By Meghna Prakash, Legal Consultant, India Practice, Franklin

When a company decides to extend its business outside its domestic borders, it is often a steep learning curve when it comes to local business practices and ensuring compliance. This is no different for Indian companies venturing into France, which is often a simultaneously easy and difficult regulatory environment to navigate.

Based on our significant experience in advising Indian companies setting up their business in France, below is a checklist of do’s and don’ts for doing business in France.

THE DO’S

✓ Determine the optimal French legal structure for setting up an entity. France offers multiple options that are easy to manage and require low initial capital investment and governance.

✓ Understand that French labour laws are extensive and complex. There is no ‘one size fits all’ employment contract. Every contract should be specific to the resource, taking into account the functions of the job, the levels of responsibility, and duration of employment.

✓ Be prepared with checklists of compliances required to run the French business, particularly addressing corporate governance, taxation, labour law and data protection issues.

✓ Your homework on your local partner or business manager. Be confident in their ability to help run your business in France.
✓ Hire locally. Having someone who understands French business culture can go a long way in ensuring success.

THE DONT’S

✗ Blindly follow examples of Indian companies in France, who often decide to set up branches as a first step. Pick a structure that makes sense for the level of your operations planned in France.

✗ Assume that template contracts that work in other European countries will work in France. Always have contracts vetted from a French law perspective.

✗ Assume that running a company in France is the same as running it anywhere else. It is important to understand the various levels of regulatory compliances and ensure that filings are done in an efficient manner, to avoid penalties later.

✗ Leave the day to day management of the company to someone else. Take an active interest and ensure that everything that needs to get done, is being done.

✗ Just expatriate Indian employees to France to run the business. Some of the most successful Indian ventures in France employ equal number of Indian and French employees.

Above all, have a long term strategy for the French venture, and consult local experts to put a business plan in place. This will help navigate the more complex human resource and immigration issues that often accompany setting up a business in France.


 

Meghna Prakash, Legal Consultant, India Practice, Franklin
Over the past decade, Franklin, one of the leading French independent firms, has played a leading role on many of the most demanding mandates to come to market. The firm handles Bank Finance (including regulatory), Competition & Distribution, Corporate/M&A, Employment, Energy & Natural Resources, Environment, Intellectual Property, Investment funds, Litigation & Arbitration, Outsourcing, Public Law, Private Equity (transactional and funds), Projects, Real Estate, Technology, Media & Telecoms, Wealth Management & Corporate Tax and offers a dedicated India Practice.