Doing Business In... 2026 Comparisons

France operates under a civil-law system. This means that greater emphasis is placed on codes and statutes rather than on case law and practices, as is the case in common-law jurisdictions. The exception is French administrative law, which is primarily created by the French administrative courts.

France has a written constitution (Constitution de la Cinquième République, or the “French Constitution”), which forms the basis of the French legal system and uses a system of legal codification (notably including the Civil Code, the Commercial Code, the Criminal Code, the Labour Code and the Tax Code). French law has a dual system comprising the following:

• judicial/private law (droit privé), including civil and criminal law in particular; and
• public law (droit public), including administrative and constitutional law in particular.

In addition to the French Constitution and international treaties, there are different domestic sources of laws and regulations in France. French laws (lois) are adopted by the French Parliament, which is made up of the National Assembly (Assemblée Nationale) and the Senate (Sénat). Meanwhile, ordinances (ordonnances) and regulations (règlements, being décrets or arrêtés) are issued by the French government.

The court system in France is divided into two parts:

• judicial courts (dealing with civil and criminal laws), comprising courts of first instance (ie, civil, commercial, labour and criminal courts), courts of appeal and the Supreme Court of Appeal (Cour de cassation); and
• administrative courts (dealing with public laws), comprising courts of first instance, courts of appeal and the Council of State (Conseil d’État).

In addition, there is a Constitutional Council (Conseil constitutionnel), which is responsible for controlling the compliance of new laws and statutes with the French Constitution, as well as the regularity and validity of political elections. Finally, there are various independent regulatory authorities, such as the Financial Markets Authority (Autorité des marchés financiers), which regulates the French financial markets, and the French Competition Authority (FCA – Autorité de la concurrence), which oversees all antitrust, competition and merger control matters in France.

France has a foreign direct investment (FDI) review/approval process in place. The Office of Foreign Investment Control in France (Bureau du contrôle des investissements étrangers en France, or CIEF) within the Ministry of Economy, Finance and Industrial, Energy and Digital Sovereignty is in charge of such review.

French FDI regulations apply when a foreign investor undertakes any of the following types of investments in a French company or business engaged in activities deemed sensitive under French FDI rules:

• the acquisition of control (as defined by Article L. 233-3 of the French Commercial Code (FCC)) of an entity governed by French law or an establishment registered with the Trade and Companies Register (Registre du commerce et des sociétés) in France;
• the purchase, in whole or in part, of a business (branche d’activité) of an entity governed by French law;
• for non-EU investors, the crossing – by the investor, directly or indirectly, acting alone or in concert – of the 25% threshold of the voting rights of an entity governed by French law; and
• for non-EU investors, the crossing – by the investor, directly or indirectly, acting alone or in concert – of the 10% threshold of the voting rights of an entity governed by French law whose shares are listed on a regulated market.

The main sectors/industries relevant to such control are those related to defence and, more broadly, all activities likely to jeopardise French national interests with regard to critical infrastructures (eg, energy, transportation, public health, electronic communications, space operations, public health and critical raw materials). R&D relating to critical technologies – such as cybersecurity, AI, robotics, additive manufacturing, semiconductors, quantum technology, energy storage, and biotechnologies and technologies related to the production of low-carbon energy and photonics – can also be considered sensitive activities.

As a general rule, intra-group operations (ie, those between entities ultimately under common control) are exempted subject to certain limitations.

French FDI clearance is a mandatory regime –ie, a foreign investment cannot be completed before FDI clearance is obtained. As such, French FDI clearances are generally provided as conditions precedent to closing a transaction.

French FDI authorities review and assess the transaction based on the nature and sensitivity of the French activities acquired by the foreign investor. The aim is to determine whether such acquisition is likely to prejudice the French national interests with regard mainly to national defence, public authority, public order or public security in the sectors deemed sensitive by French FDI regulations.

This assessment is a fact-based analysis on a multi-criteria basis. The nature and scope of the French target activities, as well as the identity of the foreign investor, its size, its industrial project for France, potential relationships with foreign states, etc, will be reviewed in depth. French FDI regulations do not apply different analysis criteria based on the nature of the investor or the stake acquired.

It should be noted that, at EU level, the FDI screening framework is currently undergoing significant reform. In particular, the revised EU FDI Screening Regulation, which seeks to establish a more harmonised baseline across EU member states (“Member States”), was formally adopted by the Council of the EU on 8 June 2026. Member States will have 18 months to implement the required national screening mechanisms ahead of its expected application in January 2028.

Filing

The authorisation process takes place in one or two phases, depending on the nature of the French activities at stake and the risk assessment made by the FDI authorities with regard to French national interests.

Phase I

The FDI authorities have 30 business days from the receipt of a filing to notify the foreign investor of any of the following:

• the investment falls outside the scope of the FDI regulations;
• the investment falls within the scope of the FDI regulations and is unconditionally authorised; or
• the investment falls within the scope of the FDI regulations and requires further analysis to determine under what conditions it could be authorised (Phase II opening).

The FDI authorities may issue post-filing information requests, which suspend the review period until satisfactory responses are provided by the investor.

Phase II

The FDI authorities can, during or more generally at the expiry of the Phase I review, open a Phase II review should they consider that the transaction requires further analysis. The FDI authorities must render their decision within 45 business days from the opening of the Phase II review. During the Phase II review, the FDI authorities may grant or deny their clearance or grant their clearance subject to commitments from the investor. These commitments must be proportionate to the necessary protection of French national interests.

Sanctions for Non-Compliance

The French FDI regime is “mandatory” ‒ ie, any foreign investment made in breach of French FDI regulation would expose the foreign investor to a wide range of severe sanctions, including the following:

• the nullity of the French investment;
• injunctions to file for clearance;
• the obligation to unwind the investment or to amend the investment terms;
• the suspension of the French target’s voting rights;
• a prohibition on distributing dividends by the French target;
• payment of financial penalties; and
• criminal penalties (imprisonment and fines).

The French FDI authorities may condition their approval of a transaction on specific commitments from the foreign investor. The scope of these commitments can vary significantly depending on the national interests at stake. Notable examples include the following:

• maintaining the French target’s sensitive activities and industrial capabilities on French territory, such activities to be carried out by a company incorporated under French law;
• ensuring that the French target company continues to operate the sensitive activities for the benefit of the sensitive clients on reasonable technical and commercial terms;
• protecting sensitive IP and sensitive information; and
• adapting the internal organisation and governance of the entity, creating certain specific committees to oversee/deal with critical topics, and segregating sensitive information.

For the most critical activities, the FDI authorities can ask for a golden share for the benefit of the French state or a French state body, etc.

The decisions of the FDI authorities are subject to judicial claim (recours de plein contentieux) before French administrative courts. As such, a foreign investor may challenge a denied authorisation or overly stringent conditions before French administrative courts.

As it is particularly valued for its flexibility and streamlined governance framework, the most common type of corporate vehicle in France is the simplified joint-stock company(société par actions simplifiée, or SAS), the main features of which are as follows:

• Governance: One president and, optionally, one or several general manager(s) and/or deputy general manager(s), or any other type of collective body set up by the shareholder(s) in the articles of association (statuts) (for more detail, see 3.4 Management Structures).
• Shareholders’ liability: Form of company limited by shares, ie, the shareholders’ liability is limited to the amount of their contribution to the share capital.
• Share capital: EUR1 minimum.
• Number of shareholders: One shareholder minimum.
• Usual purpose: Best suited for greenfield projects, private equity projects, start-ups and scale-ups, patrimonial holdings and group subsidiaries.

Even though they have become less commonly used in practice, the following corporate forms are also worth noting:

• the limited liability company(société à responsabilité limitée, or SARL): a form of company limited by shares, often used for businesses that have a strong personal aspect (intuitus personae) (eg, family businesses, etc);
• the joint-stock company (société anonyme – SA): a form of company limited by shares, nowadays best suited for listed companies and groups’ holdings; and
• the real estate civil company (société civile immobilière– SCI): a form of company not limited by shares, mostly used to own/manage real estate properties.

The answers provided in the sections below will focus on the main rules applying to SAS companies only.

The main steps to incorporate an SAS are as follows:

• drafting and finalising the articles of association (which determine the registered address, the amount of contributions and resulting share capital, and the number of issued and paid-up shares (in kind, in cash or in know-how for an SAS or SARL), the governance (including the appointment of the first legal representatives and/or statutory auditors, if any), the corporate purpose, the corporate name, etc) and the ancillary corporate documentation (eg, statement of parenthood and absence of convictions for each newly appointed legal representative, ultimate beneficial owner form, etc);
• obtaining the certificate confirming the deposit of the share capital (certificat de dépôt des fonds) issued by the depository bank or a notary;
• gathering of the ancillary supporting documents (eg, ID/passport of the newly appointed legal representative(s), title for the registered address, corporate excerpt (extrait Kbis)of the statutory auditors, if any, etc);
• executing the articles of association and ancillary corporate documentation;
• completing the dematerialised incorporation formalities, notably (i) publication in a French legal gazette (journal d’annonces légales), (ii) publication in the French Official Gazette (Bulletin officiel des annonces civiles et commerciales, or BODACC) and (iii) registration with the Trade and Companies Register and the French National Companies Register (Registre national des entreprises); and
• obtaining the incorporation extract (extrait Kbis d’immatriculation) from the clerk (greffier) of a French commercial court (Tribunal de commerce).

The incorporation process generally takes approximately two weeks from the filing of the incorporation application to the issuance of the company’s registration extract. While the registration procedure is now largely digitalised, the filing can only be completed once all required corporate documents and supporting materials have been duly executed and collected, which may prove time-consuming in practice.

From a corporate standpoint, the main annual reporting obligation of a French company is the drawing up, approval (within six months as from the end of the fiscal year (FY)) and publication of its annual financial statements.

In addition, French companies are subject to reporting and disclosure obligations when the following corporate information is modified:

• any information disclosed in the company’s commercial court register extract (extrait Kbis) (ie, the share capital, the legal representatives, the registered address or the statutory auditor of the company, etc);
• any information included in the company’s articles of association; and/or
• the ultimate beneficial owner of a company.

The SAS is the most flexible form of company in France, notably with respect to its governance.

The FCC only requires one mandatory legal representative in the SAS: the president of the company (président). The president may be a natural or juristic person and is vested by law with the broadest powers to bind and represent the company vis-à-vis third parties in all circumstances, within the limits of its corporate purpose.

In addition to the president, the articles of association may allow for (i) the appointment of one or several general managers (directeurs généraux) or delegate general managers (directeurs généraux délégués), the powers of which shall be provided in the articles of association (in practice, they are often vested with the same individual powers as the president) and/or (ii) the setting up of a collective body (such as a board, management committee, strategic committee, supervisory committee, etc), the composition and powers of which shall be determined in the articles of association.

Civil Liability of Directors and Officers

Directors and officers may incur civil liability towards the company, its shareholders, or third parties:

• Towards the company: Directors and officers may incur civil liability essentially on account of violations of the laws or regulations applicable to the company or of its articles of association, or in case of tortious or negligent acts of management. A civil liability claim can be brought by the company through its legal representatives (action ut universi) or, in case of failure of its legal representatives to bring such claim, by the shareholder(s), acting here in the interest of the company (action ut singuli).
• Towards the shareholder(s): Directors and officers may incur civil liability essentially in case of loss personally suffered by the shareholder(s) as a result of a fault by a director or officer of the company (and as long as such loss is distinct from the loss suffered by the company, if any).
• Towards third parties: Directors and officers may incur civil liability only where they have committed a fault that is detachable from their functions and personally attributable to them. This is the case where a director or officer intentionally commits a fault of particular gravity incompatible with the normal exercise of its corporate functions. In the absence of such a detachable fault, a third party may only obtain damages by bringing a claim against the company itself.

The civil liability of directors and officers can be covered by a D&O insurance scheme.

Criminal Liability of Directors and Officers

Directors and officers may incur criminal liability, notably for the following:

• Misuse of corporate assets (abus de biens sociaux): This is the most frequently prosecuted offence, targeting directors and officers who, in bad faith, have used the company’s assets or credit in a manner they knew to be contrary to the company’s interest, for personal purposes or to favour another company or enterprise in which they had a direct or indirect interest.
• Presenting or publishing misleading financial statements: This targets directors and officers who have knowingly published or presented to shareholders, with a view to concealing the true financial position of the company, annual accounts that do not give a true and fair view of the results for the financial year, the financial position and the assets of the company.
• Distribution of fictitious dividends.

The criminal liability of directors and officers cannot be covered by a D&O insurance scheme under French law.

Liability in Insolvency Proceedings

Where judiciary liquidation proceedings are opened, directors and officers may be exposed to the following:

• Action for liability for insufficiency of assets (action en responsabilité pour insuffisance d’actif): The court may order directors and officers to bear all or part of the company’s debts where a management fault contributed to the insufficiency of assets.
• Personal bankruptcy (faillite personnelle) or a ban on managing companies: Courts may impose these in cases of particularly serious misconduct (including misuse of corporate assets, fraudulent or irregular accounting, and the abusive continuation of a loss-making business).

Shareholders’ Liability and the Concept of “Piercing the Corporate Veil”

Principle of limited liability for SAS companies

The legal personality of an SAS acts as a protective screen between the company’s creditors and the personal assets of its shareholder(s). Therefore, the shareholder(s) of an SAS are liable for the company’s debts only up to the amount of its/their contributions.

French law equivalent of “piercing the corporate veil”

French law does not formally enshrine the concept of piercing the corporate veil as a general doctrine, but recognises several mechanisms allowing courts to disregard the protection afforded by the company’s legal personality in certain situations, notably the following:

• Commingling of assets(confusion de patrimoine): Courts may extend proceedings opened against a company to another entity or to a shareholder where their respective assets are so commingled as to be indistinguishable.
• Abuse of legal personality to defraud creditors: The action paulienne allows creditors to have acts performed in fraud of their rights declared unenforceable against them, including through the interposition of a company created for that sole purpose.
• Personal liability of shareholders for their own wrongful acts: A shareholder’s liability towards third parties may be engaged where the shareholder has committed a fault that is detachable from its capacity as shareholder, which is an intentional fault of a particular gravity incompatible with the normal exercise of shareholder prerogatives.

France has one of the most structured and employee-centric labour law systems in the world.

This statutory framework is supplemented by:

• applicable sector-level or company-level collective bargaining agreements (CBAs), which often provide more favourable provisions than the Labour Code;
• company policies and internal regulations, where mandatory;
• employment contracts, which may provide additional rights provided that they comply with mandatory legal and collective bargaining provisions;
• French case law, particularly decisions of the Supreme Court of Appeal (Cour de cassation), which plays a significant role in interpreting labour legislation; and
• EU law, including directly applicable regulations and directives implemented into French law.

Together, these sources regulate key aspects of the employment relationship, including hiring, remuneration, health and safety, discrimination, employee representation, disciplinary procedures and termination of employment.

As a general rule, a permanent employment contract (contrat à durée indéterminée – CDI) does not legally need to be in writing and may, in theory, be concluded verbally. However, in practice, employers almost always use written contracts to define the terms of employment and comply with their information obligations.

Certain types of employment contracts, including fixed-term contracts (contrat à durée déterminée – CDD) and part-time contracts, must be concluded in writing and contain mandatory statutory provisions. Failure to comply may result in the contract being reclassified as a permanent employment contract.

The employment contract generally specifies essential terms such as the employee’s position, remuneration, place of work, working hours, probationary period (if any), notice period and applicable CBA.

The CDI is the standard form of employment in France. Fixed-term contracts are permitted only in specific cases expressly authorised by law (eg, temporary replacement of an absent employee or a temporary increase in business activity) and are subject to maximum duration and renewal rules. ¬Probationary periods are permitted but must be expressly agreed in writing and cannot exceed the statutory or collectively agreed maximum duration.

In principle, France has a 35-hour statutory working week, with overtime subject to additional compensation.

Overtime hours may be worked in addition to the legal working time, but only within two limits:

• the total working time in a single week must not exceed 48 hours; and
• the average weekly working time calculated over any 12 consecutive weeks must not exceed 44 hours. Overtime must generally be authorised by the employer and gives rise to either increased pay (typically 25% for the first eight overtime hours and 50% thereafter, unless otherwise provided) or equivalent compensatory time off.

Employees are also entitled to minimum rest periods, including:

• 11 consecutive hours of daily rest; and
• 35 consecutive hours of weekly rest, including the mandatory Sunday rest principle, subject to numerous exceptions.

Employees are entitled to a minimum of five weeks of paid annual leave per year, in addition to public holidays where applicable.

Several alternative working time arrangements exist, particularly for managerial employees.

For example, certain autonomous executives may work under a working time scheme set in a “days over the year” arrangement, under which working time is measured in days worked per year rather than hours, provided that specific legal conditions are met.

France is not an employment-at-will jurisdiction. An employer may terminate an employment contract only on legally recognised grounds and must comply with strict statutory procedures.

Individual dismissals must be based on a real and serious cause (cause réelle et sérieuse), which may be:

• personal, such as misconduct, repeated poor performance or incapacity; or
• economic, where justified by economic difficulties, technological changes, business reorganisation necessary to safeguard competitiveness, or cessation of business activity.

The dismissal procedure generally includes a written invitation to a pre-dismissal meeting, the meeting itself, and a formal dismissal letter stating the grounds for the dismissal. Failure to comply with either the substantive or procedural requirements may result in damages.

Employees dismissed for reasons other than serious or gross misconduct are generally entitled to:

• statutory or contractual notice (or payment in lieu thereof);
• statutory dismissal indemnity (depending on the applicable CBA and length of service); and
• payment of accrued but unused paid leave.

Where a dismissal is found to lack real and serious cause, compensation is awarded within the bounds of the statutory scale, which sets minimum and maximum amounts by seniority. Weak grounds or procedural missteps can therefore expose the employer to damages and, in limited cases (eg, null dismissals), to reinstatement.

Employment contracts may also be terminated by resignation, by retirement and by mutual agreement through a mutual termination agreement, which must be approved by the labour administration.

Collective redundancies are subject to additional requirements. Depending on the number of proposed redundancies and the size of the company, employers must consult the Social and Economic Committee (comité social et économique, or CSE) and, in larger-scale redundancy schemes (dismissing at least ten employees over a 30-day period in a company with 50 or more employees), prepare either a social plan (plan de sauvegarde de l’emploi) negotiated with employee representatives or established unilaterally and approved or validated by the labour administration.

Employers must also comply with obligations relating to redeployment, selection criteria, priority for re-employment, and information and consultation procedures. Failure to comply may result in the redundancy process being invalidated or give rise to significant financial liability.

As a negotiated alternative to compulsory redundancies, employers may also conclude a collective mutual-termination agreement (rupture conventionnelle collective), based on voluntary departures and subject to validation by the regional labour administration (Direction régionale de l'économie, de l'emploi, du travail et des solidarités, or DREETS).

Under French law, employee representation is mandatory once certain workforce thresholds are met.

The principal employee representative body is the CSE, which must be established in any company employing at least 11 employees for 12 consecutive months.

The CSE’s powers vary depending on the size of the company:

• Companies with 11 to 49 employees: The CSE primarily presents individual and collective employee claims relating to the application of labour law, CBAs and company policies, and promotes health, safety and good working conditions.
• Companies with 50 or more employees: The CSE has broader information and consultation rights. The employer must inform and consult the CSE before implementing decisions affecting the organisation, management or general operation of the company, including, for example:
1. collective redundancies and restructuring projects;
2. significant organisational or technological changes;
3. changes affecting working conditions or working time;
4. introduction of monitoring or surveillance systems;
5. implementation of technologies affecting employees; and
6. economic and financial matters, strategic business orientations and social policy.

The consultation must take place before the employer’s final decision is implemented, allowing the CSE to issue a reasoned opinion (generally within one month). While the CSE’s opinion is generally advisory and does not bind the employer, failure to comply with the information and consultation obligations may result in civil and criminal sanctions, suspension of the project by the courts in certain circumstances, and claims for damages.

For certain significant projects, the CSE may appoint independent experts (at the employer’s expense in many cases) to assist it in the consultation process, particularly in relation to economic matters, health and safety, or major organisational changes.

In addition, trade unions may appoint union representatives in companies meeting the statutory conditions (generally at least 50 employees and where a representative trade union is established). Union representatives negotiate CBAs with the employer on matters such as remuneration, working time and working conditions.

Finally, employees benefiting from representative mandates (such as CSE members and trade union representatives) enjoy special protection against dismissal. Their dismissal requires prior authorisation from the labour inspectorate.

Tax Residency of Employees

From a French domestic legislation standpoint, an individual is considered to have their tax residence in France if one of the following criteria set out in Article 4B of the French Tax Code (Code général des impôts) is met:

• The individual has their household in France, or otherwise, this corresponds to the location of their main abode. Note: An individual is considered to have their household in France if they live there on a permanent basis, with their spouse (or civil partner and/or children) or alone. If no household can be identified, the location of the main abode is determined based on the individual’s actual presence in France, irrespective of the accommodation conditions.
• The individual carries on a professional activity in France, whether as an employee or otherwise, unless such activity is of a secondary nature. Note: A professional activity is considered primary where it accounts for the majority of the individual’s effective working time.
• The centre of the individual’s economic interests is located in France. Note: An individual who derives a greater proportion of their income from French sources than from foreign sources is deemed to have the centre of their economic interests in France.

Individuals meeting at least one of the above criteria are, in principle, regarded as French tax residents under domestic law, unless they qualify as residents of another jurisdiction under an applicable double tax treaty.

French tax residents are, in principle, subject to tax on their worldwide income (ie, from both French and foreign sources), subject to the provisions of any applicable double tax treaty, whereas non-residents are taxed in France solely on their French-source income.

Personal Income Tax

Personal income tax (impôt sur le revenu) is calculated on the basis of the household unit (foyer fiscal) and is assessed under a progressive scale. For the 2026 tax year (income earned in 2025), the brackets are as follows:

• 0% on income up to EUR11,600;
• 11% on the portion between EUR11,601 and EUR29,579;
• 30% on the portion between EUR29,580 and EUR84,577;
• 41% on the portion between EUR84,578 and EUR181,917; and
• 45% on income above EUR181,917.

The tax liability is calculated using a household quotient (quotient familial) system, which divides total household income by a number of “parts” determined by the composition of the household, thereby moderating the progressive effect for larger families. Non-residents are subject to a minimum withholding rate of 20% (or 30% on income exceeding a specific threshold) on French-source income, unless a tax treaty provides otherwise.

Surtaxes may also apply:

• Exceptional contribution on high incomes (“contribution exceptionnelle sur les hauts revenus”, or CEHR): This additional 3% surtax applies on all types of income exceeding EUR250,000 (for single taxpayers) or EUR500,000 (for married taxpayers), and a 4% surtax applies on income exceeding EUR500,000 (for single taxpayers) or EUR1 million (for married taxpayers). This surtax applies to all types of income received.
• Differential contribution on high incomes (“contribution différentielle sur les hauts revenus”, or CDHR): This additional surtax applies to French tax residents whose global taxable income, after some adjustments, exceeds EUR250,000 (for single taxpayers) or EUR500,000 (for married taxpayers). The purpose of the CDHR is to apply a minimum effective tax rate of 20% on income received by the taxpayers covered. In other words, where the amounts of income tax and CEHR result in an effective tax rate on the global taxable income (as adjusted for the purposes of the CDHR) of less than 20%, the differential contribution (CDHR) will be applied in order to reach this minimum effective tax rate of 20%.

Personal income tax on employment income is collected through a pay-as-you-earn mechanism (prélèvement à la source), with the employer withholding tax each month at a rate communicated by the French tax authorities. These withholdings are advance payments, and the final tax liability is determined upon filing of the annual income tax return. The CEHR and CDHR are not withheld and are paid directly by the individual when filing that return.

Employee and Employer Social Contributions

Employees and employers are subject to a range of social contributions levied on gross salary.

The main contributions notably include for the employee the generalised social contribution (contribution sociale généralisée) and the social debt repayment tax (contribution au remboursement de la dette sociale), levied respectively at rates of 9.2% and 0.5% on 98.25% of the gross remuneration. Other social contributions borne by both employees and employers primarily relate to retirement (basic and complementary pension schemes), unemployment insurance, health and disability coverage, work accident insurance and family benefits.

Overall, employee social contributions typically represent approximately 22% to 25% of gross remuneration. However, as certain contributions are capped, the effective employee contribution rate decreases for higher levels of remuneration and may fall to around 10.1% on income exceeding EUR385,000 (2026). It should also be noted that a portion of these contributions is deductible from the taxable income base for personal income tax purposes.

Employers bear a significant social security burden, with contributions typically representing approximately 40% to 45% of gross remuneration. However, as certain employer contributions are also capped, the effective rate may decrease to approximately 25% to 30% on remuneration exceeding EUR385,000 (2026).

Payroll Tax

Employers that are not subject to VAT, or that are subject to VAT on less than 90% of their turnover, are liable to payroll tax (taxe sur les salaires). This tax is calculated on total gross remuneration paid to employees and is levied at progressive rates:

• 4.25% on the portion of annual salary below EUR9,147;
• 8.50% on the portion between EUR9,147 and EUR18,259; and
• 13.60% on the portion above EUR18,259.

Banks and financial institutions are among the main taxpayers subject to payroll tax, given that a significant portion of their activity is VAT-exempt.

Direct Tax

Under French tax law, French resident companies are taxed on a domestic basis, whereas non-resident companies are only subject to corporate income tax (CIT) on profits attributable to France (eg, through a French permanent establishment, or in respect of French-source dividends, royalties, rental income and certain real estate or share-related capital gains).

A distinction is made between non-tax-transparent and tax-transparent companies.

Non-tax-transparent companies are personally liable for CIT, at a standard rate of 25%, increased to 25.825% (through a 3.3% surcharge) where CIT due exceeds EUR763,000. A temporary non-deductible CIT surcharge also applies to companies or tax-consolidated groups with French-source turnover of at least EUR1 billion (for FYs closed as from 31 December 2025) or EUR1.5 billion (for FYs closed as from 31 December 2026). It is calculated on the average CIT due for the relevant and preceding FY, at 20.6% (turnover EUR1–3 billion) or 41.2% (turnover above EUR3 billion), with a smoothing mechanism to mitigate threshold effects.

Tax-transparent companies are not personally liable for CIT; however, they are required to calculate a taxable income. Their shareholders are then liable to CIT or income tax on their share of taxable profits – including non-resident corporate shareholders.

Withholding Taxes

France imposes withholding taxes on certain payments to non-residents:

• dividends: 12.8% for non-resident individuals and 25% for non-resident companies;
• services rendered in France and paid to a foreign resident with no French presence: 25%;
• royalties: 25%; and
• profits deemed distributed by a French PE to its foreign head office: 25%.

Likewise, (i) French real estate capital gains, (ii) gains on shares in French real estate-oriented companies and (iii) gains on disposals of shares in French companies where the seller holds 25% or more of the share capital are subject to CIT at 25%. Interest payments to non-residents are not subject to withholding tax, unless paid in a non-cooperative jurisdiction.

These rates may be reduced or eliminated under applicable tax treaties or, for intra-EU flows, under the Parent-Subsidiary Directive (withholding tax exemption where the recipient holds at least 10% of the distributing company shares for a minimum of two years) and the Interest and Royalties Directive (withholding tax exemption where a direct shareholding of 25%+ exists between the paying and receiving entity, directly or through a common parent, for at least two years). These exemptions are subject to anti-abuse conditions and may be claimed upfront or a posteriori. Higher withholding tax rates apply for transactions with non-cooperative jurisdictions (see 5.7 Anti-Evasion Rules).

VAT

VAT is charged on the supply of goods and services at a standard rate of 20% (alternative rates of 10%, 5.5% or 2.1% may apply, depending on the nature of the transactions). VAT incurred for business purposes can be offset or refunded. VAT applies to both French and foreign companies doing business in France. Special rules govern cross-border transactions.

Transfer Tax

Transfer tax is applicable to certain asset transfers, with rates varying depending on the type of transaction:

• transfer of a stock company’s shares: 0.1% (intra-group exemption available);
• transfer of a non-stock company interest (part sociale): approximately 3% (intra-group exemption available);
• transfer of shares in a real estate-oriented company: 5%;
• transfer of a going concern, client base or assimilated assets: approximately 5%; and
• transfer of real estate assets: generally, between approximately 5.9% and 6.4% (with a 0.6% surtax for office, commercial and warehouse assets located in Île-de-France); lower rates may be available subject to conditions.

Transfer tax applies to transactions executed in France or involving assets located in France, irrespective of the tax residence of the parties.

Pillar Two Rules

France transposed into domestic law the Income Inclusion Rule (IIR) and the Qualified Domestic Minimum Top-up Tax (QDMTT), applicable from 1 January 2024, as well as the Undertaxed Payment Rule (UTPR), applicable from 1 January 2025, in order to ensure a global minimum effective tax rate of 15% for multinational groups with consolidated annual revenue of at least EUR750 million. France’s Pillar Two rules have been granted transitional qualified status on the OECD’s central record.

Other Taxes

French resident companies and French permanent establishments may also be subject to other taxes in France. Notable examples include business property tax, companies’ social security contribution, CVAE (Cotisation sur la Valeur Ajoutée des Entreprises – currently being phased out with full elimination scheduled for 2030), local property taxes and payroll tax (see 5.1 Taxes Applicable to Employees/Employers).

Several tax credits and incentives are available to French resident companies and French PEs:

• Tax losses: Tax losses can be carried forward indefinitely (up to EUR1 million plus 50% of the taxable profit per FY) or carried back one year (up to EUR1 million).
• Parent-subsidiary regime: A 95% exemption applies to dividends received by a French parent from eligible French or foreign subsidiaries, where it holds at least 5% of the share capital of the distributing entity for at least two years. This results in an effective rate of approximately 1.3% (further reduced within tax-consolidated groups – see 5.4 Tax Consolidation).
• Long-term capital gains regime: Capital gains on the disposal of qualifying equity participations (French or foreign) are effectively taxed at approximately 3.1%. Shares in real estate-oriented companies are excluded.
• R&D tax credit (crédit d’impôt recherche): Equal to 30% of eligible R&D expenses up to EUR100 million, and 5% above. Any excess credit is refunded after three years, or immediately for SMEs and newly created companies.
• Innovation tax credit (crédit d’impôt innovation): Available to SMEs at 20% of eligible expenses incurred for the design and prototyping of new products, capped at EUR400,000 per year.
• Young Innovative Enterprise (jeune entreprise innovante) regime: Open to SMEs incorporated for less than eight years, at least 50% owned by individuals or qualifying entities, and devoting at least 15% of their deductible expenses to R&D. Benefits include exemption from employer social contributions on qualifying R&D personnel, and potential property tax and Company Property Tax (Cotisation foncière des entreprises) exemptions for up to seven years.
• IP box regime: Optional 10% taxation on qualifying net income (nexus calculation) derived from the licensing, sublicensing or transfer of certain IP assets (mainly patents and copyrighted software).

Additional incentives may apply to specific investments and to investments made in specific geographic areas or in French overseas territories.

France’s tax consolidation regime allows eligible French groups to be taxed on a consolidated basis. To qualify, the group parent must hold, directly or indirectly, at least 95% of the share capital and voting rights of each member subsidiary. All group members must be subject to standard French CIT and share aligned FY opening and closing dates. Additionally, the parent must not itself be 95% held by another eligible French company. French subsidiaries held at 95% through an EU or EEA intermediary may also join the group under certain conditions (“Papillon” tax consolidation or horizontal consolidation).

Under this regime, the parent is solely liable for the group’s CIT, calculated on the aggregate of the taxable profits and losses of all group members. Key benefits include:

• consolidation of the members’ tax results, allowing losses of one member to be offset against the profits of another in the same FY;
• neutralisation of certain intra-group transactions, including capital gains on transfers of fixed assets (other than qualifying equity participations) and intra-group provisions;
• a 1% add-back rule on intra-group dividends eligible for the parent-subsidiary regime, in lieu of the standard 5% share of costs and expenses (subject to a one-year holding period); and
• carryforward or carryback of tax losses at group level.

Related-Party Interest Limitation

Interest paid to related companies (ie, companies that directly or indirectly control the borrower, are controlled by it, or are under common control) is deductible only up to a periodically published safe harbour rate or, if higher, the arm’s length rate.

Anti-Hybrid Rules

In line with the EU Anti-Tax Avoidance Directive (ATAD 2), anti-hybrid rules neutralise mismatch arrangements, ie, payments that are deductible in one jurisdiction but not taxed in another.

General Interest Deduction Limitation Rule (EBITDA Cap)

In line with the EU Anti-Tax Avoidance Directive (ATAD 1), a taxpayer’s net financing charges for a given FY are deductible only up to 30% of tax-adjusted EBITDA or EUR3 million, whichever is higher. The same thresholds apply to tax-consolidated groups but are calculated and assessed on a consolidated basis (net financial expenses being likewise determined at group level).

Where a company or group is thinly capitalised (ie, average related-party debt exceeds 1.5 times accounting net equity), these thresholds are reduced to 10% of tax EBITDA and EUR1 million. A safe harbour may allow a taxpayer belonging to an accounting consolidated group to claim an additional deduction equal to 75% of the net financial expenses disallowed under the 30% cap.

Disallowed net financing charges may be carried forward indefinitely, while unused deduction capacity (where the threshold exceeds the net financial expenses) may be carried forward for up to five FYs.

Consolidated Tax Group Specific Limitation

Within a tax-consolidated group, interest on debt incurred to acquire shares in a company from a related party, where that acquired company is part of, or subsequently joins, the group, is partially non-deductible over a period of eight FYs following the acquisition (the “amendement Charasse”).

Legal Framework

France has comprehensive transfer pricing (TP) rules requiring transactions between affiliated enterprises to comply with the arm’s length principle, allowing the French tax authorities to adjust taxable income accordingly. Companies must maintain documentation demonstrating such compliance.

Documentation Requirements

In line with OECD BEPS Action 13, France applies tiered TP documentation obligations based on size thresholds. French entities (companies or PEs of foreign companies) with revenue or gross assets of at least EUR150 million – as well as their French affiliates (parent, subsidiary or member of the same French tax consolidated group) – must prepare a full master file and local file, to be provided upon request during a tax audit. The same entities must also file an annual TP form within six months of their corporate income tax return, the threshold being lowered to EUR50 million for this purpose.

Country-by-Country Reporting

French-headquartered multinational enterprise (MNE) groups with consolidated annual turnover of at least EUR750 million must file a country-by-country report (CbCR) within 12 months of the end of the relevant FY. French entities belonging to a foreign-headquartered MNE meeting the same threshold may also be required to file, where the CbCR is not filed in a jurisdiction having an information exchange agreement with France.

Advance Pricing Agreements and Dispute Resolution

Companies may secure their TP positions through unilateral, bilateral or multilateral Advance Pricing Agreements. France participates in the OECD’s mutual agreement procedure (MAP) and the EU Arbitration Convention and is a signatory to the OECD Multilateral Instrument (MLI), which strengthens dispute resolution mechanisms – including mandatory binding arbitration – across France’s bilateral tax treaties.

General Anti-Abuse and Evasion Rules

French tax law includes a range of general anti-avoidance measures targeting artificial or tax-driven arrangements. Under the abuse of law (abus de droit) doctrine, the French tax authorities may disregard transactions that are fictitious or exclusively motivated by the circumvention of tax legislation, with penalties of up to 80%. The “mini” abuse of law rule, applicable to acts carried out from 1 January 2020 onwards, extends this approach to arrangements whose main – rather than exclusive – purpose is to avoid or reduce tax.

Certain preferential tax regimes are subject to specific anti-abuse rules targeting fraudulent schemes and absence of substance (eg, the parent-subsidiary regime specific anti-abuse rule). Flows involving residents of non-cooperative jurisdictions are generally subject to a 75% withholding tax rate (notably on interest payments, capital gains, fees and dividends) and denied tax deductibility or exclusion from certain tax regimes.

Finally, treaty benefits may be denied where obtaining them was one of the main purposes of an arrangement or where the recipient is not the beneficial owner of the income.

CFC Rules

French controlled foreign corporation (CFC) rules apply to profits of foreign branches and subsidiaries that are more than 50% owned and established in tax-privileged jurisdictions, ie, where the local CIT payable is less than 60% of the French theoretical tax (a difference of more than 40%). Such profits are subject to CIT in France in proportion to the French resident company’s shareholding. Within the EU, a safe harbour limits the application of the CFC rules to purely artificial arrangements aimed at circumventing French tax legislation.

Mandatory Disclosure Rules (DAC6)

France has transposed the EU Directive on mandatory disclosure of cross-border tax arrangements (DAC6). Intermediaries (and, in certain circumstances, taxpayers) must report cross-border arrangements meeting one or more prescribed hallmarks to the French tax authorities within 30 days of the relevant trigger event. The reported information is automatically exchanged with the tax authorities of other Member States.

In France, customs tariffs are set at EU level by the Council on a proposal from the European Commission (EC). The level of duty depends on three factors: the product classification; its origin; and the possible application of trade agreements, quotas or restrictions.

Customs duties are calculated on the value of the product, and the applicable rate is set out in the Integrated Tariff of the European Union (TARIC). In principle, that rate is the same regardless of the product’s origin. However, exceptions may arise from free trade agreements, tariff quotas, preferential origin regimes or trade defence measures.

Transactions that constitute a concentration and meet the French thresholds must be notified to the FCA prior to their implementation.

Types of Transactions Covered

A concentration occurs under either of the following circumstances:

• two or more independent undertakings merge; or
• one or more persons or undertakings already controlling at least one undertaking acquire control of the whole or parts of one or more other undertakings.

Following a concentration, an undertaking may exercise decisive influence alone, in which case it will be deemed to have exclusive control. An undertaking may also exercise decisive influence jointly with another undertaking(s), in which case they will together be deemed to have joint control. Joint control over an undertaking arises from either parity in the voting rights or the ability for a minority shareholder to block certain strategic decisions (such as the adoption of the budget or business plan or the appointment of top management).

Creating a joint venture that performs all the functions of an autonomous economic entity on a lasting basis also constitutes a concentration.

Thresholds

Concentrations must be notified to the FCA when the following three thresholds are cumulatively met:

• the combined worldwide turnover exceeds EUR150 million;
• the domestic turnover of each of at least two parties exceeds EUR50 million; and
• the transaction does not fall within the jurisdiction of the EC.

Law No. 2026-403 of 26 May 2026 on the simplification of economic life will raise the French merger control notification thresholds for the first time since 2004. As from 1 September 2026, transactions must be notified to the FCA when:

• the combined worldwide turnover exceeds EUR250 million;
• the domestic turnover of each of at least two parties exceeds EUR80 million; and
• the transaction does not fall within the jurisdiction of the EC.

Furthermore, the specific thresholds applicable to the retail sector have also been increased by Law No. 2026-403, while those applicable to French overseas territories remain unchanged. The reform is expected to reduce the annual number of notifiable transactions by 20–30%, mainly in the retail sector.

Exemptions

There are no exemptions under French merger control rules. Filing is mandatory whenever the thresholds are met. However, a simplified procedure is available in certain unproblematic cases, such as the constitution of an offshore joint venture or a concentration leading to no horizontal overlaps or vertical links.

Review of Concentrations Under Thresholds

In line with the ECJ’s TowerCast judgment of 16 March 2023 (C-449/21), the FCA can conduct sub-threshold reviews of concentrations that may lead to an abuse of dominant position prohibited by Article 102 of the Treaty on the Functioning of the European Union (TFEU) or constitute an anti-competitive agreement under Article 101 of the TFEU.

In addition, following the ECJ’s decision in the Illumina/Grail matter, the FCA is pushing for a legal reform that would lead to the introduction of a call-in power, enabling the FCA to review transactions in strategic sectors that fall below the legal thresholds, particularly within the technology and healthcare industries.

Criteria for Antitrust/Competition Review

The extent of the competitive assessment by the FCA will largely depend on the impact of the concentration on the market. Concentrations that are eligible for a simplified procedure (eg, operations that are unlikely to cause any harm to competition) will require significantly less information than standard filings.

In standard filings, the parties are expected to provide market share and competitor information and describe the competitive environment in which the new entity will compete post-concentration, including the existence of barriers to entry, the existence of countervailing buyer power, the potential entry of new players, and the existence of spare capacity.

The notification process is divided into the following three phases:

• Pre-notification phase: Pre-notification is not mandatory but is encouraged for cases that may raise concerns (eg, preliminary questions on controllability or if it is anticipated that the transaction will give rise to competition issues). The pre-notification phase takes about one to two weeks and can be longer for complex cases. The FCA indicates in its guidelines that a notification that has undergone an effective pre-notification phase is generally declared complete on the day on which it is submitted. Transactions eligible for the simplified procedure are notified directly, without pre-notification.
• Phase I: This phase takes about 25 workings days. If commitments are offered, this phase can be extended by a further 15 working days, and an additional 15 working days may be granted at the request of the parties. Following a Phase I review, the FCA can authorise the concentration (either unconditionally or subject to remedies) or, if serious doubts remain as regards anti-competitive effects, initiate an in-depth examination known as Phase II.
• Phase II (for complex cases only where an in-depth analysis is necessary): Phase II takes about another 65 workings days. If commitments or amendments to commitments are submitted less than 20 days before the decision deadline, the review period may be extended by 20 working days, up to a maximum of 85 working days. The parties may request a further extension of 20 working days.

Following a Phase II decision, the Minister of the Economy may call in the case to review the concentration on grounds other than that of maintaining competition, such as general interest, industrial development and employment concerns.

Suspensory Filing

Filing is suspensory. Therefore, the transaction cannot be implemented prior to the FCA’s clearance.

The FCA can impose a fine of up to 5% of the entity’s French turnover for failure to notify or for early implementation. In the event of failure to notify operations, the party responsible for notification must resubmit the notification.

Article L. 420-1 of the FCC prohibits agreements and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in a market. It is the national equivalent to Article 101 of the TFEU.

In particular, such practice is prohibited where it (i) limits access to the market or the free exercise of competition by other undertakings, (ii) impedes the determination of prices by the free play of market forces by artificially encouraging the increase or reduction of prices, (iii) limits or controls production, markets, investment or technical development, or (iv) shares markets or sources of supply.

French competition law applies concurrently with EU competition law. In practice, the FCA, which is empowered to apply EU competition law, enforces national provisions in line with the decisional practice of the EC and the case law of the EU courts, reflecting the principles of effectiveness and the direct applicability of EU law within the national legal order.

The FCA has jurisdiction where it can be established that there is a sufficiently close connection between the alleged infringement and the French territory. Such a close connection will be established where the following cumulative conditions are met:

• the practice produces direct, substantial, actual or foreseeable effects in France, or is implemented or originates there;
• the FCA is in a position to bring the entire infringement effectively to an end; and
• the FCA is able to gather, potentially with the assistance of other authorities, the evidence required to establish the infringement.

The FCA may impose fines of up to 10% of the highest worldwide turnover, excluding VAT, achieved by the undertaking concerned in any of the years during which the anti-competitive conduct took place.

Article L. 420-2 of the FCC prohibits the abuse by an undertaking or a group of undertakings of its dominant position in the domestic market, in line with Article 102 of the TFEU. The demonstration of such an anti-competitive practice requires, as a preliminary condition, establishing that the undertaking concerned, or the group of undertakings, holds a dominant position in the market. Secondly, the abuse of such position is prohibited by French competition law, which may, in particular, consist in refusals to deal, tying practices or discriminatory conditions of sale.

The interplay between French and EU competition law described above equally applies here: the FCA, empowered to enforce both sets of rules, ensures a consistent approach with the EC’s decisional practice and EU case law, in line with the principles of effectiveness and direct applicability of EU law.

French competition law also recognises a standalone practice of abuse of economic dependence, which does not exist under EU law. Such a practice is established where the following cumulative conditions are met:

• the existence of a situation of economic dependence, assessed in concreto on the basis of factual elements (ie, an undertaking must be unable, within a reasonable period of time, to obtain a technically and economically equivalent alternative to the contractual relationships concerned);
• an abuse of that situation of economic dependence – eg, through the imposition of unfair trading conditions; and
• an effect on the functioning or the structure of competition.

As set out above in relation to cartels, the FCA’s jurisdiction over abuse of dominance cases is triggered where a sufficiently close connection with French territory can be established, based on the same cumulative criteria (effects, implementation or origin in France; ability to bring the infringement to an end; and ability to gather the required evidence).

The same sanctioning framework also applies, with fines of up to 10% of the highest worldwide turnover (excluding VAT) achieved by the undertaking concerned during any year in which the infringement took place.

Definition

A patent protects a technical invention (eg, a product, a process or a device), provided that it is new, involves an inventive step and is capable of industrial application. Discoveries, scientific theories, mathematical methods, aesthetic creations, business methods and computer programs “as such” are excluded from patentability.

Length of Protection

A French patent is protected on the French territory for 20 years from the filing date, subject to the regular payment of annuities. Supplementary protection certificates may extend protection for certain medicinal and plant protection products.

Registration Process

A French patent application is filed with the French National Industrial Property Institute (Institut national de la propriété industrielle, or INPI). The invention must be described in the patent application in a manner that is sufficiently clear and complete to enable a person skilled in the art to carry it out. The application is examined for formal requirements and patentability. A search report is drawn up, and the application is generally published 18 months after filing. Protection may also be obtained in France through a European patent filed with the European Patent Office, with or without unitary effect where applicable.

Enforcement and Remedies

The claims define the scope of the protection. Patent owners may bring civil infringement proceedings before the competent specialised judicial courts and may seek preliminary or permanent injunctions, seizure of evidence (saisie-contrefaçon), damages, recall or destruction of infringing goods, and publication of the judgment. Certain acts of patent infringement may also give rise to criminal liability, and customs measures may be available.

Definition

A trade mark is a sign used in the course of trade to distinguish the goods or services of one undertaking from those of others. It may consist, in particular, of words, names, logos, letters, numerals, colours, shapes, sounds or other signs, provided that it can be represented in the register in a manner enabling the competent authorities and the public to determine the clear and precise subject matter of protection. To be eligible for trade mark protection and ensure the function of guarantee of origin, the sign must also be distinctive (ie, it must be unrelated to the goods and services for which the protection is sought) and not be generic, descriptive, or common in relation to the goods or services in question. Moreover, the sign must also be lawful, non-deceptive and available (ie, distinct from prior third-party rights).

Length of Protection

A French trade mark registration is valid for ten years from the filing date and may be renewed indefinitely for further ten-year periods, subject to renewal formalities and payment of fees.

A trade mark may be revoked, notably for non-use in case the mark has not been genuinely used for an uninterrupted period of five years or in case the sign has become the common commercial designation of the product or service at stake.

Registration Process

A French trade mark application is filed with the INPI, specifying the sign and the goods and services, according to the Nice Classification, for which the protection is sought. The INPI examines absolute grounds for refusal and publishes the application, and third parties may file observations or oppositions based on earlier rights. If no refusal or successful opposition is raised, the mark is registered.

Protection in the French territory may also be obtained through an EU trade mark filed with the EUIPO, or through an international registration designating France or the EU under the Madrid system and filed with the WIPO.

Enforcement and Remedies

The trade mark owner may prohibit unauthorised use of identical or similar signs for identical or similar goods or services provided that there is a use in the course of trade and such use is likely to generate likelihood of confusion in the public’s mind.

The trade mark owner may also rely on enhanced protection for marks with a reputation allowing the owner to claim protection beyond the goods and services for which the trade mark is registered, provided that certain conditions are met.

The trade mark owner may seek injunctions, damages, seizure of evidence (saisie-contrefaçon), recall or destruction of infringing goods, and publication of the judgment. Customs measures and criminal sanctions may also be available.

Definition

A design protects the appearance of the whole or part of a product resulting, in particular, from the features of lines, contours, colours, shape, texture or materials of the product or its ornamentation. To be protected as a registered design, it must be new and have individual character.

Length of Protection

A French registered design is protected for an initial period of five years from filing and may be renewed in five-year periods up to a maximum of 25 years. At EU level, an unregistered design is protected for three years from the date on which it was first made available to the public within the EU.

Registration Process

A French design application is filed with the INPI and must identify the applicant, the product indication and reproductions of the design. The INPI conducts a formal examination and publishes the registration, subject to possible deferment of publication.

Protection may also be obtained by filing an EU registered design with the EUIPO or through an international design registration under the Hague system with the WIPO.

Enforcement and Remedies

A design owner may bring infringement proceedings against unauthorised making, offering, placing on the market, importing, exporting, using or stocking of products incorporating the protected design.

Available remedies include injunctions, seizure of evidence (saisie-contrefaçon), damages, recall or destruction of infringing goods, and publication of the decision. Customs measures and criminal sanctions may also be available in appropriate cases.

Definition

Copyright protects original works of the mind, whatever their genre, form of expression, merit or purpose, including literary, artistic, musical, audiovisual, graphic and software works. Provided that it is original (ie, it bears the author’s footprint) and expressed in a form (ie, ideas and concepts are not eligible for copyright protection), the work is protected from the date of its creation.

Length of Protection

Economic rights last for the life of the author plus 70 years after death. Moral rights (eg, right of paternity, right of integrity) are perpetual, inalienable and imprescriptible under French law. Specific rules apply to collaborative works, collective works, audiovisual works, posthumous works and related rights.

Registration Process

There is no copyright registration in France. Rights arise automatically from creation. In practice, authors or right holders may use evidence-preservation tools, such as deposits with a bailiff/commissioner of justice, the INPI e-Soleau envelope or trusted timestamping, to evidence the date and content of a work, but these are not constitutive of rights.

Enforcement and Remedies

Copyright owners may act against unauthorised reproduction, representation or adaptation of their works and/or in case of infringement of their moral rights. Remedies include injunctions, seizure of evidence, damages, withdrawal, recall or destruction of infringing copies, publication of the judgment, and criminal sanctions in appropriate cases.

Software

Computer programs are protected by copyright as literary works, provided that they are original. Protection notably covers the source code, object code and preparatory design material, but not the ideas or principles underlying the program. In France, the economic rights in software created by employees in the performance of their duties are, unless otherwise agreed, vested in the employer.

Databases

Databases may benefit from copyright protection where the selection or arrangement of their contents is original. In addition, the database producer may benefit from a sui generis right where there has been a substantial investment in obtaining, verifying or presenting the contents. The sui generis right generally lasts 15 years from completion or from the database being made available to the public, subject to renewal where a substantial new investment is made.

Trade Secrets and Know-How

Trade secrets are protected where information is not generally known or readily accessible, has commercial value because it is secret, and has been subject to reasonable protective measures by its lawful holder. Protection does not require registration and lasts as long as these conditions remain satisfied.

France’s data protection framework is primarily based on the EU General Data Protection Regulation (GDPR), which applies directly across all Member States and has extraterritorial scope. The GDPR sets out the core principles governing the processing of personal data, including lawfulness, transparency, purpose limitation, data minimisation and security, as well as detailed obligations for controllers and processors.

This framework is complemented at national level by the French Data Protection Act (Loi informatique et libertés), as amended, which supplements the GDPR in areas where Member States retain flexibility (eg, certain processing conditions, enforcement procedures, and specific rules for public sector or sensitive data processing).

Together, these instruments establish a comprehensive regime governing the collection, use, storage and transfer of personal data. They apply not only to entities established in France, but also to foreign organisations that target individuals in the EU or monitor their behaviour.

In line with the GDPR, non-compliance may result in significant administrative fines, which can reach up to 4% of a company’s global annual turnover, depending on the severity of the infringement.

EU and French data protection rules have a broad extraterritorial reach, meaning they can apply to foreign companies even if they have no physical presence in France or the EU.

Under the GDPR, these rules apply to any organisation that offers goods or services to individuals located in the EU, whether or not payment is required, or that monitors the behaviour of individuals within the EU – eg, through tracking or profiling techniques. As a result, a foreign company targeting customers in France – eg, through a website in French, pricing in euros or marketing campaigns directed at EU residents – will typically be subject to the GDPR and, where relevant, to certain provisions of French law.

In practice, this means that such companies must comply with the core requirements of the GDPR, including having a valid legal basis for processing personal data, providing clear and transparent information to individuals, implementing appropriate security measures, respecting data subject rights and complying with the rules governing international data transfers.

In addition, where they are not established in the EU, foreign companies may be required to appoint an EU representative and will need to engage with European supervisory authorities.

Overall, this extraterritorial framework ensures that foreign and EU-based companies are subject to equivalent data protection standards when they target individuals in France or elsewhere in the EU.

In France, the authority responsible for enforcing data protection rules is the National Commission on Informatics and Liberty (Commission nationale de l’informatique et des libertés, or CNIL).

The CNIL is an independent administrative authority tasked with ensuring the proper application of the GDPR and the French Data Protection Act. Its role is both regulatory and supervisory. On the one hand, it issues guidance, recommendations and practical tools to help organisations understand and comply with their obligations. On the other, it monitors compliance through audits and investigations, which may be carried out on-site, remotely, or on the basis of documentary evidence.

The CNIL also has significant corrective and enforcement powers. It may issue warnings or formal notices, order organisations to bring processing operations into compliance, restrict or suspend certain data processing activities, and impose administrative fines. In line with the GDPR, these fines can reach up to EUR20 million or 4% of the undertaking’s global annual turnover, whichever is higher, depending on the seriousness of the infringement.

In a cross-border context, the CNIL co-operates with other EU data protection authorities within the framework established by the GDPR, in particular through the “one-stop shop” mechanism, whereby a lead supervisory authority co-ordinates decisions concerning organisations operating in several Member States.

Overall, the CNIL plays a central role in both guiding organisations and enforcing compliance, ensuring the consistent and effective application of data protection rules in France and across the EU.

Several legislative developments are expected to influence the French legal and tax landscape in the short to medium term:

• Finance Bill for 2027: The Finance Bill for 2027 (Loi de finances pour 2027) is expected to be presented to Parliament in the autumn of 2026 and adopted by the end of the year. It is, at this stage, too early to anticipate the content of the measures that will be included, although this bill should be influenced by the sustained pressure on French public finances and the government’s commitment to a credible deficit consolidation path. This bill will be the last finance bill before the 2027 presidential elections.
• EU AI Act: Key obligations applicable to high-risk AI systems, originally scheduled to enter into force on 2 August 2026, are now expected to be deferred to late 2027 under the EU’s Digital Omnibus simplification package.
• EU FDI Screening Regulation: Formally adopted by the Council on 8 June 2026, the revised regulation will need to be implemented by Member States within 18 months, with expected application in January 2028.
• Pay transparency: The draft bill transposing EU Directive 2023/970 of 10 May 2023 is currently before the French Parliament and will replace the existing gender equality index with seven new indicators applicable to employers with 50 or more employees.
• Merger control: Following the ECJ’s Illumina/Grail decision, the FCA is considering adopting new guidelines introducing a call-in power, enabling it to review below-threshold transactions in strategic sectors such as technology and healthcare.