Are you a foreign company wishing to recruit your first employee in France?
Employment contract, French employment law, social protection, social security declarations, payroll, withholding of income tax at source… a number of formalities need to be anticipated.
Below are the main steps you need to know in order to hire your first employee in France.
Is it possible to hire in France without setting up a French company?
Yes, subject to certain conditions.
A foreign company that has no establishment in France may directly employ one or more employees in France.
In that case, the company remains legally established in its home country, while assuming its obligations as an employer in France.
This is commonly referred to as the status of a company with no establishment in France (entreprise sans établissement en France, ESEF).
Why choose this solution?
For a first hire, ESEF status can be particularly advantageous for a company wishing to:
- recruit a member of staff in France quickly;
- test the French market before setting up a local entity;
- avoid the costs of setting up and running a subsidiary;
- prepare a commercial or operational presence in France;
- benefit from a suitable solution where a legal presence is not yet necessary.
Step one: Registering with Urssaf as a foreign company
Une entreprise étrangère qui n’a pas d’établissement en France, mais qui emploie un salarié en France, doit effectuer des déclarations et payer des cotisations sociales en France.
Pour cela, elle peut s’adresser au service Firmes Étrangères de l’Urssaf, qui constitue le point d’entrée pour les entreprises étrangères concernées. L’entreprise doit notamment communiquer les informations nécessaires à son identification et à celle de son salarié.
Step two: Completing the hiring formalities
As with any recruitment in France, the employer must comply with the mandatory formalities associated with hiring.
Depending on the arrangement chosen, this may include in particular:
- the pre-employment declaration (déclaration préalable à l’embauche, DPAE);
- the steps relating to the registration of the employee;
- social security declarations;
- enrolment in the mandatory schemes;
- the setting up of payroll;
- the obligations relating to occupational health services;
- salary-related tax declarations.
Where the employee works in France and falls under the French system, a significant part of the administration of their employment must be organised in accordance with French rules.
Step three: Setting up French payroll
One of the main challenges for a foreign company is managing French payroll correctly.
Payroll must be processed in accordance with the applicable French rules, in particular with regard to:
- social security contributions;
- paid leave;
- social protection;
- benefits in kind;
- withholding of income tax at source;
- any applicable collective bargaining agreement;
- minimum remuneration.
The employer must also file the necessary declarations.
In practice, having a point of contact specialising in French payroll is often the simplest way to avoid mistakes when hiring for the first time.
Step four: Complying with French obligations as an employer
Even without a French legal entity, the foreign company becomes an employer in its own right vis-à-vis its employee in France.
It must therefore put in place an organisation that makes it possible, in particular, to manage:
- leave and absences;
- sick leave;
- health and safety at work;
- the obligations relating to occupational health services;
- pay rises and contractual changes;
- employee benefits;
- any disciplinary procedures;
- termination of the employment contract.
Is it possible to obtain support for your first recruitment in France ?
Yes, and this is often the simplest solution for a foreign company that is not yet familiar with the specific features of the French system.
Specialist support can cover all or part of the process:
- Analysis of the foreign company’s situation;
- Verification of the ESEF framework;
- Analysis of the future employee’s status;
- Preparation of the employment contract;
- Management of formalities with Urssaf;
- Setting up of payroll;
- Management of social security declarations;
- HR and administrative support;
- Monitoring of the employee throughout the term of their contract.
The benefit is that the foreign company is able to concentrate on its business and its recruitment.
Do you wish to recruit your first employee in France without setting up a subsidiary?
Our team supports foreign companies with their hiring, payroll and administrative management procedures in France under the status of a company with no establishment in France (ESEF). Please do not hesitate to contact us to tell us about your project.