Doing Business With a France PEO – EOR
France is the seventh-largest economy globally and the third-largest in Europe in terms of GDP. The business-friendly environment, exceptional infrastructure, highly educated workforce, and developed financial markets of France make the country a sought-after destination for companies looking to expand overseas.
As one of the most advanced and industrialized nations in Europe, France offers foreign investors numerous opportunities to grow their business. Moreover, the strategic location of France at the heart of Europe provides direct access to the European market and its partners.
Although France is home to many foreigners, immigrating to the country can be quite a task, especially if you are not an EU citizen or do not speak French. Unlike most other European countries, France has strict immigration policies. Non-residents require a long-stay visa to get an official French residence permit (carte de séjour) for up to a year or more, provided French authorities approve their travel request.
Naturally, expanding your business to France requires you to fully comply with the country’s labor laws, business etiquette, and work culture. While it seems like an ordeal, a France PEO/EOR can help manage these requirements easily.
For instance, Multiplier’s EOR and PEO solutions can help you employ and manage talent in France by offering local entities. We can handle all your HR needs, from employment contract generation to payroll management.
Why Use a France PEO?
A PEO or professional employer organization is a third-party human resource outsourcing firm performing various employee administration tasks on behalf of a business. The PEO essentially enters a joint-employment relationship with the business/employer, sharing and managing many employee-related responsibilities and liabilities.
Companies outsource their HR functions, such as payroll management, benefits administration, etc., to the PEO serving as the professional employer of its client’s employees.
A France PEO has significant advantages for a business, especially employers who do not have adequate HR expertise, time, or resources to focus on such tasks.
Here’s a look at the benefits of a France PEO and how it can help your business:
Talent acquisition and management
Companies often miss many crucial hiring steps (for example, placing job ads, interviews, onboarding, etc.) given the time and money spent on recruitment. A PEO France can offer end-to-end talent service and recruitment assistance from hiring and employee training to performance management.
Employment and tax laws are ever-changing, and no matter the country, you must be on top of its federal and local rules and regulations to avoid penalties. A France PEO can manage your HR activities while remaining up-to-date with the country’s employment laws and tax regimes so that your business doesn’t run into regulatory risks.
Payroll and tax filing
Working with a France PEO can automate your payroll and tax filing process while significantly lowering payroll processing and other accounting costs. Outsourcing payroll administration to a PEO also eliminates the possibility of duplicate data entry or error.
A France PEO can provide your employees access to benefit plans such as medical coverage without you having to bear the regulatory and administrative burdens. Likewise, the PEO can handle various aspects of workers’ compensation programs like claims management and insurance premiums that are time-consuming and costly for internal teams.
France PEO Costs
PEOs typically follow either a fixed or variable pricing model. A PEO may charge a fee based on a percentage of your company’s annual payroll or a flat fee per employee. In other words, the cost of a PEO will primarily be based on either of the following:
The PEO will calculate the cost of its services based on a percentage of your annual payroll.
In this method, the PEO will compute its service fees based on the number of employees in your company.
Overall, France’s PEO costs depend on several factors, such as the size of your business, the services you want, and some standard expenses related to taxes, compensation, and benefits.
Multiplier PEO has a flat and transparent employee-based pricing model starting at just $300 per employee per month. It covers multi-lingual contracts, benefits administration, international payroll, expenses, and leave management for full-time employees. Our flexible and comprehensive PEO platform offers a secure experience in global HR management with affordable pricing models.
How to Hire in France?
When hiring in France, you must be up-to-date with the Labor Code and Social Security Code. These legislations extensively regulate employment conditions and relationships in the country.
While the Labor Code (Code du Travail) includes all statutory provisions around individual and collective employment matters, the Social Security Code (Code de la Sécurité Sociale) deals with employee benefits. In addition, the Penal Code (Code pénal) is applicable in some areas, like health, safety, and non-discrimination.
Partnering with a France PEO like Multiplier can help you with employee hiring while ensuring compliance with the relevant laws.
However, here are some aspects of the hiring process in France that you must be aware of before expanding your business.
Setup a local entity
The French law allows the setting up of broadly two types of business entities:
Several types of limited and unlimited liability companies exist under French law, and most foreign investors prefer the former. Three forms of limited liability companies exist in France:
Société anonyme (SA)
Primarily used by large French corporations, the SA is a legal structure allowing the public offering of shares. However, the SA is quite a complex company form and not ideal if you set up your first corporation in the country.
Société à responsabilité limitée (SARL)
A widely used form of corporation in France and ideal for small businesses, the SARL is relatively easy to establish and operate. While SARL has its advantages, such as simple rules and regulations and low capital requirements, it has no access to capital markets, and you cannot list its shares on a stock exchange.
Société par actions simplifiée (SAS)
More flexible and less restrictive than the SARL, SAS is a simpler version of SA with low capital requirements. It offers several advantages, such as greater freedom for organizing the operating and management structures with the president as the only compulsory corporate personnel. However, it does not have access to capital markets, and you cannot list its shares on a stock exchange.
A branch is a permanent business entity established by a foreign company in France. French law does not recognize a branch as a separate legal entity, and the foreign company appoints the branch’s representative. Establishing a branch is relatively simpler since it is not subject to the legal formalities involved in incorporating a company. In addition, a French branch office has no articles of association and no share capital. However, it must file tax returns just like a company.
France employment contracts
Employment contracts in France come in different forms. However, if you are not an EU/EEA country citizen, you may not have access to all kinds of employment contracts. Also, while you can translate employment contracts to a language of your choice, the French version will be the legally recognized version in case of disputes.
Here’s a list of the different types of employment contracts in France:
- Permanent employment contract (contrat de travail à durée indéterminée – CDI): A permanent employment contract in France is a long-term work agreement specifying part-time/full-time, working hours, notice period, and other conditions.
- Fixed-term contract (contrat de travail à durée déterminée – CDD): A fixed-term contract specifies the start and end dates, with the maximum length typically 18 to 24 months. Such a contract must be in writing, and neither party can end the contract prematurely without a qualifying ground or mutual agreement.
Taxation in France
France primarily has three taxation systems – the French income tax, social security contributions, and tax on goods and services.
Companies operating in France must also pay corporate tax based on their revenue. The country follows a pay-as-you-earn (PAYE) taxation system whereby instead of filing income tax for the prior year, individuals are taxed at the income source in monthly payments. In addition, France has an extensive list of federal and local taxes to follow.
If you are a non-resident in France, you will be taxed on your income from French sources. The minimum personal income tax on French-sourced income (up to €27,519) for non-residents in France is 20%, and 30% for income above the threshold.
The rules and regulations around payroll processing and reporting in France are complicated.
Employers in France are legally obliged to provide a paper or electronic payslip to their employees. Employees must be paid at least monthly (with the exception of temporary, seasonal, work-from-home, or intermittent employees). The payslip must include details like the gross and net pay, social tax liabilities for both parties, tax exemptions, work hours, and overtime rates.
The payroll in France also includes a broad list of taxes, including corporate, income, social, and apprenticeship. A France PEO can conveniently handle the payroll while ensuring compliance with French laws.
Employment benefits in France
Employees in France are entitled to several statutory benefits and paid leaves that employers must specify in the employment contract. Following is a list of the employee benefits in France:
- Maternity leave
- Five weeks of annual leave
- 11 national holidays (Labor Day is a paid holiday)
- Sick leave
- Health coverage
- Additional benefits such as unemployment insurance and a national pension scheme
Additionally, it is customary for some employees in France to receive a 13th-month bonus at the end of December. However, benefits and compensation may change for companies that are a part of collective bargaining agreements.
Employee severance and terminations in France
Termination and severance terms are stringent in France. An employee cannot be terminated unless there is a legitimate cause such as disobedience, theft, violence or verbal abuse, inappropriate behavior, repeated unauthorized leave, professional inadequacy, or sexual harassment.
Other just causes for dismissal include the closure of business, restructuring to protect the company’s competitiveness, and eliminating or altering positions due to financial difficulties.
Handling HR operations in a workplace can be challenging, especially if your business is overseas. A reliable and global PEO platform like Multiplier can help you navigate the complexities of international employee management with dependable and risk-free solutions.
For instance, our experts can handle employment contract generation, payroll management, multi-currency payments, insurance and benefits administration, contingent workforce management, taxes, and much more. With our France PEO, you can manage all your HR services while ensuring compliance with tax regimes and labor laws.
Our France PEO Simplifies Your Expansion
Here’s what Multiplier PEO/EOR solutions include to help businesses expand overseas:
- Employment contract generation
- Multi-currency payments
- Managed payroll services for employers with an entity in the location
- Contingent workforce management
- Employee insurance and benefits
- Cryptocurrency for freelancers
Employee stock ownership plans (ESOPs) for startups