That’s a sentence that I have never said before in my life. Which is ironic, since I am a lawyer. We considered buying a restaurant in the U.S. and I got as far as drafting the agreement for the sale before we pulled out for a number of reasons. I specialize in contracts, so there’s no part of this type of transaction that I don’t feel comfortable with. I can read financial statements, understand business taxes, negotiate a deal. That’s in America. But what if you changed the underlying law and legal requirements (and add the layer of EU regulations), the tax structure, the accounting conventions, the business norms and customs, and then put it all in French, a language you don’t understand?
A man who is his own lawyer has a fool for a client.
— Fortune Cookie
So I knew that there would be a point at which I would need help, but I managed to get pretty far in the process before I conceded. I learned the business vocabulary to read financial statements and taxes in French (bilan=balance sheet; comptes annuelles=income statement), and sorted out the French accounting conventions around calculating net revenue before taxes. I learned about business practices unique to Europe like the espresso machine may not be owned by the restaurant but rather owned by a coffee distributor and attached to a supply contract; even worse is a beer contract. I learned a lot about French labor law. What scares me of course is not knowing what I don’t know, a nagging doubt that was never there before doing business in America.
Who could have guessed that the insurmountable wall would be opening a bank account? Fortunately, France has business forms analogous to what we have in the U.S. (we’ve chosen a SARL, or Societe a Responsibilite Limitee, skipping the accents, which is a multi-partner limited liability company). The actual filing process to accomplish corporate formation is where things really start to diverge. Based on exhaustive and exhausting research, a SARL cannot be formed and its status recorded with the government until the corporation has a French bank account. Earlier in this process I had assumed that it would be possible to wire in money to complete the transaction, but alas, the bank account is fundamental and indispensable to the process. Even a government-published guide warns the incoming investor not to underestimate the difficulty and length of the process to open a french corporate bank account. I think you can begin to see how strong the bank lobby is in France.
We did a bit of research into banks that operate in the area and decided on the Banque de Savoie (Savoie being the name of the French Departement, equivalent to a state), which advertised that it specialized in tourist-oriented commercial enterprises, which fits our description. We got around to this on Tuesday of last week (the six-hour time difference leaves a narrow window in our morning to make phone calls overseas and catch people before they leave for the day, in their 35 hour work week), and discovered that the branch at our location is only open on Mondays and Fridays. (!) By Friday, I had done enough reading to suspect that we are going to have to go back. Strict anti-money laundering EU regulations mean that bank counselors are supposed to meet with every prospective client personally for questioning, including all corporate directors. My optimistic husband (who is thankfully fluent in French) called anyway to ask about the possibility of doing this remotely, and as you know from the last post, the answer was — predictably — “C’est impossible.”
The list of things we have to produce for opening the account, which the counselor described as “simple”: SARL formation document (which was expected), list of directors (okay, prepared for that), passports of all directors (no problem), KBIS (now this is what you get from the government acknowledging registration of your company, which can only happen AFTER you have the bank account), Fiche INSEE (proof of registration of the company, which again you can only get from the government after you have a bank account and register the corporation), most recent bilan (we don’t have a balance sheet yet, because, you know, we need to open the bank account to form the corporation first in order to transfer assets to it), proof of residence in France for at least the last two months (obviously problematic), and proof of revenue for all of the directors (hopefully assets will do in lieu of income since we’re unemployed at the moment — this is the whole point of buying a restaurant).
The only comfort that I have in this is the knowledge that people buy businesses and move to France all the time. Maybe not Americans, but hordes of Brits do it, at least they did before Brexit. We are not the first people to do this, so it must be possible. Hopefully our new lawyer will know how.
Copyright 2018, Rachel Howard