There are many reasons why you might consider setting up business in France. Whether you are a business start-up or a company setting up subsidiary offices, France has a large in-country market (over 65 million consumers) as well as access to the single market of the European Union (over 500 million consumers). It has the second largest economy in Europe and sixth in the world, making it a country with one of the highest purchasing powers.
However, the cost of setting up business in France is one of the lowest. For example, renting office space in Paris’s business district is typically around half the price of renting office space in London’s West End.
France provides an extremely favourable business environment, largely due to the tax system. Other considerations when setting up business in France are the new tax measures included in the latest Finance Law 2019. For example, the research tax credit is now open to all companies.
So how can foreign companies profit from the research tax credit in France?
The research tax credit (C.I.R.) is a tax measure that enables companies to receive partial funding of research, development and experimentation (R&D). This can be in the form of reimbursement or a reduction of corporate tax.
International French group branch offices or subsidiary companies can obtain from the French state a reimbursement of up to 30% of their spending on research, development and experimentation operated in France and in the same conditions as French companies.
Because the C.I.R. in France is a tax measure, it is not subject to any regulatory framework and is not taken into account for the limit of European public fund aids.
The spending eligible for C.I.R. are as follows:
- Salaries and related expenses
- Depreciation allowances for assets used in research projects
- Operational expenses
- Intellectual protection expenses
- Technology watch expenses assured by researchers
- The costs of subcontracted research entrusted to public research entities, to scientific experts and private structures approved by the Ministry of Research.
None of these expenses are capped.
As well as the Research tax credit, France provides for multiple grants and tax incentives to attract new investors. These take the form of tax credits and exemptions at both a national and regional level and investors must meet strict criteria to apply for these.
For more information on Foreign Tax Credit or advice on a ‘Setting Up Business In France’, please contact our legal specialists at Delcade on +33 (0)1 75 43 18 56 or e: firstname.lastname@example.org
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