Doing business in France

Doing business in France July 2006 Contents Chapter 1. Setting up å.Options ç.Streamlined formalities é.Choice of legal structure è.Partnerships a...
Author: Albert Harris
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Doing business in France

July 2006

Contents

Chapter 1. Setting up å.Options ç.Streamlined formalities é.Choice of legal structure è.Partnerships and takeovers ê.Business real estate ë.Special formalities for classified facilities

4 6 7 9 11 13

Chapter 2. French labor law å.Labor relations ç.Employee profit-sharing é.Flexible working hours è.Health and social security

15 17 17 19

Chapter 3. Expatriate staff å.Two different sets of rules for secondment or transfer of employees to France ç.Administrative formalities é.Choice of health coverage and social security system è.Tax rules for expatriates ê.Expatriates’ families

21 21 25 25 26

Chapter 4. Taxation å.Corporate income tax ç.Repatriation of profits é.VAT and customs duty è.Local taxes ê.Tax incentives for investors ë.Special rules for headquarters and logistics centers



29 30 31 32 32 34

Chapter 5. Financial assistance to companies å.Investment and job-creation assistance ç.Employee training assistance é.Research and development assistance è.Competitiveness clusters

36 37 37 38

Glossary

39

Links

40

Contacts

41

Invest in France Agency (IFA) is the national body responsible for promoting, prospecting and facilitating of international investment in France. It also coordinates initiatives promoting the appeal and image of France. The IFA network operates worldwide, with offices in France at both national and local level. It draws on the expertise of specialists in a range of disciplines based at its head office in Paris, as well as in offices in North America, Europe and Asia. In France, IFA works in partnership with regional development agencies to offer international investors outstanding business opportunities and customized services. Infos on www.investinfrance.org

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Chapter 1. Setting up

Disclaimer: This document presents the basic rules applying to international companies that locate business activities in France. Intended as a practical review of the general situation, it presents key information about legal, tax and labor issues to facilitate companies’ decision-making. The information it contains is not comprehensive and IFA cannot be held liable for any omissions or errors. Investors should use the services of professional consultants to examine the circumstances of each case.

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Chapter 1. Setting up

In principle, there are no administrative restrictions on foreign investment in France. International companies may open locations in France under a variety of forms, depending on investors’ development strategies. Short-term and long-term options can all be implemented with absolutely no legal risks and investors are free to amend their plans once they have been submitted, subject to some simple and inexpensive procedures. FORMALITIES FOR INTERNATIONAL INVESTORS IN FRANCE Current regulations require international investors to complete the following formalities: - File a statistical return with a credit institution for transactions in which non-residents acquire more than 10% of the equity or voting rights in a resident company, - File an administrative return with the Ministry of the Economy (Treasury and Economic Policy Directorate) for investments that create new companies or result in the acquisition of an equity interest in a French company involving more than a third of its shares or voting rights, if the investment is greater than €1.5 million. - Request prior authorization from the Ministry of the Economy for investments relating to the following 11 activities (for investments from outside the European Economic Area, reduced to 7 sectors for European investors): gambling; private security services; the prevention of illicit use of biological or toxic agents; equipment designed to intercept correspondence; the evaluation and certification of systems used in information technology; the production of goods or provision of services relating to the security of information systems; goods and technology with dual applications; encryption and decryption systems for digital applications; businesses certified for national defense; trade in weapons, munitions and explosives for military applications or equipment used in warfare; businesses under contract to supply research or equipment to the Ministry of Defense. For more information: Articles L151-1 to L152-6 of the French Monetary and Financial Code. Ministerial order of March 7, 2003. Decree 2005-1739 of December 30, 2005 on regulation of foreign financial relations.

å. Options Practical implementation of a decision to set up in France depends on the investor’s strategy and the degree of independence that the French operations are to have from the parent company. Each option creates specific obligations with regard to tax and company law.

å.1. Short-term solutions A foreign company that wants to prospect for business in France and promote its products can start by having a single employee or by opening a liaison office.

å.1.1. Liaison offices: locations that do not engage in commercial activity

A foreign company may recruit or send an employee to France to represent it through a local liaison or representative office. Liaison offices may conduct only non-commercial operations, such as prospecting, advertising, providing information, storing merchandise, or other operations of a preparatory or auxiliary nature. Such offices are not separate legal entities. Invoices must be issued by the parent company, which must also sign any contracts. Liaison offices are not permanent establishments with respect to tax laws. They are not subject to corporate income tax or VAT, but must pay certain local taxes and payroll taxes. Liaison offices can only be a temporary solution. Companies may ask the tax authorities* to determine in advance whether their office qualifies as a permanent establishment. If an office engages in commercial transactions there is a risk that it may be reclassified as a branch. * DGI Service Juridique, Bureau T1 at 11, rue Tronchet 75380 Paris cedex 08

å.1.2. Sales representatives Sales representatives may either be employees of foreign companies or traveling sales representatives (VRP). Traveling sales representatives are sales intermediaries employed by one or more companies to call on their customers in the representative’s sales territory. These representatives work independently, calling on prospects to offer goods and services. Their primary tasks are making sales calls, taking orders and submitting them to their employers. Traveling sales representatives have a particular legal status in France and receive special compensation should their contract be ended.

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Chapter 1. Setting up

Their sales activities are taxed in France and require that the representatives be empowered to sign contracts on the employer’s behalf. For more information: Article L 751-1 and following of the French Labor Code.

å.1.3. Sales agents Foreign companies may also use the services of a sales agent, i.e. a self-employed individual or a company that acts on their behalf. Agents are responsible for negotiating and in some cases signing contracts for sales, purchases, leases and provision of services on behalf of their principals (i.e., not in their own name). They may work for one or more companies, and in most cases are responsible for a defined geographical area and/or sector of activity. They are paid in part or in full by commissions on completed transactions. Since sales agents are external suppliers and not salaried employees, specific rules apply when agreements with them are terminated. Except in the case of professional misconduct, the agent is entitled to a compensatory payment based on gross commissions received; in principle, this will represent the equivalent of two years of same. Smaller companies often prefer to use sales agents as a flexible and inexpensive means of introducing their products to foreign markets. For more information: Article L 134-1 and following of the Commercial Code French association of sales agents: www.apac.asso.fr Fédération nationale des agents commerciaux: http://www.comagent.com/ http://www.indexagent.com/index.php?page=lexique

å.2. Long-term solutions Companies can set up a branch or a subsidiary to conduct manufacturing or sales operations in France through a permanent principal or secondary establishment.

Doing business in France - www.investinfrance.org

å.2.1. Branches — The simplest solution Branches enable foreign companies to establish a beachhead in France for a commercial activity. Branches are headed by a legal representative and operate like agencies that report to headquarters, with no official restrictions on their decision-making powers. They may conduct all the operations of an industrial or commercial company, but are not separate legal entities and parent companies are answerable for all of their initiatives. Thus, if they encounter financial problems the parent company bears unlimited joint liability for their debts. Branches are permanent establishments with regard to tax laws and must pay corporate income tax and VAT. Subsequent conversion of a branch into a separately incorporated subsidiary is possible, but must comply with rules governing the sale and transfer of business and is subject to tax.

å.2.2. Subsidiaries — Companies incorporated under French law

Subsidiaries are new companies incorporated under French law and separate legal entities. They offer several advantages: - Segregation of subsidiaries’ and parent companies’ assets means that foreign companies do not bear unlimited liability for the debts of their French structures. On the other hand, subsidiaries’ losses cannot be offset against parent companies’ profits. - Subsidiaries are entitled to renewable commercial leases. - Subsidiaries may apply for government assistance when starting up or expanding. - Subsidiaries can enter into agreements on sales and technical royalties, commissions, management fees, etc. The basic preliminary steps for setting up a subsidiary are: - Seeking public or private sector financing (loans, venture capital, business angels, innovation mutual funds, etc.) - Seeking business premises and the domiciliation of the company’s headquarters through a domiciliation agreement, a commercial lease, or a real estate purchase - Appointing the company’s corporate officers - Constitution of the company’s capital - Opening a bank account in France and depositing the new company’s initial capital reserve

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Chapter 1. Setting up

- Having capital contributions in kind appraised by an official appraiser - Appointing one or more auditors as required - Drawing up the articles of incorporation and signing them (before a notary if the company owns real estate) - Registering the articles of incorporation with the tax office for the headquarters location (no fee for this formality) - Obtaining long-term visas and business permits for non-EU directors - Publishing notification of the new company’s inception in a legal gazette.

The Business Formalities Center provides the registration application form (MO form) and the list of documents to be submitted (these must be translated into French). The application must be filed by a duly empowered person with written authorization from the company.

The company becomes a separate legal entity when it is entered in the company register (Registre du Commerce et des Sociétés). The founders are personally liable for their legal commitments during the inception phase, which are then assumed retroactively by the newly incorporated company.

Administrative formalities cost approximately €76.19 (as of January 1, 2005), plus the cost of publishing a notice in the legal gazette (approximately €230). It is now possible to complete the formalities for setting up, changing or closing a company on line.

The subsidiary must pay all applicable taxes. Assistance from specialized legal counsel is recommended when setting up a subsidiary. Bar associations can provide lists of lawyers in France. For more information: French national bar association: www.cnb.avocat.fr

ç.Streamlined formalities The introduction of one-stop service has greatly simplified the administrative formalities for setting up businesses.

ç.1.One-stop shop All of the formalities for setting up a new company can be dealt with in one place: the Centre de Formalités des Entreprises (CFE). The center will take charge of all documents required to set up, change or close down companies and deliver them to the relevant authorities: - The Commercial Court Clerk’s Office will first issue, free of charge, a Business Creation Certificate (implemented at the end of 2004), and then issue a K-bis registration certificate, once the company has been registered - The French National Statistics Institute (INSEE) will determine the relevant activity code (APE) for the company and issue SIREN (company identification) and SIRET (local unit identification) numbers required for recruiting staff - The tax authorities (Centre des impôts) and social security agencies, including URSSAF (Union de Recouvrement des cotisations de Sécurité Sociale et d’Allocations Familiales), which collects payroll taxes. Doing business in France - www.investinfrance.org

It takes a few days for a company to be recorded in the company register (RCS). When a company is “pending registration”, its legal representative can use the Business Creation Certificate for dealings with the authorities and public and private sector organizations (e.g. accessing the new company’s bank account).

There are some formalities that the business formalities center does not handle: - Applications for authorization to engage in regulated professions, licenses or registration with professional associations for lawyers, accountants, architects, physicians, etc. - Proof of address - Formalities to register trade names and brands with France’s National Industrial Property Institute (INPI) - Registering internet domain names ending in “.fr” with the French Internet Names and Cooperation Association (AFNIC) - Registration of the company with an insurance center - Registration with an employee retirement plan (must be done within three months of registration). Formalities relating to hiring employees must be completed with URSSAF using a special form (Déclaration Unique d’Embauche). INDUSTRIAL PROPERTY RIGHTS French industrial property laws provide effective protection for patents, trademarks, models and designs. INPI is the core of the French protection system, and filings with it are the starting point for patent and trademark protection. Industrial property rights entitle patent holders to a monopoly on use for 20 years. Trademarks are valid for 10 years and can be renewed indefinitely. Models and designs are protected for 25 years. Company names, trade names and logos are also protected and can be cited in unfair competition suits.

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Chapter 1. Setting up

ç.2.Registering a liaison office In principle, a liaison office does not need to be registered. Companies with no commercial activity must, however, be registered if they have their own premises or if they have more than one employee in France. Documents to be submitted concern the representative (proof of identity, police record, specific documents for expatriates, business permits if necessary), two copies of the company’s articles of incorporation translated into French, as well as a document attesting tenancy or ownership of premises.

ç.3.Formalities for sole representatives in France

Representatives must register with URSSAF directly using the “EO” form and submit a copy of their contract of employment as well as the Déclaration Unique d’Embauche. URSSAF will assign them a SIRET number and notify the authorities concerned. Such employees pay their own employer and employee social security charges every quarter. A sales agent must be registered with the special register of sales agents.

ç.4.Branches must be registered Registration is required for branches. The registration application must include: - Two copies of the parent company’s articles of incorporation (two originals and two translated into French by a court-approved translator) - Proof of address - Certificate of good standing from the foreign company register - Documents relating to the person empowered to act on behalf of the company (including the business permit, as appropriate).

ç.5.Registering subsidiaries The registration application for the new company must include: - Two original copies of the articles of incorporation giving the names of the directors and, where appropriate, the names of the statutory auditors - Two copies of the official appraiser’s report, if capital contributions in kind are involved - A copy of the lease or ownership deed to the business premises - A copy of the legal gazette containing notification of the company’s inception - Copies of the directors’ birth certificates, identity cards or passports, along with a police clearance record.

Doing business in France - www.investinfrance.org

- If appropriate, a copy of the professional card, or degree or certificate required to engage in regulated professions - If appropriate, the business permits or residence permits of the directors - A certificate of deposit from a bank for the new company’s initial capital reserve - A summary of the formalities completed on behalf of the new company. The K-Bis certificate issued by the court clerk’s office is proof that the company has been set up. For more information: http://www.greffe-tc-paris.fr/rcs/rcs.htm

é.Choice of legal structure The choice of legal structure depends on the investor’s strategy. This choice will affect the company’s legal status, taxes, assets and labor relations.

é.1. Joint stock companies are the most common choice in France

Joint stock companies limit the owners’ financial liability to the amount of their capital contributions. Such entities can easily be converted into other forms of companies with minimal tax consequences. The rules governing companies have become much more flexible, with the introduction of simplified joint stock companies (SAS/SASU), which have greater freedom to draft their articles of incorporation to suit their own purposes. The elimination of the minimum capital requirement for limited-liability companies (SARL) has also resulted in greater flexibility. By the same token, French company law has kept step with modern technology: measures have just been adopted to allow meetings of boards of directors and supervisory boards to be held remotely (by video-conference or other means) except in cases where company bylaws stipulate physical meetings or where annual or consolidated financial statements and management reports must be validated. For more information: Articles L223-1 and following of the Commercial Code Act 2005-842 of July 26, 2005

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Chapter 1. Setting up Limited-liability company (SARL) (1)

Key advantages Directors

Minimum capital

Public limited company (SA) usual form (Board of directors) (9)

Simplified company by shares (SAS)(6)

Partnership limited by shares

Easy to set up and operate Structured for "monitored At least one partner. Structured for a high for a closed ownership delegation". Organization Freedom to amend degree of delegation. structure. of ownership. articles of incorporation(5) Takeover-proof structure. One or more directors, One individual to be the At least 1 Chairman One or more directors who who must not be corporate Chairman of the Board (individual or legal entity) do not have to be partners. entities, but do not need to and CEO or two individuals and possibly a board with A supervisory board with be partners. to be Chairman and CEO other members. at least 3 silent partners respectively. Deputy CEOs The company can be (up to 5) Board of directors represented by a person with 3 to 18 members and so empowered by the a statutory auditor. articles (CEO or deputies). No minimum (7). The capital amount is set by the articles of incorporation. Industrial contributions possible. (8) 2 to 100 individuals and legal entities. At least 1 meeting per year: annual approval of the accounts, review of contracts by simple majority at Ordinary General Meeting

€37,000 (2). €37,000. (2). €37,000. (2) (3). Public offerings allowed No public offerings Industrial contributions (8) if share capital is greater allowed. allowed for general than €225,000. partners and banned No industrial contributions for limited partners. allowed (8) At least 7 (with at least No industrial contributions At least one general one natural person). allowed. partner and 3 silent At least 1 meeting per At least 1 individual or partners. year: annual approval of corporate entity. Decisions made by the accounts and ordinary Only certain decisions general partners (usually decisions by simple made by Ordinary General unanimously) and silent majority at Ordinary Meeting: approval of the partners. General Meeting, changes accounts, mergers, to articles of incorporation changes in capital, require 2/3 majority at liquidation. Extraordinary General Meeting.

Quorums for meetings

25% of voting rights on first notice and 20% on second notice of Extraordinary General Meeting (since August 2, 2005)

For an Extraordinary General Meeting, 25% of voting rights on first notice and 20% on second notice. For an Ordinary General Meeting , 20% on first notice and no quorum on second notice.

According to articles; no obligation to hold an annual meeting of shareholders

All general partners must be present; for limited partners, same quorums as for public limited companies.

Blocking minority

Extraordinary General Meetings: 33% + 1 vote for amendments to the articles of incorporation (from Aug. 2, 2005). Ordinary General Meetings: 50% of voting rights + 1 (or majority of votes on second notice)

1/3 of votes at Extraordinary General Meeting. 50% at votes in Ordinary General Meeting

According to articles.

Ordinary General Meeting: according to articles

Liability of partners / shareholders

Limited to contributions, except in civil or criminal suits

Limited to contributions, except in civil or criminal suits

Limited to contributions, except in civil or criminal suits

General partners: Unlimited joint liability. Silent partners: Limited to contributions.

Transfers

Shares are transferable to third parties by majority of partners representing at least half of shares (articles may specify a larger majority)

Shares are transferable Shares transferable unless there is a clause unless there is an approval requiring approval of new clause shareholders (registration tax: 1.10% of amount transferred) up to €4,000

Specifics

Registration tax for transfers (4) Auditor necessary if company exceeds two of the three thresholds below: net sales over €3.1m; total balance sheet over €1.55m; more than 50 employees)

Statutory auditor required

Statutory auditor required

Statutory auditor required

Tax regime

Corporate income tax

Corporate income tax

Corporate income tax

Corporate income tax

Partners / shareholders

Transfer of shares for silent partners. Transfer of shares for general partners (unanimous decision).

(1) A limited-liability company (SARL) may be set up with a single shareholder (EURL), who can then choose to pay personal income tax or corporate income tax on the company’s earnings. (2) Cash contributions can be made in installments: half at the time the company is set up and the remainder over 5 years. (3) Variable capital is possible. (4) Registration fee in case of sale: 5.80% of the acquisition price paid by the buyer. Exemption on first €23,000 scaled down to reflect percentage of shares sold. (5) Relationships between shareholders, management, organization of ownership and share transfers. (6) A simplified joint stock company (SAS) can also be set up with a single individual or corporate shareholder (SASU). (7) However, a company must have enough capital to meet its long-term needs. In any event, at least at least 25% of capital contributions must be paid up. (8) Contributions where a partner or future partner gives the company the benefit of his activity, work and working knowledge. Such contributions are not added to capital but they do give rise to a distribution of shares entitling the holder to a percentage of earnings and a voice in company decisions. (9) There are also companies with an executive board and a supervisory board, which are one variety of limited company. The executive body is an executive board with 2 to 5 members or a single general manager. The supervisory board has 3 to 18 members, who must all be shareholders. Its job is to supervise operations, but it also takes part in management Doing business in France - www.investinfrance.org

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é.2.Other structures Other structures may also be considered, such as partnerships (SNC), non-trading companies and European Economic Interest Groupings (EEIG). These structures are less common because the partners’ financial liability is greater or even unlimited. On the other hand, they entail no minimum capital requirement, they are flexible to operate and their earnings and gains are tax transparent. These features make them attractive options for subsidiaries. Undeclared partnerships are used in the construction industry, in show business and in publishing. They are easy to set up, since registration is not required, and they shield the investors’ identities, since there are no disclosure requirements.

é.3.European companies By incorporating as European Companies (SE), companies can benefit from a single set of rules and a unified management and financial disclosure system. European Companies must be established in at least two European Union Member States and the minimum capital requirement is €120,000. The registered office stipulated in the articles of incorporation must be in the same place as the company’s administrative headquarters. The location of the registered office determines which country’s business laws apply and in which country the company is incorporated. A European Company is subject to taxation in all of the Member States where it has permanent establishments. For more information: Regulation EC No. 2157/2001 of October 8, 2001 on the Statute for a European Company (SE), OJEC L 294 of November 10, 2001 (in force as of October 8, 2004). Articles L 229-1 and following of the Commercial Code Decree 2006-448 of April 14, 2006.

è.Partnerships and takeovers French law makes full provision for business partnerships and takeovers.

è.1.Acquiring equity in a company è.1.1.Administrative formalities Acquisition of equity may be the result of an agreement between companies or an unsolicited bid to buy shares (hostile takeover bid). The rules governing market transparency require buyers to make certain disclosures when more than 5% of the shares or voting rights in a listed company are likely to change hands:

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- A declaration must be filed with the financial market authority within 5 days. - The target company must be notified within 15 days. The same rules apply to transactions that exceed thresholds, up or down, of 10%, 15%, 20%, 25%, 33%, 50%, 66%, 90% and 95% of the shares or voting rights. When buyers intend to acquire more than 33% of the shares in a listed company, they are required to make a bid for all of the outstanding shares so that minority shareholders have an opportunity to sell their shares. For more information: Article L433-1 and following of the French Monetary and Financial Code. Financial Security Act 2003-706 of August Act 2005-842, “Breton Act” promoting confidence and modernization of the economy dated 26 July 2005.

è.1.2.Prior notification to competition authorities of large-scale business concentration

Business concentration results from the following transactions: - Mergers of two or more independent companies - Full or partial takeovers - Creation of joint ventures that conduct their business independently on a long-term basis. In principle, concentration is authorized, however large-scale business concentration operations may require prior authorization from national or European authorities. Restrictions on concentration are intended to ensure that market dominance by a single company does not distort competition. Business concentration transactions require the authorization of the Minister responsible for the economy if: - The aggregate sales of the companies concerned are more than €150 million, excluding tax, and - The aggregate sales of at least two of the companies in France are more than €50 million, excluding tax, while remaining below EU thresholds. The notification procedure may take up to five weeks. However if the transaction is likely to distort competition, it may be referred to the Competition Council, which has three months to give its ruling. Notification is now possible for proposals still in the preparatory stage on condition that work be sufficiently far along to allow the authorities to undertake a meaningful examination of the project. For more information: Article L430-1 and following of the Commercial Code. See also General Directorate for Competition Policy, Consumer Affairs and Fraud Control: www.finances.gouv.fr/DGCCRF and the French Competition Council: www.conseil-concurrence.fr AFII – © 2006



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The European Commission in Brussels must be notified of concentrations if: - The aggregate worldwide sales of the companies concerned are more than €5 billion, and - Individual sales of at least two of the companies concerned in the European Union total more €250 million, except if sales within a single country account for more than two-thirds of each of the companies’ total European Union sales. The European Commission must also be notified of transactions that do not exceed the above thresholds if they concern three or more European Union countries. The procedure for examining concentration can take up to eight months and the transaction is frozen until the authorization decision is made.

Following the reform, the sole aim of this procedure is to produce a plan that will enable the company to remain in operation, maintain jobs and reduce its liabilities. Assets can only be sold in keeping with liquidation procedures. Consequently, once a protection or reorganization procedure has been launched, third parties may submit to the administrator offers that enable the company to remain in operation through the total or partial sale of business; these offers will be processed in keeping with liquidation proceedings. Buyers must make their offers to the court-appointed administrator before the deadline set in the court ruling initiating the proceedings (court rulings are published in the legal gazette, Bulletin Officiel des Annonces Civiles et Commerciales).

For more information: Regulation EC No. 4064-89 of December 21, 1989, OJEC L395, of December 30, 1989. Regulation EC No. 139/2004 of January 20, 2004, OJEC L24, January 29, 2004 See Europa/Commission Européenne/Concurrence

For more information: Art. L620-1 s. Code de Commerce Act 2005-+845 dated 26 July 2005.

è.2.Management leases are a temporary ta-

Part or all of a company’s assets may be sold to ensure that those operations that can be operated autonomously remain in business, to preserve all or part of jobs relating to it, and to reduce liabilities.

keover option

Under a management lease, the owner or operator of a business or a manufacturing establishment signs a contract with a lessee manager, who operates the leased company at his own risk and pays a lease payment. The lessor collects the lease payments and has no say in the management of the leased business. This arrangement enables the lessee manager to operate a company without having to buy it. It is a temporary solution that can be used to assess the viability of a business. At the end of the lease, the company may be sold or transferred to the lessee manager.

è.3.Taking over a troubled company Legislation dated 26 July 2005 that entered into force on 1 January 2006 modified bankruptcy law in France including in particular procedures for the takeover of a company in difficulty. With the introduction of a procedure affording protection before insolvency, measures can now be taken when a company’s difficulties are such that insolvency seems likely. This procedure does not provide for the sale of all or part of company assets, for which liquidation proceedings are necessary. Reorganization of the business (redressement) can only take place when the company is insolvent, i.e., when its assets are not enough to cover liabilities due.

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è.4.Acquiring a company that has gone into liquidation

The courts prefer buyers offering the best prospects of keeping the company in business, saving jobs and repaying creditors. Offers must include detailed list of assets, rights and contracts included in the offer; a business recovery plan and financing forecasts; the purchase price and how this will be paid; information about the providers of funds and, where warranted, their guarantors (if the offer is based on loans, it must specify terms and duration), the date of sale, job numbers and outlook based on projected operations, financial guarantees underpinning execution, asset disposal plans for the next two years, and the duration of each commitment made by the buyer. Offers cannot be amended or withdrawn once they have been filed with the court clerk’s office except for amendments that improve conditions for employees and creditors, which may be presented up to 48 hours prior to the hearing. The court then decides whether to make a partial or full sale of the business and gives the reasons for its decision. Some contracts may be transferred to the new owner, including employment contracts, equipment and finance leases, supply contracts for goods and services necessary to keep the business going, contracts with customers, etc.

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If no solution can be found to keep a business going or if recovery is clearly impossible, the court will liquidate the troubled company and the assets will be sold to the highest bidders once the court proceedings have been completed. For more information: Article L640-1 and following of the Commercial Code. See new legislation for the protection of companies in difficulty: Act 2005-845 of 26 July 2005, http://www.actifsjudiciaires.org/

ê.Business real estate Several options are available, depending on the investors’ needs.

ê.1.Temporary options ê.1.1.Using the director’s personal address for the company

As a general rule, a company is allowed to use its legal representative’s personal residence for its registered office and to conduct its business there indefinitely. If the residence is rented, the landlord’s written consent is required. In towns with populations of more than 10,000 and in the Paris region, there are restrictions on using the director’s personal residence for the company’s business. These restrictions stipulate that the premises must be the director’s principal place of residence and that the business done there must be conducted by the director and the other occupants of the premises only and there must be no reception of customers or merchandise at the residence. If legislative or contract provisions rule out the use of the director’s personal residence as the company’s registered office, it is still possible to use the address for administrative purposes for up to five years. In this case, it is illegal to conduct any business activities on the premises.

ê.1.2.Using a business center A business center can be used as the company’s temporary registered office. Business centers are specialized service companies that provide registered office addresses for other companies and rent them rooms for holding periodic board meetings. These centers also provide other services, such as answering telephone calls and secretarial services. A contract must be signed between the company using the address for its registered office and the owner or tenant of the premises.

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ê.1.3.Temporary manufacturing facilities Companies can use temporary manufacturing facilities to train new employees and even start up their business while their new plants are being built. Many local governments offer such facilities to companies locating in their area. The leases run for up to 23 months and, in some cases, they come with a purchase option, subject to certain conditions.

ê.1.4.Business incubators Business incubators provide premises (offices, workshops, laboratories, common areas) for start-ups and enable them to share the costs of faxes, secretarial services, photocopiers, switchboards, training and database access. Business incubators also advise new companies on business development. For more information: French innovation agency: www.oseo.fr http://www.fir.asso.fr/presentation/presentation/liste_PFIL/view http://cordis.europa.eu/incubators/

ê.1.5.Short-term leasing options for business premises

ß Sub-letting In its early stages, a company can sub-let premises from another company. If the host company holds a commercial lease, the lease must explicitly authorize the sub-let and the lessor must be asked to be a party to the sub-letting contract.

ß Short-term leases Short-term leases are available with terms up to 24 months. The advantage of such leases is that the term can be tailored to the tenant’s needs; the drawback is that the tenant is not entitled to automatic renewal of the lease.

ê.2.Long-term options ê.2.1.Commercial leases Manufacturing and trading companies generally sign commercial leases. Such leases are governed by strict legal provisions that protect the tenant’s rights. The statutory term is nine years, but the tenant can terminate the lease at the end of the third or sixth year. The tenant is legally protected against non-renewal or eviction. The lessor must pay eviction compensation that is proportionate to goodwill and the right to the lease. Rent increases are controlled and capped. The lease stipulates the commercial purpose of the premises (activity), but the parties to the lease can agree to amend the lease to change the initial purpose or add another activity (despecialisation). AFII – © 2006

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Chapter 1. Setting up

The right to lease renewal extends to all companies incorporated in France, even when they are foreign owned. This right does not extend to branches of foreign companies, unless provided for by a reciprocity clause in an international agreement. For more information: Article L145-1 and following of the Commercial Code.

ê.2.2.Professional leases Non-trading businesses may rent premises under the terms of “professional” leases, which do not offer as much protection for the tenant as commercial leases. The statutory term is six years with no early termination option, but companies have greater flexibility for negotiating the terms of their lease.

ê.3.Purchasing property ê.3.1.Full ownership offers the greatest legal security

Foreign companies are entitled to buy commercial and industrial land and buildings from privatesector and public-sector sellers. Real-estate agents can help them find suitable properties. The laws governing property purchases and the services of intermediaries such as notaries ensure the legal security of real-estate transactions. Government assistance for real estate purchases is available subject to certain conditions.

ê.3.2.Leasing to own is a common practice Many companies acquire industrial and commercial buildings by signing a property finance lease. Such leases generally run for nine to 15 years and title to the property is transferred to the tenant at the end of the term. Local communities may help companies obtain finance leases by arranging meetings with financing organizations. Government investment assistance in the form of discounts on finance lease payments is also available under certain conditions.

ê.3.3.Construction of industrial buildings Foreign investors can erect industrial and commercial buildings in France. Local zoning maps show where construction is allowed and mayors have the power to authorize construction by issuing zoning certificates and building permits. Municipalities offer land-owners and other persons entitled to erect buildings one-stop service for building permit applications.

BUILDING PERMITS Building permit applications consist of a printed form and a portfolio of drawings and written documents that will enable the authorities to ensure that the application is fully compliant with zoning rules. Applicants must use the services of an architect when preparing their applications. The permit procedure starts 15 days after the completed application is filed. The procedure in general takes two months (maximum three months) from this point. When the planned construction work concerns a classified facility, the building permit application needs to include proof that an authorization application or a declaration has been filed with the prefecture. For more information: Articles R 421-18, R 421-19, R 421-38-8 and A 410-2 of the Urban Code All of the necessary forms for zoning and construction are available on line from the Ministry of Public Works: www.equipement.gouv.fr/formulaires. http://www.equipement.gouv.fr/IMG/pdf/9_-_Champ_ application_avant-apres_reforme_cle688b8a.pdf (in French) Details on changes in required forms for zoning and construction following reforms adopted on 8 December 2005 are available here (in French): http://www.urbanisme.equipement.gouv.fr/index.html

ê.3.4.Commercial buildings The construction of stores, hotels and cinemas requires an occupancy permit, in addition to a building permit. A Commercial Zoning Commission or a Commercial Infrastructures Commission at the level of the département manages the application procedures for occupancy permits. For more information Act 73-1193 of December 27, 1973 concerning trade and crafts, and Act 96-603 of July 5, 1006 concerning the development and promotion of trade and crafts. Articles L 451-5 and following of the Urban Code.

ê.3.5.Acquiring premises through a real estate partnership (SCI)

A real-estate partnership is an independent legal entity where the capital is contributed by companies or individuals. It is used to finance premises that can then be occupied by the company. This solution protects the real-estate assets from the company’s creditors. It can also provide tax benefits, since the company can deduct rent and maintenance fees from its taxable income and the partnership can deduct acquisition costs for the buildings if it opts to pay corporate income tax. Investors should hire legal counsel to work out the details of such an arrangement.

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ë.Special formalities for classified facilities

ë.2.Logistics facilities

Concern for preventing hazards, pollution and other nuisances means that preliminary administrative formalities are required before operating certain types of manufacturing plants called “classified facilities”. The classification determines whether facilities are subject to prior authorization or notification, depending on the scale of the hazard or nuisance that they cause.

Logistics facilities are used to store merchandise. Accident prevention rules for indoor storage facilities require prior authorization if the volume of the buildings exceeds 50,000 cubic meters.

ë.1.Authorization procedure Administrative formalities have been streamlined in two ways: - A single environmental protection authorization is issued for each manufacturing site. - The Prefect is the only authority with the power to enforce this legislation, with the assistance of the echnical staff from the Regional Directorate for Industry, Research and the Environment (DRIRE). The Prefect’s decision is based on the findings of an enquiry, during which the public is notified and invited to comment (see local information and monitoring commissions and the permanent secretaries’ offices for the prevention of industrial pollution (SPPPI). The same notification rules are already in force for “Seveso” facilities. Two key documents in the report on a facility’s potential impact on a given area are the environmental impact study and risk study. The Prefect’s order authorizing operations at the facility also sets out the operating requirements. In principle, this order should be issued no more than 8 to 12 months after the application is filed.

ë.3.The “polluter pays”’ principle France applies the “polluter pays” principle to ensure that polluters bear the cost of their emissions and waste. However, the taxes levied are much lower than the actual cost of damage. France has also introduced measures to help companies invest in technologies that are less harmful for the environment. “SEVESO” FACILITIES The so-called Seveso laws require supervision of highrisk establishments, such as petrochemical plants or storage facilities for toxic products and liquefied gas, where there are risks of fire, explosion or noxious gas leaks, etc. Manufacturers operating such facilities must conduct a risk survey and identify hazards involved in their activities. In some cases, they must draw up internal emergency action plans and local mayors are notified of potential risks. For more information European Directive 82/501 of June 24, 1982 on the major-accident hazards of certain industrial activities. European Directive 96/82 of December 9, 1996 on control of major accident hazards involving dangerous substances.

The Prefect may have his staff advise and help investors in the earliest stages of preparing authorization applications to ensure the legal security of major manufacturing projects. For more information: http://www.prim.net/

Doing business in France - www.investinfrance.org

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Chapter 2. French labor law

Disclaimer: This document presents the basic rules applying to international companies that locate business activities in France. Intended as a practical review of the general situation, it presents key information about legal, tax and labor issues to facilitate companies’ decision-making. The information it contains is not comprehensive and IFA cannot be held liable for any omissions or errors. Investors should use the services of professional consultants to examine the circumstances of each case.

Doing business in France - www.investinfrance.org

AFII – © 2006

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Chapter 2. French labor law

France is an industrial economy where labor laws are designed to protect the interests of employees and yet are suited to the economic priorities of business. Labor relations are governed by the Labor Code and by industry-specific collective bargaining agreements that reflect the practices of each industry. Employee profit-sharing and share-ownership plans are encouraged though income tax and payroll tax exemptions. Flexible working hours and manning levels are designed to suit production constraints. For more information Labor Ministry: www.travail.gouv.fr/infos_pratiques Downloadable forms for hiring employees: www.travail.gouv.fr

å.Labor relations Labor relations within a given company are flexible. They are increasingly based on collective bargaining at the industry level and at the level of individual companies, with employee and employer representatives playing a key role in ensuring flexibility. GOVERNING TEXTS: HIERARCHY Parties are free to substitute agreements reached through collective bargaining for certain legislative and regulatory measures so long as these are not contrary to the law. Such agreements include: ß Inter-professional agreements reached at national level to ensure a cohesive overall system ß Industry-specific agreements covering a given profession, which must stipulate as mandatory requirements: minimum wage levels, job classification, collective guarantees for insurance and mutualization of training funds. ß Company or plant agreements reflecting specific features of a company and its employees. Under legislation adopted on May 4, 2004, lower-level agreements reached or revised from this date may replace agreements at a higher level insofar as the latter do not expressly exclude this and on condition that requirements of industry-specific collective bargaining agreements are respected. The law and these collective agreements are the references for employment contracts. For more information: www.legifrance.gouv.fr

å.1.Employment contracts can be negotiated freely within the statutory framework

The most common form of employment contract is an open-ended contract (contrat à durée indéterminée (CDI)) that is generally written in French. In principle, parties are free to write their own contracts and have a great deal of liberty with regard to content, which may include clauses specifying targets for compensation, providing for geographical mobility or requiring employees to cover several professional areas, as well as non-compete clauses, clauses covering ownership of Doing business in France - www.investinfrance.org

inventions and intellectual property rights, etc. However, contracts must not be contrary to the French labor code or to the industry-specific collective bargaining agreement that applies to the employer. The company’s actual activity, as stated in its articles of incorporation, determines which collective bargaining agreement is applicable. See the list of agreements at: www.legifrance.gouv.fr An employment contract must stipulate the employee’s compensation and job description, along with the working hours and place of work. The contract may also provide for a probationary period, which is generally 3 months renewable. Compensation must be at least equal to the minimum wage stipulated by the applicable collective bargaining agreement and the statutory minimum wage, which was set at €8.27 gross per hour on July 1, 2006 or €1254.31 a month full time. The contract may also provide for additional benefits and a profit-sharing scheme. Contrat nouvelle embauche (first-time hires) Under the government ordinance of August 4, 2005, companies with up to 20 employees may also use a new form of fixed-term contract called the CNE (contrat nouvelle embauche). CNEs must be in writing; they allow particularly flexible terms for termination during the first two years (in exchange for payment of an indemnity of 10%). French labor law also allows companies to hire extra staff to meet temporary needs. However, the law restricts the use of temporary employment contracts and temp agency workers to specific situations and generally sets a limit of 18 months on such arrangements. Short-term employment is an effective way for companies to meet their needs, but temporary employment contracts cannot be used on a long-term basis to fill jobs that are related to the company’s regular business.

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Chapter 2. French labor law

å.2. Streamlined administrative formalities for hiring employees

A company can start hiring as soon as it has been registered. France’s national employment agency (ANPE) can help companies by publicizing their vacancies, identifying and short-listing applicants. The ANPE can also offer and organize training courses for applicants. The central government and regional governments, which are responsible for vocational training, can also organize training courses to upgrade and improve the skills of certain categories of future employees to suit the needs of companies locating in France. Companies can obtain government assistance in the form of payroll tax reductions and grants for hiring certain categories of employees. The administrative formalities involved in hiring employees have been streamlined with the introduction of a single reporting form for new hires (DUE). The employer must fill in the form before the new employees start work and send it to the local URSSAF office. The form can also be submitted on line. For more information: www.urssaf.fr/embaucher/rg/mesures.html http://www1.due.urssaf.fr/declarant/home.jsp for déclaration unique d’embauche

å.3.Company directors As a general rule, company directors cannot be bound to their company by an employment contract; the articles of incorporation stipulate the terms of their appointment, compensation and termination. However, some directors may sign employment contracts with their companies, subject to certain restrictions (e.g., managing directors of limited companies, chairmen of joint-stock companies and directors holding a minority stake in limited liability companies).

å.4.Termination of employees on economic or personal grounds

Employment contracts can be terminated at the employee’s initiative (resignation) or at the employer’s initiative (dismissal). Employers must provide real and serious reasons for dismissal, and comply with the legally prescribed procedure.

å.4.1.Layoffs enable companies to adapt to market conditions

Layoffs can be individual or collective. Individual employees must be asked to attend a preliminary interview before they are laid off. The head of the company must meet with the works committee and consult with it about collective layoffs.

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Individual layoffs and layoffs of two to nine employees can only become effective seven days after the interview date, or 15 days, in the case of supervisory personnel. A “job preservation plan” must be drawn up when layoffs of 10 or more employees in a 30-day period have been decided. The plan must explain all action taken to avoid the loss of jobs, such as reorganizing work, job sharing, redeployment of employees inside and outside the company, etc. The plan must also explain the financial terms of the severance package. It is then submitted to the staff representatives and the labor authorities. The notification period for layoffs under a job preservation plan varies according to the number of employees concerned. Layoffs of up to 100 employees can take place 30 days after the labor authorities have been notified of the layoff plan. The waiting period is 45 days for layoffs of 100 to 249 employees and 60 days for 250 or more employees. Severance pay is at least one-fifth of the employee’s monthly pay (including bonuses) for each year of service after two years and 2/15 of the employee’s monthly pay for each additional year beyond ten years. Voluntary departures following job cuts, redeployment or reorganization, and refusals to accept substantial changes to employment contracts are treated as layoffs. For more information Article L122 and following of the Labor Code. STAFF REPRESENTATION The staff representation system varies according to the size of the company and concerns three separate institutions: In companies with more than 10 employees, staff representatives are elected by the employees to present individual and collective pay claims and to ensure compliance with labor laws. A works committee must be set up when a company has 50 or more employees. The committee is elected by the employees to represent their interests when decisions are made about changes in the company and changes in working organization in particular. Trade unions are also entitled to set up bargaining units in a company. Only around 8% of French workers are unionized. Establishments with 50 or more employees must also set up a Joint Safety Committee (CHSCT) to involve the staff in training and other initiatives to prevent occupational risks and improve working conditions.

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Chapter 2. French labor law

COLLECTIVE BARGAINING

é.Flexible working hours

The power to negotiate and enter into collective labor agreements is reserved to union representatives. Where there are no union representative, an industrywide agreement may allow the employer to negotiate with elected staff representatives, either those making up the works council or chosen as delegates. Failing this, in which event the situation must be confirmed in a written report, the employer may be authorized to negotiate with an employee mandated for this purpose. The result of these negotiations must then be submitted to staff for approval by a majority of votes cast.

France offers very flexible working organization and hours to enable companies to make the best use of their plant and equipment and increase productivity.

å.4.2.Dismissal on personal grounds Personal dismissal procedures can be initiated for misconduct on the part of the employee or conduct that is not actually delinquent, but nevertheless harms the company’s interests. A warning is often issued before initiating the dismissal procedure. The employee must be given an opportunity to provide explanations at a preliminary interview, before the dismissal becomes effective. The employer must also comply with the notice period that the employee is entitled to under the law or the relevant collective bargaining agreement. In principle, the notice period is two months for employees with more than two years of service. Employees are not entitled to severance pay in cases of serious misconduct.

å.5.Retirement from age 60 The statutory retirement age is 65, but employees may retire after their 60th birthday if they have paid into the statutory retirement scheme for 40 years, or 160 quarters. This requirement will be extended to 42 years in stages between now and 2020. The French government pays retirement pension benefits. For more information www.retraites.gouv.fr

ç.Employee profit-sharing In addition to their wages and salaries, employees and corporate officers may be offered employee profitsharing and savings schemes that are attractive for workers and provide tax benefits for both employees and employers. The range of schemes available enables companies to set up compensation and benefits systems tailored to their specific needs, including supplementary retirement and family benefits, stock options, corporate and intercompany employee savings programs, etc.

é.1.The 35-hour week: far more flexible since 2003

Statutory working hours in France are 35 actual hours worked per week. Maximum working hours are 10 hours per day and 48 hours per week. Over a 12-week period, the maximum is an average of 44 hours per week (see adjustable working hours). Hours worked in excess of statutory working hours are counted as overtime. Overtime pay is at least 10% more than regular pay in companies with up to 20 employees, and 25% more in other cases failing an industrywide agreement. The regulatory limit on overtime is 220 hours per year, which increases annual working hours to 1,827, which works out to 39 hours per week for 47 weeks. This limit on overtime may be exceeded by employees who so wish, with the agreement of their employer, under a collective agreement (régime des heures choisies). In addition to extra pay, working overtime may also give employees a statutory right to extra time off. Extra time off in lieu of overtime pay is also a possibility. Time off in lieu of overtime pay must be added to the statutory time off entitlement. The 35-hour week does not apply to executives, to whom regulations on night work, daily and weekly rest periods, and days off do not apply either. By the same token, management personnel who are free to organize their own work and non-management employees working off the premises, such as sales representatives, maintenance technicians, etc., may be subject to agreements based on a basic number of hours or days worked; such agreements must be written. Management personnel free to organize their own work are offered annual packages that stipulate the annual number of days worked, with a maximum of 218 days and 13 hours per day, i.e., a total of 2,834 hours per year. For more information www.35h.travail.gouv.fr

For more information Act 2001-152 on employee savings schemes of February 19, 2001 and Decrees 2001-703 and 2001-704 Doing business in France - www.investinfrance.org

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Chapter 2. French labor law

é.2.Reductions in employers’ social security charges

Companies of all sizes and in all industries have been entitled to reductions in social security charges on low wages since 2003.

The reductions are calculated according to the hourly wage rate per employee and per month. They can represent up to 26% of gross wages for an employee earning the statutory minimum wage. For more information about calculating the reductions See the Labor Ministry web site. www.urssaf.fr

WORKING HOURS IN FRANCE

LEGAL PROVISION

STANDARD OVERTIME OPTIONS

Companies concerned

All companies

Small companies(1)

Working hours

35 per week or 1,607 per year

Limit set by collective bargaining agreement or statutory annual limit of 220 overtime hours or 39 hours per week over full year = 1827 hours/year

Maximum of 44 hours per week (over 12 weeks) unless there is an adjustment agreement

Administrative formalities

None

None: simply inform the Works Council and employment inspector.

Staff representative must be consulted. Approval of employee is required

Overtime pay rates (3)

Not applicable

Up to 31 December 2008: +10% from 36th to 39th hour worked +25% from 40th to 43rd hour worked +50% for each additional hour worked

Overtime rate set by collective bargaining agreement or industry agreement (minimum +10%) or, failing this, +25% from the 36th to the 43rd hour worked and +50% for each additional hour

None

50% for each hour after the 41st hour worked (=1/2 hour per overtime hour over 41 hours)

† †



Statutory extra time off

Large companies(2)

Not applicable

SPECIAL OVERTIME OPTIONS Small companies(1)

Large companies(2)

Same as standard overtime limit

50% after statutory work week (=1/2 hour per overtime hour over 36 hours)

100% after the statutory work week (= 1 hour per overtime hour over 36 hours)

(1) Small companies have up to 20 employees (2) Large companies have more than 20 employees. (3) If provided for in the collective bargaining agreement, time off in lieu of overtime pay is a possibility. When extra time off is required by law, time off in lieu of overtime pay must be added to it.

é.3.Paid vacations can be split up Employees in France are entitled to five weeks of paid vacation. The employer can refuse to let an employee take vacation time if the workload will not allow it. However, employers must let employees take at least four weeks of vacation between May 1 and October 31. In addition to paid vacation, there are 11 legal holidays and personal leave days (marriages, births, deaths).

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é.4.Sunday is a day of rest except by exemption

Employees must be given a weekly day of rest lasting at least 24 hours on Sunday. However, there are many exceptions to the Sunday rule. Permanent exemptions are granted when warranted by the nature of the company’s business (e.g., manufacturing firms using or producing perishable goods, factories operating around the clock, maintenance firms, etc.) The government may also grant temporary exemptions, for example when manufacturing firms are operating with extra shifts. AFII – © 2006

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Chapter 2. French labor law

Extra compensation is paid to employees who work on Sunday and they are still entitled to a weekly day of rest.

WORKING HOUR ARRANGEMENTS (cont’d)

é.5.Working hours can be averaged over a full

Principle

Companies have several ways of adjusting working hours to suit their business requirements without incurring extra payroll costs.

Example

year at no extra cost

é.5.1.Shift work and production cycle work do

Rotating shifts

Production cycle

Working days and days off divided among employees (1) Shift A: Monday to Friday Shift B: Tuesday to Saturday

Working hours are set over the cycle

not entail additional payroll costs

Shift working, with three eight-hour shifts per day, can be instituted by a company-wide agreement. The exemption from the Sunday rule may be automatic or may require administrative authorization, depending on the activities concerned. Production cycle work is used to manage variations in activity over short periods (8 to 12 weeks). Work may also be organized with rotating shifts or teams. In all of these cases, the company is not required to pay increased wages or overtime pay and it is not required to provide extra time off, as long as the statutory working hours are not exceeded on average over the cycle.

Average work week

35 hours

Weeks 1 and 2: 44 hrs Week 3: 38 hrs Weeks 4 and 6: 28 hrs (average over cycle: 35 hrs) average of 35 hours over cycle

(1)With special arrangements for working on Sunday.

è.Health and social security è.1.France’s health and social security system covers all employees

France’s health and social security system pays virtually all healthcare costs incurred by the employees and their families.

é.5.2.Working hours can be averaged over the

The system offers four types of benefits:

If the company’s business fluctuates in a predictable pattern over the year, working hours can be increased or cut back during certain periods without incurring extra costs, subject to statutory limits.

- Health coverage insurance (healthcare, maternity, disability and death benefits) - Old-age pensions - Family allowances - Workers’ compensation.

year without any increase in pay

WORKING HOUR ARRANGEMENTS Conventional shift work Principle Example

Average work week

Alternating shifts

Fixed round-theclock shifts (1)

Shifts are longer than normal working hours Shift A: 6 am - 2 pm Shift A: Shift B: 6-10 am/2-6 pm 2 pm - 10 pm Shift B: Shift C: 10 am-2 pm/ 10 pm - 6 am 6 pm-10 pm (3 eight-hour shifts) Or else Shift A: 6 am - 2 pm Shift B: 9 am - 5 pm Shift C: 12 pm - 6 pm All companies All companies

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The system is backed up by compulsory unemployment insurance and supplementary retirement schemes. Employers are free to add other insurance coverage to suit their employees. The health and retirement benefits for employees compare favorably with those offered in many other countries, and in the United States and the United Kingdom, in particular.

è.2.The employers’ payments discharge all of

their health, retirement and unemployment insurance obligations The employers’ and employees’ charges are collected by URSSAF. The employers’ share of charges represents at most 40% of gross wages and the employees’ share represents about 20%. Social security charges are substantially lower on low wages. There are also “subsidized” employment contracts for certain categories of jobseekers that entail lower rates.

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Chapter 3. Expatriate staff

Disclaimer: This document presents the basic rules applying to international companies that locate business activities in France. Intended as a practical review of the general situation, it presents key information about legal, tax and labor issues to facilitate companies’ decision-making. The information it contains is not comprehensive and IFA cannot be held liable for any omissions or errors. Investors should use the services of professional consultants to examine the circumstances of each case.

Doing business in France - www.investinfrance.org

AFII – © 2006

20

Chapter 3. Expatriate staff

Foreign companies often assign staff from other countries to their locations in France. The administrative formalities have been streamlined to make it easier for these expatriate employees and their families to enter the country, while tax and social measures have also been implemented to enable them to offset the cost of living abroad.

å.Two different sets of rules for secondment

ç.1.Rules for European Union citizens are

The legal situation of foreign employees differs according to the circumstances of their expatriation. Seconded employees work in France for a company located outside France. Transferred employees employed by a foreign-owned firm in France are subject to French labor law.

Citizens of the European Union, the European Economic Area and Switzerland are free to travel and work in France with no need for a visa, residence card, work permit or business permit.

or transfer of employees to france

å.1.Secondment is a temporary arrangement Secondment concerns foreign executives who work in a French company for a short period, generally lasting up to 18 months. They come to France on a specific assignment, such as technical assistance, financial control or liaising with the parent company, or to provide a service. Seconded employees remain employees of the foreign company. They are not under the orders of the host company in France and they answer to their superiors at the foreign company. While such employees are not subject to French law, they are still covered by French rules governing working hours and the minimum wage. Citizens of Member States of the European Union, the European Economic Area (EU, plus Iceland, Liechtenstein and Norway) and Switzerland are free to work in France without special authorization. On the other hand, employees from other countries must obtain several different documents to enter France, to work in France and to live in France. Seconded employees are registered with the Labor Inspectorate by their host company.

å.2.Transferring non-EU employees to France If foreign employees come to work for a company in France on a long-term basis, they become employees of the French entity and work under a French employment contract. Transferred employees may maintain a legal link to their home company to enable them to return to it once their stay in France is over.

flexible.

FORMALITIES FOR CITIZENS OF THE NEW MEMBER STATES OF THE EUROPEAN UNION During a transitional period, lasting up to seven years (see accession treaties), citizens of the new Member States of the EU must obtain a permit to stay in France more than three months (with the exception of citizens of Cyprus and Malta, who can travel and work in France immediately). An EU residence card good for up to one year is automatically issued upon presentation of an employer’s declaration certifying the term of employment. Residence cards for stays of more than 12 months are valid for 10 years. Applications for 10-year cards should be filed with the prefecture or municipality of the place of residence within three months of the employee’s arrival. There is no charge for this procedure. Applicants must prove their identity, their marital status, their residence in France and their professional activity (employer’s certificate or service certificate), and provide a medical certificate established by an approved doctor. Applicants are given a voucher that is valid for three months pending the issue of their EU residence card. Issuance of a residence card may only be refused on public order grounds. Citizens of eight of the new EU Member States must still obtain a work permit to work in a salaried capacity. However since May 1, 2006, existing unemployment levels can no longer be cited as a reason to refuse issuance of permits in the 7 sectors listed in the notice dated April 29, 2006. For more information EU directive no. 96-71 of December 16, 2996 on secondment of workers to supply services.

ç.Administrative formalities Formalities differ depending on the employees’ nationality and their status as seconded or transferred employees.

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Chapter 3. Expatriate staff

ç.2.Immigration procedure for non-EU employees

Non-EU employees transferred to France must obtain a long-stay visa, a work permit (‘introductory contract’) and a residence card marked ‘employee’. ACT OF JULY 24, 2006, NO. 2006-911 This Act governing immigration and integration of foreign workers was published in the Journal Officiel on July 25, 2006. It introduces a number of modifications in this area, notably concerning immigration of workers: - creation of a multi-year “seconded employee” status for intra-company transfers - creation of an “expertise and skills” card - authorization to recruit students at master’s level or higher in the six months following the end of his or her studies, regardless of the unemployment situation - elimination of the requirement for prior authorization to trade (formerly the carte de commerçant) for nonOECD managers. Since these measures were voted only recently, decrees for their application have not yet entered into force, which means the new law cannot be applied. In the meantime, the previous regulations applying to the immigration of workers remain in effect. For more information: Order 45-2658 of November 2, 1945 on conditions for the entry and stay of foreigners in France and the creation of the Office of Immigration Services (now ANAEM). See: Do I need a visa? and Immigration documents Ministry of labor website

ç.2.1.Streamlined procedure for issuing work permits and residence cards for senior executives

Under a special procedure coordinated by ANAEM, the national agency for immigration (formerly the Office of Immigration Services (OMI)) chief executives and senior executives can obtain visas, residence cards and work permits in a few weeks. This accelerated procedure is available for executives at French companies belonging to an international group who have worked for that group.

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Chief executives are defined as employees with the power to make decisions independently. They are free to organize their working schedule and they receive the highest levels of compensation paid by the company. Senior executives are paid more than €5,000 gross per month. The French employer files a transfer application with the relevant ANAEM regional representative for the host establishment’s location. The application is processed by the Directorate for labor and vocational training for the département (DDTEFP) within 10 days. Job market conditions have no bearing on its decision. The executive in question must apply for a long-stay visa (visa long séjour) and a residence card from the relevant French consulate. Once the consulate is notified of the DDTEFP’s approval, the executive can pick up the visa and enter France. The ANAEM will issue the work permit and residence card after a medical examination. For more information: Circular no. 2004-143 of March 26, 2004 on entry in France of senior executives and their families. INTRA-COMPANY TRANSFER APPLICATION The application is to be filed with the ANAEM. The application must be accompanied by documents in French that will include: - Company bylaws, K-bis and certificate attesting that it is up to date in its payments to URSSAF - An employment contract signed by the French employer and the foreign executive, and CERFA form no. 9661-02. - A promise to pay ANAEM a fee (€168, plus a contribution of €725 for each foreign employee hired at a gross monthly salary of less than €1,525 and a contribution of €1,444 for each employee hired at a higher monthly salary). - Photocopy of passport - Statement signed by company head certifying that the candidate has already been an employee of the group for at least six months - Photocopy of full birth certificate with certified translation - Four recent passport photos of the candidate - Two stamped envelopes for transmission of documents between relevant departments.

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ANAEM* REGIONAL DELEGATIONS, DECEMBER 2004

ß Délégation de Lille - Aisne, Nord, Oise, Pas-de-Calais, Somme 892, avenue de la République, 59700 Marcq-en-Baroeul Tel. 03 20 99 98 60 – Fax : 03 20 99 98 61 For senior executives arriving in France: [email protected]

ß Délégation de Lyon - Ain, Allier, Ardèche, Cantal, Côte-d’Or, Drô-

me, Jura, Loire, Haute-Loire, Nièvre, Puy-de-Dôme, Rhône, Saôneet-Loire, Savoie, Haute-Savoie, Yonne 7, rue Quivogne, 69286 Lyon cedex 02 Tel. : 04 72 77 15 40 – Fax : 04 72 77 15 59 For senior executives arriving in France: gisè[email protected]

ß Délégation de Grenoble - Isère

ß Délégation de Paris-Centre -Paris

48, rue de la Roquette, 75011 Paris Tel. : 01 55 28 19 40 – Fax : 01 55 28 19 75 For senior executives arriving in France: [email protected]

ß Délégation de Paris Nord - Calvados, Eure, Manche, Orne, Paris, Seine-Maritime, Seine-Saint-Denis, Val-d’Oise 53/55, rue Hoche, 93177 Bagnolet Tel. :01 49 72 54 00 – Fax : 01 49 72 54 22 For senior executives arriving in France: [email protected]

ß Délégation de Paris Sud - Maine-et-Loire, Mayenne, Sarthe, Seine-

76, rue des Alliés, 38000 Grenoble Tel. : 04 76 40 95 45 – Fax : 04 76 40 59 89 For senior executives arriving in France: [email protected]

et-Marne, Yvelines, Val-de-Marne, Vendée, Vienne, Hauts-de-Seine 221, avenue Pierre Brossolette, 92120 Montrouge Tel. : 01 41 17 73 00 – Fax : 01 41 17 73 33 For senior executives arriving in France: [email protected]

ß Délégation de Marseille - Alpes-de-Haute-Provence, Hautes-Al-

ß Délégation de Rennes – Côte d’Armor, Finistère, Ille-et-Vilaine,

pes, Aude, Bouches-du-Rhône, Corsica, Corse-du-Sud, Haute-Corse, Gard, Lozère, Pyrénées-Orientales, Var, Vaucluse, Réunion 61, boulevard Rabatau, 13295 Marseille cedex 08 Tel. : 04 91 32 53 74 – Fax : 04 91 32 53 61 For senior executives arriving in France: [email protected]

ß Délégation de Metz – Meurthe-et-Moselle, Meuse, Moselle 2, rue Lafayette, 57000 Metz [email protected] 03 87 66 00 52

ß Délégation de Montpellier - Hérault

4 rue Jules Ferry, 34000 Montpellier Tel. : 04 99 77 25 50 – Fax : 04 99 77 25 51 For senior executives arriving in France: [email protected]

ß Délégation de Nantes - Loire-Atlantique 9, rue Bergère, 44000 Nantes Tel. : 02 51 72 79 39 – Fax : 02 51 72 79 48 For senior executives arriving in France: [email protected]

ß Délégation de Nice - Alpes-Maritimes

208, route de Grenoble, 06200 Nice Ouest Tel. : 04 92 29 49 00 – Fax : 04 92 29 49 01 For senior executives arriving in France: [email protected]

Morbihan 1, place Hoche, 35000 Rennes [email protected] 02 99 22 98 65

ß Délégation de Strasbourg - Ardennes, Aube, Doubs, Marne, Haute-Marne, Bas-Rhin, Haut-Rhin, Haute-Saône, Vosges, Territoire de Belfort 4, rue Gustave Doré, 67000 Strasbourg Tel. : 03 88 23 30 20 – Fax : 03 88 23 30 13 For senior executives arriving in France: [email protected]

ß Délégation de Toulouse - Ariège, Aveyron, Charente, Charente-Maritime, Corrèze, Creuse, Dordogne, Haute-Garonne, Gers, Gironde, Landes, Lot, Lot-et-Garonne, Pyrénées-Atlantique, Hautes-Pyrénées, Deux-Sèvres, Tarn, Tarn-et-Garonne, Haute Vienne 19, chemin Lapujade, 31200 Toulouse Tel. : 05 34 25 42 42 – Fax : 05 61 58 48 08 For senior executives arriving in France: [email protected]

ß Délégation de Cayenne - Guadeloupe, Martinique, French Guyana 17/19, Rue Lalouette – BP 245, 97325 Cayenne Cedex Tel. : 05 94 37 87 00 – Fax : 05 94 30 64 52 For senior executives arriving in France: [email protected]

ß Délégation d’Orléans - Cher, Indre, Indre-et-Loire, Loiret, Loir-etCher 43, avenue de Paris, 45000 Orléans [email protected] 02 38 52 34 01

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* formerly OMI

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ç.2.2.Procedure for other executives

SECONDMENT APPLICATION

The DDTEFP will issue work permits for junior executives with no power to determine corporate policy and earning less than €5,000 per month, if job market conditions permit.

employees

The host company files the application with the local DDTEFP. The application includes in particular: - A secondment certificate from the foreign company: three copies of the certificate stipulating the foreigner’s qualifications, the term and purpose of the secondment, the salary paid, the job occupied and the start date - A certificate from the host company: three copies of the certificate mentioning the application for a work permit, the purpose and term of the secondment and a commitment that the seconded employee will not be under the orders of the host company. - A promise to pay a €168 fee to the ANAEM if the secondment lasts more than three months. - A questionnaire about the employee in question. - A promise from the seconded employee to leave France after the secondment is over - Three passport photos.

Seconded employees who are not EU citizens must obtain a temporary work permit (APT), which is good for up to nine months and can be renewed.

For more information: Decree 91-995 of September 24, 1991. see les autorisations de travail

The host company must file a request for the work permit with the relevant national employment agency, which advertises the vacancy for 15 days. If the vacancy is not filled, the local labor inspectorate then has three months to make its decision known. If it approves the work permit, the French consulate in the junior executive’s country can issue a long-stay visa. After a medical examination at the ANAEM, the executive can pick up the residence card marked “employee” from the prefecture for his place of residence.

ç.2.3.Accelerated procedure for seconded

At the same time as the employee applies to the consulate for a long-stay visa, the French host company should file an application for a temporary work permit with the DDTEFP with jurisdiction over the foreign employee’s place of work. After approving the application, the DDTEFP passes it on to the ANAEM, which notifies the consulate. Upon arrival in France, the employee needs to pass a medical examination at the ANAEM, after which he can pick up his temporary work permit and residence card. The holder of a temporary work permit is not allowed to change employers in France. If the secondment is for fewer than three months, the ANAEM is not involved in the procedure. The host company merely declares the seconded employee to the labor inspectorate. Depending on the seconded employee’s nationality, a short-stay visa may be required for entry into France.

ç.3.Some non-EU and non-OECD citizens

with the power of signature for the company in France must obtain a business permit Citizens of EU and OECD member countries, countries in the European Economic Area and Switzerland, as well as holders of a resident card (which can be obtained after five years of uninterrupted residence in France and is good for 10 years) are not required to obtain prior authorization to conduct business activities. Citizens of OECD countries must apply for a special long-term business visa and a resident card. Only non-OECD citizens (from China, Taiwan, etc.) who have the power of signature for the company or the authority to manage an establishment of the company (corporate officers, managers, partners, directors, etc.) or conduct business transactions must obtain a business permit, which is issued by the prefect with jurisdiction for the company’s location in France. Business permit holders wishing to live in France also need to apply for a long-stay visa and a temporary residence card.

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ACT No. 2006-911 OF JULY 24, 2006 The Act on Immigration and Integration did away with the requirement for prior authorization to conduct business activities (carte de commerçant) for managers who are non-OECD citizens. All managers of companies from outside the European Economic Area must comply with one of the following formalities: - For managers from outside the European Economic Area planning to reside in France (decree of Conseil d’Etat forthcoming): (1) obtain a long-term visa to conduct industrial and commercial activities and (2) obtain corresponding resident permit - For managers from outside the European Economic Area not planning to reside in France (decree forthcoming): prior declaration of business activity to the Prefecture. For more information Article L122-1s, Code of Commerce. Decree of January 28, 1998 on identity cards for foreign businesspeople.

é.Choice of health coverage and social secu-

European Union citizens can opt to stay with the health and social security system of their home country for a renewable 12-month period. After that, they must register with the health and social security system of the country where they work. Citizens of countries with reciprocal agreements with France can remain with their home country’s system for up to 6 years. At the end of this period, the employees either register the system of the country where they work exclusively, or they maintain their link to their home country system and register with the French system too. The formalities for exercising this option must be completed with the relevant health and social security agencies in the employees’ home countries, before being hired in France. European Union citizens need to obtain E101 forms (continuing coverage for expatriates) or E102 forms (extension of E101) and an E111 form (healthcare entitlement certificate). Citizens of countries that have reciprocal agreements with France must provide proof of coverage in their home country. For more information French center for European and International Social Security Relations (CLEISS): www.cleiss.fr

rity system

è.Tax rules for expatriates

Seconded employees may opt for continued coverage by the health and social security system in their home country. Transferred employees only have this option if it is provided for under a reciprocal agreement with France.

In principle, France’s tax treatment of foreign workers is the same as for French workers, but foreigners enjoy a few special expatriation benefits.

é.1.In principle, the French health coverage

Income of all types and from all sources accruing to a person residing in France is taxable in France, as is income from French sources accruing to non-residents. Fiscal domiciliation in France is possible if one of the following criteria is met: - Permanent place of residence of the taxpayers and their families (183 days per year) - Center of economic interests in cases where two residences are maintained - Usual place of residence if the center of economic interests cannot be determined - Citizenship, if no other criterion is applicable - Failing that, the matter is decided by mutual agreement between the French government and the government of the taxpayer’s home country.

and social security system applies.

The French health coverage and social security system is based on the territorial principle. This means that employees working in France are, in principle, subject to French legislation on health coverage and social security, regardless of their citizenship and the location of their employer. However, foreign employees may contribute to optional protection plans in their home countries.

é.2.But international agreements and EU regulations provide for exemptions from French health coverage and social security charges

This option is only available to citizens of EU and European Economic Area countries or other countries that have reciprocal social security agreements with France (including Canada and the United States, see international agreements).

Doing business in France - www.investinfrance.org

è.1.Tax liabilities of expatriates

This rule usually applies subject to the provisions of France’s reciprocal agreements with other countries. Each case needs to be considered with regard to the relevant agreement.

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è.1.1.Wage income

è.2.2.Tax relief for expatriates

Tax is levied on wage income, after deducting social security charges and other compulsory levies, and with a 10% deduction for professional expenses.

Expatriates have several options for reducing their personal taxes:

è.1.2.Personal income tax for residents is

signs to jobs in companies located in France are not required to pay income tax on their expatriation bonus in their first year in France or for the next five years. This exemption is restricted to persons who have not been residents of France for tax purposes in the 5 years leading up to their stay. ß No French tax is due on bonuses or reimbursed expenses for work done outside of France under a “temporary assignment” clause in the employment contract, split salaries, expatriation bonuses, etc. ß Charges paid by expatriate employees and their foreign employers for supplementary health and retirement plans may be deducted from their taxable income in France. This deduction is restricted to persons who have not been residents of France for tax purposes in the five years prior to their arrival. ß Payments made by the expatriate to the social security system in his or her home countries are deducted from taxable income in France when there is an agreement between France and the home country in this area.

progressive and takes account of the number of dependents

French residents’ income is taxed at progressively higher rates. The tax rates are imposed by tranche — 0%, 5.5%,14%, 30%, 40% — according to the income bracket. Tax is based on total household income, which includes the income of the spouse and children aged under 18 years. The tax rate is proportional to the size of the household: the more people there are in the household, the lower the tax rate is.

è.1.3.Tax on income paid in France to nonresidents is generally very favorable

Income from French sources earned by employees who work in France but do not have their tax residence in France is generally subject to a withholding tax. However, non-resident employees are still required to file an income tax return with the French tax authorities and, if necessary, pay any difference between the amount withheld and the tax due. Payment of the withholding tax in France generally gives rise to an equivalent tax credit in the country of residence to prevent double taxation. The specific procedures depend on the tax treaty between France and the country of residence. For more information Tax office for non-residents 10 rue du Centre 93465 Noisy-le-Grand cedex Tel. +33 1 57 33 88 88

è.2.Optimizing expatriates’ tax and social security situation

The tax and social security situation of expatriates needs to be considered with care before they arrive in France. When drawing up employment contracts, the arrival and departure dates and the compensation package all require careful attention.

è.2.1.Resident or non-resident? Expatriates may remain non-residents of France for tax purposes, in which case they pay French tax only on their income from French sources; or they may become French residents and pay French tax on their worldwide income. Their tax residence status depends on the length of their stay, on whether they work in France only or in several countries, and on whether their family lives with them in France.

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ß Employees and directors that a foreign company as-

ê.Expatriates’ families France has introduced a joint procedure for issuing administrative documents to expatriate executives and their families.

ê.1.Simplified visa procedure for expatriates’ families

Simultaneous applications for visas and residence cards may be filed at the French consulate in the home country to ensure that expatriate executives can enter France at the same time as their spouses and children. The ANAEM handles the procedures for expatriates’ families and issues temporary residence cards marked “visitor” after a medical examination. The residence cards are issued for the same period for all family members. Family members accompanying expatriate executives must apply for entry visas at the same time as the executive even if the family does not plan to arrive in France for up to 10 months after the date of the visa on the employment contract. For more information: Circular no. 133 of March 15, 2006.

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ê.2.Permission for expatriates’ spouses to work

Foreign spouses of corporate officers and senior executives are automatically issued work permits by the DDTEFP, regardless of the situation on the job market. To be eligible for a work permit, the spouse must have entered France lawfully and have a commitment from an employer for an open-ended employment contract drawn up under French law and stipulating a gross monthly salary of more than €2,000. AUTOMATIC ISSUE OF WORK PERMITS FOR EXPATRIATES’ SPOUSES Spouses applying for a work permit must provide the local prefecture with three copies of their employment contract, the employer’s commitment to pay the fee due to the ANAEM and documentary proof that their spouse’s situation makes them eligible for the automatic procedure. The prefecture staff will immediately send the application to the DDTEFTP for consideration. After it is approved, the spouse will be issued a temporary residence card marked “employee”. If the employment contract is temporary, the spouse will receive a temporary residence card marked “temporary worker” and a temporary work permit. The same requirements apply for renewing the work permit and the related residence card. For more information Circular no.212 of May 7, 2004

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ACT NO. 2006-911 OF 24 JULY 2006 The Act governing immigration and integration introduced a resident card especially for “seconded employees”. Legislation provides issuance of a “Personal and family life” card for the family of a seconded employee who will be staying more than six months in France.

ê.3.Schools Children may be enrolled in state schools at any time of the year. Parents may also choose to pay for their children to attend a private school. In elementary schools, children are either placed in ordinary classes or in introductory French classes for a few months, depending on their French language skills. In intermediate schools and high schools, children are either placed in ordinary classes with the option of extra help for French or in introductory classes for nonFrench-speaking pupils. There are also many schools offering international classes in all grades. Pupils in these programs take some of their classes in French and follow the French curriculum, with the rest of their classes taught by qualified teachers from the country concerned, in that country’s language and following that country’s curriculum. This program prepares pupils for a French Baccalaureate called Option Internationale du Baccalauréat (OIB), which is accepted by the universities of the other countries in the program. For more information See map of schools offering international classes: www.afii.fr List of universities and institutes of higher education. Foreign diplomas recognized in France

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Disclaimer: This document presents the basic rules applying to international companies that locate business activities in France. Intended as a practical review of the general situation, it presents key information about legal, tax and labor issues to facilitate companies’ decision-making. The information it contains is not comprehensive and IFA cannot be held liable for any omissions or errors. Investors should use the services of professional consultants to examine the circumstances of each case.

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Chapter 4. Taxation

France’s corporate tax system is designed to promote business investment, regional development and international expansion. Tax rules for groups also testify to France’s commitment to equal tax treatment. France has signed tax treaties with more than one hundred countries and provides foreign investors with outstanding protection against double taxation.

å.Corporate income tax

å.2.2.Intercompany transfers

å.1.Taxation of foreign companies in France

Management expenses, interest charges and royalties paid to associated companies are deductible if they correspond to actual services rendered and the amounts invoiced are in line with market prices.

Any foreign company doing business for profit in France is liable for French tax on its earnings in France. This rule applies to all types of entities:

ßSubsidiaries ß Branches ß Permanent establishments If a branch or a permanent establishment is not a separate legal entity producing its own financial statements, then its earnings from activities in France are reconstituted using the financial statements of the foreign company. Each individual tax treaty defines the notion of permanent establishment. For more information: Access bilateral tax treaties at www.impots.gouv.fr/portal/dgi/public/professionnels.

å.2. Calculating taxable income Taxable corporate income is calculated by deducting eligible expenses from revenue. Revenue comprises all of the proceeds from activities, sales or provision of services. Deductible expenses are those related to the company’s business. They include:

ß Depreciation and amortization (excluding goodwill) ß Provisions ß Rent for buildings and equipment ß Wages ß Social security charges ß Goods purchased ß Energy consumption ß Advertising ß Financial expenses, etc. å.2.1.Deduction limits There are limits on some deductions to prevent abuse. For example, the depreciation allowance and deductible lease payments on company cars are capped at €18,300 including VAT (€900 for the least environmentally friendly cars) to prevent sumptuary expenditures from being written off as business expenses.

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å.3.Depreciation France’s depreciation rules are particularly favorable. Fixed assets are depreciated according to the straightline method over their likely useful life. In the case of production assets bought new, acceleration multiples ranging from 1.25 to 2.25 may be applied to the straight-line depreciation rates, depending on the normal useful life of the assets concerned. Equipment and tools used for scientific and technical research and purchased or produced after January 1, 2004 can be depreciated using an accelerated diminishing balance method. The acceleration multiples in this case range from 1.5 to 2.5. Software, energy conservation equipment, renewable energy production equipment, noise abatement equipment and non-polluting vehicles (running on electricity, natural gas or LPG) can be depreciated over 12 months.

å.4.Provisions Provisions for impairment of assets are allowed if they can be justified and if they relate to clearly identified claims, inventories, securities or tangible assets. Allowable provisions include provisions for risks, for work in progress, for price increases, for vacation pay, etc.

å.5.Corporate income tax rates Excluding temporary additional taxes, the following tax rates are applied:

ß Standard rate of 33.33% ß Small businesses1 pay a 15% tax on the first €38,112

in profits and the standard tax rate on remaining profits. ß Reduced rate of 15% on proceeds of industrial operations (royalties and capital gains on asset sales). ß Capital gains on the sale of shareholdings during the fiscal year beginning in 2006 will be taxed at 8% and exempt from 2007 except for a percentage corresponding to expense. An additional social security levy of 3.3% is applied to companies where the income taxed at the standard

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rate is greater than €2,289,000. The additional levy is 3.3% of the reference corporate income tax payment, after subtracting €763,000. 1 Companies in which at least 75% of the equity is owned directly or indirectly by individuals or by companies that meet the same conditions and report annual sales of less than €7,630,000

å.6.Carrying losses forward Losses can be carried forward indefinitely. There is also an arrangement for deducting the current year’s losses from income in previous years (carryback). CARRYBACK RULES The carryback system makes it possible to deduct the current year’s loss from income in the three previous years. This results in a claim on the Treasury for previously paid taxes. The Treasury reimburses the claim after five years, unless the company concerned applies it against corporate income tax owed. The claim can also be discounted by credit institutions (Dailly Act). Example: 2002 = taxable income +€50,000 2003 = taxable income +€10,000 2004 = taxable income +€30,000 2005 = loss -€70,000 €50,000 of the 2005 loss is deducted from 2002 income €10,000 is deducted from 2003 income €10,000 is deducted from 2004 income The claim on the Treasury is calculated as: €70,000 x 33.33% = €23,331 (additional levies are not counted). Use of the claim: If the company reports income of €100,000 in 2006, it will owe €33,333 in tax. It could apply the claim against its 2006 tax bill. If it continues to show losses in 2006, 2007, 2008, 2009 and 2010, it can apply for a refund of €23,331 in 2011. Carryback periods in Europe: Germany, Ireland, United Kingdom: 1 year Netherlands: 3 years

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å.7.Groups of companies France’s tax consolidation rules are particularly favorable. They offer the advantages of a comprehensive system that enables groups of companies to offset income and losses from their consolidated French businesses and eliminates intercompany transactions. This option is available if the French subsidiaries in the consolidated group are at least 95% owned by a French parent company. The accounting years of the parent company and its subsidiaries must coincide. Groups may choose this option for a five-year period and announce their choice until the date they file tax returns for the year preceding that to which it applies.

ç.Repatriation of profits

  Profits are usually repatriated in three forms:

ß Transfers or distributions of net profit from branches and subsidiaries ß Interest on loans and advances from the foreign parent company ß Royalties or management fees.

ç.1.No tax obstacles to invoicing interest, royalties or management fees

The amounts invoiced must be justified and in line with the prices for arms length transactions between independent companies. The French authorities are entitled to require proof that transfer prices are in line with true market prices.

ç.2.Withholding tax If the parent company is located in a country that does not have a tax treaty with France, the withholding tax rates are as follows:

ß 25% on dividends, branch profits and royalties ß 15% on interest payments Tax treaties between France and many countries significantly reduce withholding tax rates. For example, there is no withholding tax on dividends or branch income paid to European parent companies or to the head office of European companies. Another example is the tax treaty between France and the United States, which sets the withholding tax rate on dividends, branch profits and management fees at 5%. The withholding tax rate rises to 15% for dividends paid to individuals who are residents in the United States and own fewer than 10% of the shares in the French company in question.

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ç.3.Generous exemptions for dividends paid through holding companies

When holding companies located in France and owning equity in French and foreign companies redistribute dividends from companies in which they own more than 5% of the equity to their foreign shareholders:

ß There is no tax if the holding company’s parent com-

pany is located in a Member State of the European Union ß If the parent company is not located in the European Union, the only tax liability is the withholding tax at the rate determined by the relevant tax treaty. However, holding companies that are more than twothirds foreign owned enjoy special exemptions and deductions that are not available to holding companies under French ownership.

é.VAT and customs duty The value added tax (VAT) is a tax that consumers pay on the consumption of goods and services. For companies subject to this tax, it is a neutral tax. They merely collect the VAT on their sales and deduct the amount of VAT that they have paid on purchases of goods and services. If companies have paid more VAT than they have collected, the difference will be refunded to them on request. Exports of goods outside the European Community are completely exempt from VAT.

é.1.Value added tax rates France’s standard VAT rate on sales of goods and services is 19.6%, but there are also reduced rates. The rate on food products and certain agricultural products is 5.5%. The rate on drugs is 5.5% or 2.1 %. The 5.5% rate also applies to books, hotels, public transit, newspapers and magazines, certain leisure activities, etc.

é.2.Customs duties are the same throughout the European Union

Goods move freely inside the European Union and customs duties are only charged once on non-EU imports, even if they are sent from one Member State to another after import. Goods entering France for reexport to another Member State of the European Union may enter France with no VAT charge (VAT is paid in the country where the goods are consumed).

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A transit arrangement suspends VAT payment for transactions involving goods that will be placed under the Community system of customs duty relief or in a bonded warehouse. The purpose of this arrangement is to delay payment of VAT until a later stage. Application of computerized transit system. Companies are not required to complete any administrative formalities for the movement of most merchandise between the countries in the European Community. They must merely file an exchange of goods declaration (Intrastat) on intra-community trade for statistical purposes. Any company that receives merchandise worth more than €150,000 per year from another Member State or exports the same amount to other Member States must file an Intrastat form each month. The form provides information about types of products, countries of origin and destination, values and weights. The customs administration has designed computerized clearance systems that accelerate clearance formalities and release of goods. Companies may opt for electronic transmission of the forms to the customs data center (CISD) and on-line filing of Intrastat forms. Clearance is carried out by the relevant customs service: see the list of addresses. CLEARANCE GOODS

OF

NON—EUROPEAN

UNION

Imports and exports of merchandise between Member States of the European Union and other countries require a customs declaration, which must be filed using the Single Administrative Document (SAD). The main data included in the SAD are: the name of the company, the type of declaration (import or export), the type of goods, origin and ex-tax value of the merchandise. Invoices and any documents required to claim preferential tariff treatment or for inspection of certain imports (agricultural products, etc.) must be included in the declaration. The SAD data are used to calculate the duties and taxes due and for the physical and statistical accounting of the merchandise. For more information: Regulation 2913/92/EC of October 12, 1992, OJEC L 302 of October 19, 1992. Regulation 2454/93/EC of July 2, OJEC L 253 of October 11, 1993. For more information: French customs: www.douane.gouv.fr and www.minefi.gouv.fr/formulaires/douanes

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è.Local taxes è.1.1.Business tax Business tax is levied on behalf of local communities and calculated each year according to the locations of the company’s premises. The tax base is currently calculated on the following values:

The credit is equal to 10% of the expenditures in the year, plus 40% of the rise in average R&D expenditures over the two previous years. The tax credit amount is capped at €10 million per company and per year. Eligible research spending includes:

ß Staff costs (gross wages and social contributions) for

The amount of the business tax may not exceed 3.5% of added value produced by the company. New production equipment purchased by the company is not taxed the year of acquisition. Such equipment is taxed at 1/3 its value in the second year, then 2/3 in the third year following its registration on company books.

researchers and research technicians working directly and exclusively on research ß 200% of staff costs relating to employees holding doctorates for their first 12 months on the payroll (first job) ß Depreciation allowances for plant and equipment used directly for research operations ß An allowance for overhead expenses set at: - 75% of eligible staff costs - 200% of staff costs relating to young doctors ß Patent filing and maintenance costs ß Amortization allowance for patents acquired for research purposes ß 50% of standardization costs ß Spending on research operations contracted out to approved organizations in France and Europe. A cap of €10 million is set on these outlays per company and per year (€2 million for associated companies)

è.2.Other local taxes

ß Spending on patent defense and technology watch:

ß The rental value of the premises used by the company for its business ß 16% of the value of the fixed assets that the company uses for its business.

Tax is then levied on 84% of the sum of these two values at a rate that local communities set each year. No tax is due the year the business is set up. In the second year, tax is levied on only half of the normally taxable amount.

Other local taxes include the property tax that owners pay on buildings and land, and the housing tax that owners or tenants occupying residential property pay. These taxes are based on the rental value of the properties, which is assessed by the authorities.

ê.Tax incentives for investors ê.1.Tax credit ê.1.1.R&D tax credit Manufacturing, trading and agricultural companies that spend money on research can obtain a tax credit. This credit can then be applied against their corporate income tax. If they do not owe any tax, they receive a cash reimbursement of their R&D tax credit after three years. Eligible research expenditures include spending on basic research, applied research and experimental development.

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the cap on eligible spending in each of these categories is now €120,000. ß Funding provided to public research bodies, universities and technical centers, which counts double towards the tax credit.

ê.1.2.Family tax Companies can obtain a tax credit equal to 25% of their spending to enable employees with children to achieve a better balance between their working life and their family life. The eligible spending includes funds for day-care centers, training for employees on parental leave, compensation for employees on maternity, paternity or parental leave, etc. The tax credit is capped at €500,000 per company and per year. It can be applied against the company’s corporate income tax for the year in which the spending was incurred. If the tax credit is greater than the tax due for the year in question, the difference is reimbursed.

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ê.1.3.Cinema, television and media tax credit Cinema, television and related media companies that pay corporate income tax can obtain a tax credit for certain production expenditures specified by law. The tax credit is available to companies that act as assistant producers and for operations carried out in France in the production of feature-length films. The cinema tax credit is calculated for each financial year and is equal to 20% of the eligible expenditures. The total tax credits for a single film are capped at €1,000,000 for a fiction, documentary or animated feature. For fiction produced for television or cinema, the tax credit may not exceed €1,150 per minute; this rises to €1,200 per minute for animated features. The tax credit can be applied against the company’s corporate income tax for the year in which the spending was incurred. If the tax credit is greater than the tax due for the year in question, the difference is reimbursed.

ê.1.4.Tax credit for investment in new technologies

Reserved to small and medium-size companies, this is equal to 20% of investment in new technologies, with a €100,000 cap per 36-month period.

ê.2.Temporary business tax exemption Other measures are aimed at helping businesses invest in troubled regions. In these areas, local communities (municipalities, départements, regions and intermunicipal authorities) have the right to grant temporary business tax exemptions to companies that set up or expand their business or take over troubled establishments. The exemption may be total or partial and it is limited to 5 years in all cases, but shorter exemptions may be granted as well.

ê.3.Temporary corporate income tax exemption

ê.3.1.New companies Newly created companies located in certain areas may be eligible for a temporary and diminishing corporate income tax exemption. The exemption is total for the first 24 months. After that, tax is levied on one quarter of income in the next twelve-month period, one half of income in the following period and three quarters of income in the period after that. The tax-exempt income is limited to €225,000 in any 36-month period. This measure is restricted to companies engaging in new business and which are not more than 50% owned by other companies.

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The eligible companies may also be exempt from business tax and property tax for two years, if the local community has decided to take such a measure. Companies set up to take over a company in difficulty may also, in specific conditions, be exempt from corporate income tax for the 24 months following the takeover.

ê.3.2.Innovative new companies (JEI) This exemption is aimed at helping new companies where research spending accounts for at least 15% of total expenses. It provides for a partial exemption from corporate income tax, business tax and property tax over eight years up to a limit of €100,000 in any 36-month period. The wages of such companies’ research staff are exempt from the employers’ social security charges for eight years. This measure is for small and medium-sized enterprises (fewer than 250 employees, sales of less than €40 million and total assets of less than €27 million) that are mainly owned by individuals or by companies that meet the same criteria. Sales of shares in such companies are exempt from capital gains tax if the seller has held the shares for three or more years.

ê.3.3.“One-man” venture capital company (SUIR)

This entity is a special legal structure owned by a single individual. It provides tax benefits that are commensurate with the high risk of investing in new companies. Such companies must be founded for the sole purpose of buying founders’ shares for cash or contributing to capital increases in unlisted manufacturing, trading and craft companies located in the European Community that are liable for corporate income tax. Investments must be in “new” companies that are majority owned by individuals or by other companies that are themselves majority owned by individuals. The one-man venture capital company can own up to 30% of voting rights in these companies. The tax benefits come in the form of two exemptions:

ß A corporate income tax exemption for the first ten

years of the venture capital company’s existence ß The original shareholder is exempt from personal income tax on income distributed by the venture capital company, including capital gains on the disposal of shares in target companies.

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Chapter 4. Taxation

ë.Special rules for headquarters and logistics centers

Like other European countries, France has special tax rules for company headquarters, logistics centers, and centers coordinating R&D. Headquarters, research and logistics centers each have their specific purpose and provide specialized services. Headquarters provide management, administration, coordination and control functions, while logistics centers handle only packaging, labeling and distribution functions. To be eligible for the special rules, the services must be provided to companies in the same group only. The tax rules are based on a fixed cost-plus formula that is arrived at in agreement with the tax authorities. This agreement on the formula eliminates the risk of a change in the cost-plus rate applied during a subsequent tax audit. Tax is assessed at the standard rate on income that is derived by applying the agreed cost-plus formula to expenditures incurred by headquarters, logistics centers or R&D coordination centers. The cost-plus rate applied is usually between 6% and 10%. As part of the tax rules aimed at eliminating expatriation costs, headquarters and logistics centers may pay special compensation to their expatriate employees that is totally or partially exempt from personal income tax. Companies must apply to the tax authorities to benefit from these measures, which may not be cumulated with new system for impatriate salaried workers: potential beneficiaries must opt for one or the other. For more information: The tax office that manages such applications is: Direction des Grandes Entreprises Division IV - Service Juridique 8 rue Courtois, 93505 Pantin cedex

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Chapter 5. Financial assistance to companies

Disclaimer: This document presents the basic rules applying to international companies that locate business activities in France. Intended as a practical review of the general situation, it presents key information about legal, tax and labor issues to facilitate companies’ decision-making. The information it contains is not comprehensive and IFA cannot be held liable for any omissions or errors. Investors should use the services of professional consultants to examine the circumstances of each case.

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Chapter 5. Financial assistance to companies

A wide range of assistance is available to companies in France for many types of projects. The type of assistance on offer varies according to the project characteristics (production capacity, job creation, innovation, training, etc.), locations (priority development areas, etc.) and type of company involved (large corporations, small and medium-sized enterprises, etc.) The IFA brochure on “Public support for companies in France” outlines the main support measures. The Invest in France Agency network will help you draw up a detailed list of government financial assistance available for your project and then assist you with preparing applications for support. All of the assistance available in France is subject to European Union Regulations on maximum levels, eligible expenditures and aggregate assistance limits. These European Union rules apply in all Member States without exception and in the countries applying for accession to the EU.

å.Investment and job-creation assistance Several forms of financial support are available to encourage companies to invest, create jobs and train their employees. Support is available in the form of subsidies, soft loans, tax credits, discounts, etc. from the central government and local communities (regions, départements, municipalities and intermunicipal structures). In accordance with European law, investment and job creation assistance for large corporations is legal as long as it promotes the location and development of companies in priority development areas (so-called PAT areas), where more assistance programs are offered and allowable assistance rates are more attractive. PAT areas in France (2000-2006)

The maximum investment assistance for production capacity and job creation is determined by the project location and the size of the company:

ß In PAT areas, the assistance covers 11.5% to 23% of

the amount invested in land, plant and equipment for large corporations, and 21.5% to 33% for small and medium-sized enterprises.

ß In the rest of the country, only small and medium-

sized enterprises can benefit from investment and jobcreation assistance. The maximum amount is 7.5% of the investment for medium-sized enterprises (50 to 249 employees) and 15% for small enterprises (less than 50 employees). The maximum rates apply to aggregate assistance from all sources. The main assistance packages available are:

ß The Prime d’Aménagement du Territoire or PAT, a

development grant managed by DIACT ß Investment and job creation assistance from local communities ß European Regional Development Fund (ERDF) in Objective 1 and 2 areas ß The small and medium-sized enterprise development fund.

NB: Queries for individual municipalities can be made at www.diact. gouv.fr

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Companies can also obtain subsidies and exemptions from social security charges by hiring certain categories of workers, such as young jobseekers or the long-term unemployed. Furthermore, the creation of new companies or the transfer of existing companies to designated urban free zones (44 existing zones and 41 new zones) gives rise to a full range of tax and social security exemptions for five years.

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Chapter 5. Financial assistance to companies

ç.Employee training assistance

é.Research and development assistance

Upgrading workforce skills is a priority for France, and several measures provide financial support for company training programs. These measures can cover part of the training costs or part of the compensation of employees taking training courses.

Government agencies, such as the Ministry of Industry, the Ministry of Research or the Innovation Agency (Oséo), have funds for financing corporate R&D projects in France. This assistance can be used to cover companies’ research costs, including staff costs, R&D equipment and overheads.

Main programs of this type are managed by the Ministry of Social Affairs and the regions. Local employment agencies can provide help for major investors with the selection of applicants, skills training and co-financing of on-the-job training. In areas undergoing industrial restructuring, group training programs are eligible for co-financing from the European Social Fund.

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Research spending may also entitle a company to an R&D tax credit of up to €10 million per company and per year. In addition, innovative new companies enjoy special advantages to promote their development in France, such as tax relief, exemptions from social security charges and exemptions from capital gains tax on sales of shares.

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Chapter 5. Financial assistance to companies

è.Competitiveness clusters

Future world-scale projects:

Industrial clusters

- Image, Multimedia and Life (Paris region) — multimedia - Industries and agricultural resources (ChampagneArdennes, Picardy) — non-agricultural use of farm products - Sea-nergie (Brittany) — oceanography, shipbuilding, fisheries - Innovation in healthcare (Alsace) — molecular therapeutics, non-invasive surgery - Images & networks (Brittany) — electronics and healthcare - Sea, Safety and Security (Provence, Alpes, Côte d’Azur — oceanography, shipbuilding - i-Trans (Northern France, Picardy) — rail industries - Chemicals & the Environment Lyon — (Rhône-Alpes) - Plant breeding (Pays de Loire) — seeds, horticulture, tree sciences

On July 12, 2005, the Inter-Ministerial Committee on Regional Development (CIADT) announced the creation of 67 industrial clusters. Of these, 6 are classified as “world-scale projects” and 9 as “future world-scale projects”.

World-scale projects: - Communication and Security (Provence-Alpes-Côted’Azur) — software for telecommunications - LYONBIOPOLE (Rhône-Alpes) — virology - [email protected] Paris Region (Ile-de-France) — software for complex systems - MINALOGIC (Rhône-Alpes) — nanotechnology - Aeronautics, Aerospace, Embedded systems (MidiPyrénées- Aquitaine) - MédiTech Santé (Ile-de-France) — healthcare, in particular treatment of infectious diseases and cancer

Companies based in selected R&D areas and participating in official cluster projects are eligible for a range of exemptions from fiscal and social charges (capped at €100,000 per 36-month period). For more information : http://www.competitivite.gouv.fr

September 2006

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Glossary

Below is a list of French terms that foreign companies are likely to encounter when locating their activities in France. Each term is followed by a brief explanation in English. Readers should be aware that the technical terms in English do not necessarily cover exactly the same concepts as the French terms. For further explanations, please contact IFA.

FRENCH TERM

ENGLISH TERM

Autorisation provisoire de travail Bail commercial Bail professionnel Bureau de liaison Carte de séjour Centre des impôts Centre d’affaires Code du Travail Comité d’entreprise Commune Contrat à durée indéterminée (CDI) Contrat à durée déterminée (CDD) Conseil d’administration Conseil de surveillance Convention collective

Temporary work permit Commercial lease Professional lease Liaison office Resident permit Tax office Business center French Labor Laws Labor management committee/“works council” City authorities Labor contract of unspecified duration Labor contract of specified duration Board of directors Supervisory council Sector-specific collective agreement on labor relations R&D tax credit Decree

Crédit d’impôt recherche Décret Entreprise Unipersonnelle à Responsabilité Limitée (EURL) Gérant Greffe du tribunal de commerce Groupement d’intérêt économique (GIE) Inspection du Travail Office des Migrations Internationales Plan social Préfecture Prime à l’aménagement du territoire (PAT) Prud’hommes Salarié Société anonyme (SA) Société à responsabilité limitée (SARL) Société civile Société en commandite par actions Société en nom collectif Société par actions simplifiée (SAS) Taxe d’habitation Taxe foncière Taxe professionnelle Visa de long séjour

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Limited liability company with a single shareholder Manager Trade register (Commercial court register) Incorporated Joint Venture Labor inspection Office of Immigration Services Layoff plan Local representative of national government in each French département Development grant Industrial disputes conciliation board Salaried employee Stock company Limited liability company Non-trading partnership (e.g. real estate or medical services) Partnership limited by shares General partnership Simplified corporation Housing tax Property tax Business tax Long-term visa

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Links

www.ademe.fr : Environment and energy conservation agency www.anvar.fr : French innovation agency (OSEO/Anvar) www.apce.com : Business Creation Agency www.ccip.fr : Chamber of Commerce and Industry www.cleiss.fr : French center for European and international social security www.datar.gouv.fr : Delegation for Planning and Regional Development www.diplomatie.gouv.fr : Ministry of Foreign Affairs www.douane.gouv.fr : Customs administration www.drire.gouv.fr : Regional directorate for industry, research and the environment www.education.gouv.fr : Ministry of education www.europa.eu.int : European Union www.finances.gouv.fr/DGCCRF : General Directorate for Competition Policy, Consumer Affairs and Fraud Control www.greffe-tc-paris.fr : Paris Commercial Court Clerk’s Office www.35h.travail.gouv.fr : Information on working hours in France www.impots.gouv.fr : Tax administration www.industrie.gouv.fr : Ministry of Industry www.legifrance.gouv.fr : French legislation and regulations in force www.minefi.gouv.fr : Ministry of the Economy, Finance and Industry www.recherche.gouv.fr : Ministry of Research and New Technology www.retraite.gouv.fr : Information on the French pension system www.service-public.fr : French government portal www.services-public.fr/formulaires : Online forms for individuals and businesses (French government) www.travail.gouv.fr : Ministry of Labor www.urssaf.fr : Agency that collects social security and family allowance charges www.vie-publique.fr : Presentation of the French government and administrative structure

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Contacts

France

Belgium

Paris Invest in France Agency 77, bd Saint Jacques 75014 Paris Tel: +33 1 44 87 17 17 Fax: +33 1 40 74 73 27 www.investinfrance.org [email protected]

Invest in France Agency 475, avenue Louise B-1050 Bruxelles Tel: +32 2 646 59 40 Fax: +32 2 646 60 90 www.investinfrance.org/Benelux/ [email protected]

Contacts : Sandrine Coquelard [email protected] Marie-Catherine Alric [email protected]

EUROPE Germany Invest in France Agency Königsallee 55 D-40212, Düsseldorf Tel: +49 211 86 81 655 Fax: +49 211 86 81 656 www.investinfrance.org/Germany/ [email protected] Invest in France Agency Französisches Generalkonsulat Zeppelinallee 35 D-60325 Frankfurt Tel: +49 69 79 50 96 70 Fax: +49 69 79 50 96 69 http://www.investinfrance.org/Germany/ [email protected] Invest in France Agency Pettenkoferstrasse 24 D-80336 München Tel: +49 89 514 69 781 Fax: +49 89 514 69 782 www.investinfrance/Germany [email protected]

Austria Mission économique Reisnerstrasse 50 A-1030 Wien, Österreich Tel: +43 1 712 63 57 18 Fax: +43 1 712 62 99 http://www.investinfrance.org/Germany/ [email protected]

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Spain Barcelona Invest in France Agency Avenida Sarriá, 102 Edificio Sarriá Forum-11e Planta E-08017 Barcelona Tel: +34 93 205 18 90 Fax: +34 93 205 18 90 www.investinfrance.org/Spain/ [email protected] Madrid Invest in France Agency Marqués de la Ensenada, 10 4e Planta E-28004 Madrid Tel: +34 918 377 850 Fax: +34 918 377 851

Portugal Invest in France Agency Rua Castilho 50 - 2 1269-008 Lisboa Codex Tel: +351 21 381 40 50 Fax: +351 21 381 40 60 www.investinfrance.org/Spain/ [email protected]

Italy Invest in France Agency Via Cusani, 10 I-20121 Milan Tel: +39 02 72 02 25 43 Fax: +39 02 87 66 12 www.investinfrance.org/Italy/ [email protected]

Ireland Mission économique Marine House Clanwilliam Place Dublin 2 Tel: +353 1 668 07 77 Fax: + 353 1 661 72 91 www.investinfrance.org/UK/ [email protected]

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Contacts

Netherlands Invest in France Agency Wibautstraat, 129 NL – 1091 GL Amsterdam Tel: +31 20 662 20 39 Fax: +31 20 662 08 31 www.investinfrance.org/Benelux/ [email protected]

United Kingdom Invest in France Agency 21 Grosvernor Place GB-London SW1X 7HU Tel: +44 20 7823 0900 Fax: +44 20 7235 8453 www.investinfrance.org/UK/ [email protected]

Switzerland

Vancouver Mission économique de l’Ambassade de France 1130 West Pender Street - Suite 1102 Vancouver - V6E 4A4 – British Columbia Canada [email protected] www.investinfrance.org/NorthAmerica Tel: +1 604 684 1271 Fax: +1 604 684 2359 Montreal Mission économique de l’Ambassade de France 1000 rue de la Gauchetière Ouest - Bureau 2710 Montreal - H3B 4W5 - Quebec Canada [email protected] www.investinfrance.org/NorthAmerica Tel: +1 514 878 98 51 Fax: +1 514 878 36 77

Invest in France Agency Zeltweg 48 - Postfach 1560 CH-8032 Zurich Tel: +41 44 261 45 00 Fax: +41 44 261 45 05 www.investinfrance.org/Switzerland/ [email protected]

Toronto Mission Economique 20 Queen Street West Suite 2004 Toronto - ON M5H 3R3 - Ontario Tel: +1 416 977 12 57 Fax: +1 416 977 79 44 www.investinfrance.org/NorthAmerica/ [email protected]

Scandinavia

ASIA AND FAR EAST

Invest in France Agency Kungsgatan 58 S-11122 Stockholm Tel: +46 8 545 850 40 Fax: +46 8 662 59 69 www.investinfrance.org/NordicCountries/ [email protected]

JAPAN

NORTH AMERICA New York Invest in France Agency 810 Seventh Avenue Suite 3800 New York, NY 10019 Tel: +1 212 757 9340 Fax: +1 212 245 1568 www.investinfrance.org/NorthAmerica [email protected] Chicago Invest in France Agency 205 North Michigan Avenue Suite 3750 Chicago, IL 60601 Tel: +1 312 628 1054 Fax: +1 312 628 1033 www.investinfrance.org/NorthAmerica/ [email protected]

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Tokyo Invest in France Agency Hanazono-koen Bldg, 2F 1-20-13 Shinkuju Shinkuju-ku Tokyo 160 – 0022 Tel: +81 3 33 55 59 00 Fax: +81 3 33 55 59 30 www.investinfrance.org/Japan/ [email protected] Nagoya Invest in France Agency Nagoya Daiya Bldg, No. 1 6F 3-16-22, Meieki, Nakamura-ku 450-0002 Nagoya Tel: +81 52 582 0559 Fax: +81 52 582 0560 www.investinfrance.org/Japan/ [email protected]

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Contacts

Osaka Invest in France Agency Crystal Tower 10F 1-2-27, Shiromi, Chuo-ku 540-6010 Osaka Tel: +81 6 4790 1537 Fax: +81 6 4790 1538 www.investinfrance.org/Japan/ [email protected]

HONG KONG

CHINA

SINGAPORE

Shanghai Mission Economique de Shanghai - Ambassade de France en Chine 21Floor, Hai Tong Securities Building No.689, Guang Dong Road, Shanghai 200001 Tel: +86 21 6135 2040 Fax: +86 21 53 06 36 37 http://www.investinfrance.org/China/ [email protected]

Mission économique de l’Ambassade de France 101-103 Cluny Park Road Singapore 259595 Tel: +65 68 80 78 78 Fax: +65 68 80 78 63 www.investinfrance.org/Singapore/ [email protected]

KOREA

New Delhi Mission économique de l’Ambassade de France 2/50 E Shantipath Chanakyapuri 110021 New Delhi Tel: +91 11 26 11 87 48 Fax: +91 11 26 87 23 06 [email protected] http://www.investinfrance.org/India/

Invest in France Agency Samheung Bldg, 8th Fl 705-9 Yeoksam-Dong Kangnam-ku Seoul 135-711 Tel: +822 564 04 19 Fax: +822 3452 90 25 www.investinfrance.org/Korea/ [email protected]

TAIWAN Invest in France Agency Bank Tower #1401, 205 TunHwa North Rd Po Box 118 1361- 105 Taipei Tel: +886 2 2713 3552 Fax: +886 2 2717 1353 www.investinfrance.org/Taiwan/ [email protected]

Invest in France Agency Admiralty Center, Tower II, 25F 18, Harcourt Rd – GPO Box 2421 Hong Kong Tel: +852 2158.3761 Fax: +852 2158.3804 www.investinfrance.org/HongKong/ [email protected]

INDIA

AUSTRALIA AUSTRALIA Mission économique de l’Ambassade de France St Martins Tower/ level 35 31 Market Street Sydney NSW.2000 Tel: +612.92.64.27.11 Fax: +612.92.64.59.88 www.investinfrance.org/Australia/ [email protected]

The intellectual property rights to this document are protected and belong exclusively to the Invest in France Agency. No part of this document may be reproduced for commercial purposes without the permission of IFA.

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