France vs Germany: Where Should You Set Up Your European HQ?

Market Size and Economic Weight

• Germany: Largest EU economy (~€4.1 trillion GDP), population of 84 million. Strong industrial base, global leader in automotive, manufacturing, and engineering.

• France: Second-largest EU economy (~€3.2 trillion GDP), population of 67 million. Strong services economy, global hub for luxury, aerospace, fintech, and SaaS.

Verdict: Germany has a larger market, but France provides faster access to consumer sectors and SaaS adoption.

Business Environment

• Germany

  • Very structured, conservative business culture.

  • Long decision-making cycles.

  • Strong corporate governance standards.

  • More rigid regulations for startups.

• France

  • Dynamic startup ecosystem (La French Tech, Station F).

  • Paris = one of the world’s leading VC hubs.

  • Faster adoption of innovation in SaaS and fintech.

  • More openness to new market entrants.

Verdict: France is more startup-friendly, Germany is better for industrial or enterprise-focused businesses.

Legal Structures

• Germany:

  • Popular entity = GmbH (Gesellschaft mit beschränkter Haftung).

  • Requires €25,000 share capital (half must be paid upfront).

  • Bureaucracy is heavy, slower setup.

• France:

  • Popular entity = SAS (Société par Actions Simplifiée).

  • Minimum €1 share capital.

  • Quick setup (4–8 weeks).

Verdict: France wins on cost and speed.

Talent and Hiring

• Germany

  • Highly skilled workforce, especially in engineering and manufacturing.

  • Salaries higher for technical profiles.

  • Strict labor laws, strong unions, complex termination processes.

  • English widely spoken in business, but less outside major cities.

• France

  • Strong tech and SaaS talent pool in Paris, Lyon, Nantes.

  • Salaries competitive compared to Germany, but employer charges are higher (40–45%).

  • Employees are highly educated, many bilingual in English.

  • Strong pool of international talent attracted to Paris.

Verdict: Germany has more engineers, France has stronger SaaS/commercial talent.

Taxes and Incentives

• Germany

  • Corporate tax ~30%.

  • Few startup-focused tax incentives.

  • R&D incentives limited.

• France

  • Corporate tax 25% (reduced from 33% in recent reforms).

  • Strong incentives:

    • CIR (Crédit Impôt Recherche): up to 30% tax credit on R&D expenses.

    • JEI status: tax and payroll reductions for young innovative companies.

  • Aggressive government support for scaleups.

Verdict: France is clearly more favorable for SaaS and R&D-heavy businesses.

Ease of Doing Business

• Germany:

  • Administration slow, paperwork heavy.

  • Appointments with notaries often required.

  • More conservative banking sector.

• France:

  • Historically bureaucratic, but reforms (PACTE law) simplified incorporation.

  • Digital platforms (INPI, URSSAF) accelerate setup.

  • Still requires careful navigation, especially with payroll and tax compliance.

Verdict: France has improved significantly and is now faster for startups than Germany.

Ecosystem and Funding

• Germany:

  • Berlin = global startup hub, especially for e-commerce, mobility, and gaming.

  • Munich strong in deep tech, mobility, and industrial IoT.

  • VC ecosystem is large, but corporate-driven.

• France:

  • Paris = Europe’s largest VC hub in 2024 (ahead of London).

  • Strong government-backed funds (Bpifrance).

  • Specialized ecosystems for SaaS, fintech, healthtech.

  • Station F = world’s biggest startup campus.

Verdict: France is the VC leader, Germany strong in deep tech.

Culture and Sales Cycles

• Germany:

  • Very structured sales processes.

  • Long decision-making.

  • Clients prefer deep references and long-term relationships.

• France:

  • Faster adoption of SaaS and digital tools.

  • Relationship-driven but less rigid.

  • Sales cycles shorter for B2B SaaS.

Verdict: France is faster for SaaS go-to-market.

Costs

• Germany:

  • Higher salaries, but employer charges lower (~25%).

  • Office space in Berlin cheaper than Paris.

• France:

  • Lower salaries on average, but employer charges higher (~40–45%).

  • Office space in Paris more expensive.

Verdict: Total employment costs end up comparable.

Timeline to Incorporate

• Germany: 2–4 months to set up GmbH, especially with banking.

• France: 4–8 weeks to set up SAS.

Verdict: France is faster.

Final Recommendation

• Choose Germany if:

  • Your product is focused on industrial clients.

  • You want access to deep tech and engineering talent.

  • You are ready for slower, structured processes.

• Choose France if:

  • You are a SaaS, fintech, or consumer-tech startup.

  • You want faster access to capital and clients.

  • You value strong tax incentives and a dynamic ecosystem.

How morn Helps

morn is not just an incorporation provider—we are your business-first partner for entering France.

We help you:

• Incorporate a French SAS in weeks, not months.

• Secure a bank account and deposit capital.

• Set up payroll and compliance for your hires.

• Build your first commercial footprint with market study, ICP definition, lead generation, and meetings booked.

While Germany is an option, France offers the fastest growth path for SaaS and international scaleups.

Conclusion

France and Germany are both strong options for European expansion. But if speed, SaaS adoption, funding, and R&D incentives are your priorities, France provides a clearer advantage.

Don’t get lost in bureaucracy. Let morn handle the complexity so you can focus on growth.