Buying a business in France

The process of buying a business in France

While a notary plays the main role in the sales process when buying residential real estate in France, in the field of business acquisition, a lawyer (avocat) becomes the main protagonist.

Of course, a notary can also support a business purchase transaction, but I advise you to choose a lawyer specifically.

When buying a business both in France and Monaco, the transaction does not necessarily have to be registered with a notary, and a lawyer is more prepared for non-standard situations, disputed issues, and generally has more experience, as the French turn to lawyers to support business purchase and sale transactions.

Since lawyers in France specialize in particular fields, it is better to choose a lawyer who has experience in supporting the purchase of your specific type of business.

The same applies to real estate agents. Most agents in France specialize in residential property, while commercial real estate is handled by an agent who, as a rule, does not deal with residential property. 

But again, in my experience, commercial real estate specialists offer what is in their portfolio and are not always ready to show ingenuity and creativity to find the right premises or the right business for your needs.

Another important person when buying commercial real estate can be your accountant, who will help you understand financial documents and explain taxation issues. 

Creating a new company or buying an existing one?

When buying an established business in France, you have two ways to acquire it:

1. You create a new company and buy the business through it.

2. You buy the shares of an existing company along with the business.

Which method you choose will be decided together with your lawyer depending on your priorities. 

When buying shares of an existing company, you can save on registration costs, but the sales process itself is more complex for both parties since you are buying both liabilities and assets, and you need to be certain there are no debts on the company. 

Also, along with the company, all obligations under current contracts and personnel transfer to the buyer.

This method of acquisition may be interesting if, for example, franchise agreements transfer with the company, as well as a corporate bank account, which is very difficult to open today for non-residents of France from Russia, Ukraine, or Kazakhstan.

In both cases, you need to change the company manager. When creating a new company, I advise appointing a temporary manager who is a French resident to quickly obtain all permits. Later, you can change the manager. 

If your company manager in France is not an EU resident, you must request permission. In Monaco, in any case, permits are required to manage a company if you are not a Monaco resident. 

Monegasque law is based on French law, and in general, buying a business in Monaco goes through the same stages as a transaction in France.  But in my view, all issues in Monaco are resolved faster.

Starting a new business in France

In France, you can also buy the "leasehold right" (droit au bail) to a premises without the business. 

In this case, the new tenant will be able to engage in a different type of activity if it is provided for by the lease agreement, or coordinate permission with the owner for a new type of activity.