti money laundering rules. It also involves succession planning, cross border investment, and the use of holding or special purpose vehicles to optimize risk and capital flows. A clear structure helps attract investors, protect assets, and facilitate long term growth.
French professionals often coordinate a team for structuring matters, including corporate lawyers, tax advisers, and notaries. Depending on the deal, you may also work with accountants, auditors, and the competent regulator. Understanding the core concepts early helps prevent costly revisions later in the lifecycle of a business.
Why You May Need a Lawyer
- Raising venture capital for a French start-up in a SAS - A Paris based SaaS company plans a €5 million equity round from a foreign VC. A lawyer helps design preferred share provisions, protective covenants, and a flexible governance framework to satisfy both founders and new investors.
- Converting a family business from SARL to SAS for external investment - A second generation owner wants open governance and easier admission of external funds. Legal counsel drafts the transformation plan, amends the articles, and coordinates with stakeholders and notaries.
- Structuring cross border investment via a French SPV - An international group wants to invest in a French manufacturing unit. A lawyer selects the optimal vehicle, defines cap table allocations, and ensures tax and regulatory alignment for both sides.
- Compliance with beneficial ownership and anti money laundering rules - A startup must identify and disclose ultimate beneficial owners. A lawyer guides the disclosure obligations, records, and ongoing reporting processes to regulators.
- Mergers, acquisitions or disposals involving French targets - An acquirer plans an asset or share deal and requires due diligence and post deal reorganization. Legal counsel structures the deal flow, sequence, and integration plan to minimize risk and maximize value.
- Ongoing corporate governance and regulatory reporting - A listed or large private company needs robust governance, shareholder agreements, and director duties. A solicitor drafts or negotiates protected provisions and ensures compliance with French rules.
Local Laws Overview
The following laws and regulations are central to Investment & Business Structuring in France. They shape how structures are formed, operated, and regulated within the French legal system.
Loi n° 2019-486 du 22 mai 2019 relative à la croissance et la transformation des entreprises (PACTE) - This law modernizes the corporate environment, simplifies company creation, and expands governance flexibility for certain forms such as the SAS. It aims to simplify administrative procedures and facilitate investment into French entities. It has progressively been implemented since enactment in 2019.
“The PACTE law aims to simplify the creation of companies and accelerate growth.” Source: Legifrance
Loi n° 2016-1691 du 9 décembre 2016 relative à la transparence, à la lutte contre la corruption et à la modernisation de la vie économique (Sapin II) - This statute broadens transparency and anti corruption measures. It introduced the national register of beneficial owners (registre des bénéficiaires effectifs) and tightened corporate governance and compliance expectations for businesses, including investment vehicles and structures used for French activities.
“Sapin II establishes enhanced transparency and anti corruption measures for corporate structures.” Source: Legifrance
Code de commerce - Société par actions simplifiée (SAS) et autres formes de sociétés - The Code de commerce governs corporate forms, governance, and corporate actions in France. It provides the framework for SAS, SARL and other entities, including capital rules, administrative formalities, and shareholder rights. The Pacte law in particular has updated certain governance provisions to improve flexibility.
Recent developments emphasize compliance and supervisory reporting for corporate structures involved in investment activities. Regulators and registries require timely filings, accurate beneficial ownership information, and sound corporate governance. Always verify the current articles and implementing decrees to ensure alignment with the latest requirements.
Frequently Asked Questions
What is the purpose of Investment and Business Structuring law in France?
It governs how businesses are organized, funded, and run in France. It covers company forms, capital structures, governance, and cross border investment. The goal is to enable credible investment while ensuring transparency and compliance.
How do I decide between SAS and SARL for a new French company?
SAS offers flexible governance and easier investor participation, which is attractive for startups and VC funding. SARL provides simple rules and more predictability for small, closely held businesses. A lawyer can tailor the choice to ownership, funding needs, and exit strategies.
What are typical costs to hire a French Investment & Business Structuring lawyer?
Fees vary by complexity and region. Expect hourly rates ranging from €150 to €350 for junior lawyers and €300 to €700 for partners on complex deals. Some matters use fixed fees for specific tasks like incorporation or drafting shareholder agreements.
Do I need a lawyer for cross border investment into France?
Yes. A lawyer helps structure the investment to optimize tax, compliance, and risk. They coordinate with local counsel in other jurisdictions and ensure proper regulatory filings.
What is the Beneficiary Owner (Bénéficiaire Effectif) concept in France?
The beneficial owner is the natural person who ultimately owns or controls a company. French law requires accurate disclosure and ongoing updates to registries to curb illicit activities. Compliance reduces regulatory risk during audits and investments.
How long does it take to set up a French SAS?
In typical cases, preparing and filing documents takes 2 to 4 weeks after receipt of all required information. Incorporation time depends on the readiness of shareholders agreements, articles, and regulatory filings.
What is a shareholder agreement and why is it important in France?
A shareholder agreement defines rights and obligations among owners, including exit mechanisms and drag along or tag along rights. It complements the Articles of Association and provides predictability for investors and founders.
Can a non resident establish a French company?
Yes. Non residents may form French entities like a SAS or SARL. They must comply with French corporate, tax, and anti money laundering requirements, and may need local agents for representation.
What is the process to execute a share transfer in France?
The process typically requires board or shareholder approvals, update of the share register, and notification to regulators if the target is regulated. Legal counsel coordinates documentation and filing timelines to avoid delays.
Should I consider restructuring a family business for succession in France?
Yes. A carefully designed restructuring plan can facilitate succession, protect assets, and optimize tax outcomes. A lawyer helps select a suitable structure (for example, SAS holding) and coordinates with tax advisors and notaries.
Do I need regulatory approvals for specific sectors in France?
Some sectors require sector specific approvals or public procurement rules. A lawyer identifies any licensing, environmental, or regulatory hurdles early in the project. This reduces delays and ensures compliance throughout the transaction.
Can I structure investments through a French SPV?
Yes. A French SPV (special purpose vehicle) can isolate risk and simplify governance. A lawyer designs the SPV's share structure, financing terms, and inter party agreements for tax and regulatory alignment.
Additional Resources
- Infogreffe - Official registry and information portal for French companies, including filing and corporate data. Website: infogreffe.fr
- Institut National de la Propriété Industrielle (INPI) - National institute for intellectual property, including patents, trademarks, and designs; essential for brand and IP structuring. Website: inpi.fr
- Autorité des marchés financiers (AMF) - Regulator of financial markets and investor protection; provides guidelines on corporate governance, disclosures and investment funds. Website: amf-france.org
Next Steps
- Clarify your objective and the preferred corporate form for France (SAS, SARL, etc.).
- Gather key documents, including identity papers, ownership records, and any existing shareholder agreements.
- Identify the scope of services you need from a European or French lawyer (formation, governance, M&A, or compliance).
- Research and shortlist French lawyers with a focus on Investment & Business Structuring and cross border experience.
- Schedule initial consultations to discuss structure, risk, and timeline; prepare a list of questions and a budget.
- Request engagement letters outlining fees, deliverables, and a proposed project timeline.
- Enter into a structured engagement and begin drafting the Articles, shareholder agreements, and any required filings.
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Disclaimer:
The information provided on this page is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and relevance of the content, legal information may change over time, and interpretations of the law can vary. You should always consult with a qualified legal professional for advice specific to your situation.
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