Recruiting an employee in France is an excellent opportunity to grow your business in the French market. However, before signing an employment contract, it is essential to choose the type of contract best suited to your needs and to comply with French regulations.
For foreign companies recruiting without an established entity in France, this choice is all the more important: the employment contract must comply with the French Labour Code, the applicable collective bargaining agreements, and French social security obligations.
Discover the main types of employment contracts in France and the criteria for choosing the one that best fits your recruitment plans.
Company without an establishment in France: what does this mean?
A foreign company may wish to recruit an employee who will habitually work from France, without thereby creating a French branch, subsidiary or establishment.
However, not having an establishment in France does not mean being exempt from all obligations in France. The employer remains, legally speaking, a foreign company, but must complete certain formalities relating to the hiring of an employee, in particular the declaration and payment of social security contributions in France.
This arrangement can nonetheless be a particularly attractive option for a foreign company wishing to:
- recruit an employee based in France;
- prepare a commercial or operational presence on the French market;
- start an activity without immediately creating a French legal entity;
- limit the costs and time involved in setting up a subsidiary;
- retain the management and legal structure of the company in its home country.
First challenge: understanding French administrative formalities
Hiring an employee in France involves several steps, even for a company based abroad.
The company must, in particular, register with URSSAF (the French body responsible for collecting social security and family allowance contributions) and complete the formalities relating to the hire. The DPAE (pre-employment declaration) is one of the mandatory formalities.
For a foreign company that does not wish to immediately set up a structure in France, this type of arrangement can therefore considerably reduce administrative complexity.
Second challenge: applying French labour law
When an employee habitually works in France, they are subject to French labour law. Their employment contract and working conditions must therefore comply with French legislation, in particular with regard to working hours, leave, minimum pay, the probationary period, termination of the contract, employee protection, and health and safety at work.
Most provisions of labour law are codified in the French Labour Code, but certain rules are governed by collective bargaining agreements (texts negotiated between employers and employees setting out the rules applicable to a given sector of activity).
It quickly becomes difficult for a company without a lawyer specialising in French labour law on hand to find its way around.
Third challenge: managing contributions and social protection
When an employee falls under the French social security system, the foreign company must declare and pay social security contributions in France.
The employer must therefore be able to properly manage:
- employer and employee contributions;
- social security declarations;
- the employee’s social protection;
- French payroll;
- obligations relating to occupational health;
- any situations involving international mobility.
This management can quickly become complex for a company with no administrative team in France.
Why is local support often decisive?
For a foreign company, the main obstacle is not necessarily the existence of each of these obligations taken individually. It is their combination.
An error in the contract or an incorrect declaration can lead to financial or even criminal penalties.
This is why the support of a partner with expertise in the administrative, social, legal and operational challenges of the French market can be particularly useful. The foreign company thus retains its registered office, legal personality and international organisation, while benefiting from a local partner capable of managing the specific features of the French market.
Please do not hesitate to contact us to benefit from specialised support for hiring employees in France under ESEF status!