Starting a business : how to proceed – Invest in Tahiti
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Starting a business: How to proceed
Creating a business in French Polynesia is a fast, easy process similar to what is done in Metropolitan France, using the same structures (EURL, SARL, SA …).
Once the economic model, legal form and capital is determined, here are the following points to be accomplished in the following order:
Incorporating the business, as a legal entity, and writing the articles of incorporation;
Having the business’ articles of incorporation registered with the Land Affairs Department (DAF) – Registration Department (in Papeete);
Publishing a notice of incorporation in a legal notice newspaper;
Registering with the Business Development and Registration Center (CDFE) of the Chamber of Commerce, Services and Trades (CCISM);
Creating an individual business is also very easy. All that is required is declaring the creation of an activity to the CCISM and prove one’s identity.
Partners are at your disposal to guide you in the process. The CCISM’s CDFE is the starting point and prerequisite for setting up any business.
1. UPON CREATION: FORMALITIES
The CDFE’s purpose is to facilitate the setting up of a business and simplify declarations that business heads are required to make under laws and regulations, in the legal, administrative, social, fiscal and statistical areas, by bringing them together in one place and in one document.
Going through the CDFE is mandatory as regards any and all declarations such as creation, modification, deregistration of a business … The CDFE accompanies businesses in all formalities of registration with various bodies. Such formalities must be completed at least a month before the activity has started and a month after the activity has begun at the latest. Information and documents gathered by the CDFE are then passed on to the various relevant bodies: Registry of the Corporate Register (RCS), Statistical Institute of French Polynesia (ISPF), Taxation Department (DICP), “Caisse de Prévoyance sociale” (CPS) (Social welfare fund) …
THE STEPS REQUIRED TO SET UP A COMPANY ARE AS FOLLOWS:
1°) Preparatory visit to the Business Development and Registration Center (CDFE) in order to obtain the list of the main supporting documents to be produced when registering the company.
Chambre de commerce, d’industrie, des services et des métiers (CCISM) – CDFE
2°) Drafting of the company’s articles of incorporation under a private deed, with accompaniment by the CCISM (the Chamber has model articles of incorporation, according to the legal form), or a legalized deed.
3°) Payment of contributions in cash and depositing of funds on an escrow account, with a bank or a notary. Such an account is called “account of company under formation” or “STFO”, and remains frozen until the company is registered with the Corporate Register, or upon the issue of the Certificate of registration with the Corporate Register (Kbis extract).
4°) Signing of the articles of incorporation: all partners are required to adopt the company’s articles of incorporation. This includes five original copies plus a number of certified copies for partners, banks, etc. Each partner will initial each page of every copy of the original articles of incorporation and sign, under the handwritten words “Read and approved”, the last page of each original copy of the articles.
Regarding general partnerships (SNC) and limited liability companies (SARL), signing the act appointing one or more managers (if this was not done within the articles of incorporation) is required.
5°) Registration of the articles of incorporation within the month following the adoption of the articles of incorporation, with:
Land Affairs Department (DAF) – Registration Department
Submission of three original copies for registration (one for the DAF Registration Department, one for the Registry of the Corporate Register and one for the company) and certified true copies of the registered articles of incorporation (one for the Taxation Department (DICP) and one for the “Caisse de Prévoyance Sociale” (CPS) (Social welfare fund) in view of the hiring of employees.
Payment of registration fees: 1% minimum and XPF 50,000 for non-trading and commercial companies and interest economic groups (GIE), a fixed fee of XPF 2,500 for cooperatives.
6°)Once the articles of incorporation are registered, the company is required to insert a notice of registration of the company in a legal notice newspaper of French Polynesia. It is advisable to keep a few copies of the issue including the company’s notice of incorporation.
7°)The company’s legal representative must apply for the company’s registration with the Clerk’s Office of the Joint Commercial Court within 30 days following the adoption of the articles of incorporation. To that effect, the representative is required to lodge an application file for registration with the CDFE including the following for the most part:
A receipt for payment of the legal notice to be published after examination at the Corporate Register;
A proof of the company’s address.
Regarding manager(s) being natural person(s):
Two photocopies of the currently valid I.D. card or passport or two copies of the birth certificate (one original not more than three-month old as well as one copy) of the manager(s);
With respect to foreign persons: a copy of the foreign trader’s permit issued by the Department of employment, training and occupational integration (SEFI) is to be provided upon registration.
A sworn statement of filiation and non-conviction of the manager or managers regarding the management of a company.
Regarding the manager(s) of one or more legal entity/entities:
Two Kbis extracts [certificate of registration with the Corporate Register] (one original not more than three-month old as well as one copy) or one original of the certificate attesting the person’s existence, accompanied by a translation in French if required.
Regarding the managing legal entity’s legal representative, the documents required with respect to managing natural persons are to be provided.
A certificate attesting the deposit of funds issued by the bank if the contribution is in cash;
A report of the capital contributions auditor if a contribution in kind is recorded*;
A copy of the published legal notice, signed by the relevant legal notice newspaper’s publication director in French Polynesia;
Two original copies of the articles of incorporation signed and registered*;
The registered* report of appointment of the manager(s) (if appointment is outside the articles of incorporation);
One M1 form to be filled in and signed (printed form supplied by the CDFE);
One form relating to taxes known as “Annexe C” to be filled in and signed;
Five thousand (5,000) XPF francs to cover file processing fees in cash, by check “to the order of CCISM”, bank cards (exclusive of AMEX) or bank transfer (transfer order to be provided) to the SOCREDO Account: 00001-77555500070-08;
(*) Documents to be registered with the DAF Registration Department;
8°)The CDFE forwards the duly completed M1 form along with the file documents to the Corporate Register (RCS). If no request for supplementary items is made by the Corporate Register within 30 days, the Kbis extract is passed on to the CDFE for delivery to the companys’ legal representative.
9°) The CDFE forwards the duly completed M1 form along with the file documents to the Statistical Institute of French Polynesia (ISPF). The Tahiti number will be issued within 15 days.
10°) The CDFE forwards the duly completed M1 form along with the file documents to the Taxation Department (DICP) solely upon receipt of the Kbis extract from the Corporate Register, attesting the company’s legal existence.
11°)The CDFE forwards the duly completed M1 form to the Caisse de Prévoyance Sociale (CPS)(Social welfare fund) solely upon receipt of the Kbis extract from the Corporate Register, attesting the company’s legal existence.
Remark: if all these formalities can be completed on one’s own, this should not prevent the applicant for the creation of a business to turn to a legal professional who will assist him in choosing a legal structure and undertake all of these administrative steps on his behalf.
2. UPON STARTING THE ACTIVITY:
TAX AND REPORTING OBLIGATIONS
Business license tax
Upon starting the activity, the registration must be notified within 30 days to the Business Development and Registration Center (CDFE) with respect to commercial and arts and crafts activities or directly with the Taxation Department (DICP) regarding non-commercial activities.
Upon the creation and with respect to any change
of address, activity: notification within 30 days to the CDFE;
of rent, employees, equipment: notification within 30 days with the DICP.
with the CDFE for commercial activities;
with the DICP for non-commercial activities.
Declaration of turnover for the previous year and operating expenses before the 1st of April.
Corporate income tax
Regarding companies with the accounting year coinciding with the calendar year, tax returns to be filed on the 30th of April of the following year at the latest.
Value added tax (VAT)
All companies with a turnover in excess of XPF 5,000,000/year are liable to VAT, regardless of their status.
The Value added tax payer has two obligations:
Reporting the VAT monthly or three-monthly, to be paid to the tax collection office.
New businesses liable to VAT are under the obligation to complete returns based on their tax regime, as determined from their provisional turnover.
1/ Creation of a company, regardless of its legal form
Registration fees are applicable to contributions to the company, according to the rates as follows:
contributions of sums of money, claims, deposits, sureties, current accounts and movable property taxed at a rate of 1%;
simple contributions of goodwill, customers, right to lease or undertaking to lease taxed at the rate of 3%;
real property contributions taxed at the rate of 5%;
important: the minimum amount of registration fees as applicable to company creation acts is XPF 50,000.
2/ Transfer of partnership interests
Acts relating to the transferring of shares of a company, the capital of which is divided into shares, are liable to a 2% registration fee.
Transfers of partnership interests other than shares, regardless of their nature, are liable to a 5% registration fee.
These fees are based on the expressed price and the capital corresponding to the charges as may be adding to the price, or on the actual market value of the transferred interest if higher.
3/ Increases in and reductions of capital
Increases in capital through contribution in cash are taxed at the fixed fee of XPF 2,500.
With respect to the other forms of capital increase, the rates defined in 1/ above are applicable.
Capital reduction acts are taxed at the fixed rate of XPF 7,000, barring application of proportionate fees in case of a transfer of assets between partners or corporate acquisitions to a partner.
4/ Company winding up and official receivership
Company winding-up acts are subject to a fixed fee of XPF 7,000 in the absence of official receivership, or to a right to share or transfer in case of conveyance of property to one or more partners when they are not the contributors.
The registration formalities are to be completed with: