Why US Startups Should Consider France as Their First EU Market
For US startups expanding overseas, Europe is usually the first destination. The key question is which country to choose as the entry point. Many look to the UK or Germany, but France has become an increasingly strong contender. With a large domestic market, central location, tax incentives, and a thriving startup ecosystem, France is now one of the most strategic gateways to Europe. This guide explains why France should be at the top of the list for US founders planning their European expansion.
1. Large and Attractive Domestic Market
France is the second largest economy in the EU with a GDP of more than 3 trillion euros. Its population of 67 million makes it a bigger domestic market than the UK.
For US startups in SaaS, fintech, and consumer tech, France offers:
A sophisticated customer base.
Strong demand for digital solutions.
Early adoption in sectors like fintech, e-commerce, and AI.
Unlike smaller EU countries, France allows you to scale significantly without leaving its borders.
2. Central Access to Europe
From Paris, you can reach major European capitals in under 2 hours by air or train. France provides immediate access to the EU single market with more than 400 million consumers.
This geographic advantage makes France an ideal hub to serve both Southern and Northern Europe while maintaining proximity to the US.
3. Favorable Tax Incentives for Startups
The French government actively supports innovation with some of the strongest tax incentives in Europe.
CIR (Crédit d’Impôt Recherche): up to 30 percent R&D tax credit.
JEI (Jeune Entreprise Innovante): tax and payroll relief for young startups.
Reduced corporate tax: 25 percent compared to 35 percent in the past.
For US companies building R&D teams in France, these incentives can reduce effective costs by up to 45 percent.
4. Strong Access to Talent
France produces world-class engineers, developers, and business talent. Elite schools like École Polytechnique, CentraleSupélec, and HEC Paris train many of Europe’s top professionals.
Key advantages:
Salaries are lower than in the US, though employer charges increase total cost.
Many professionals in Paris are bilingual, making it easier to integrate US teams.
Growing pool of experienced startup employees familiar with SaaS, growth, and venture capital.
5. Paris as a Venture Capital Hub
Paris has overtaken London in total venture capital invested in startups. More than €13 billion was raised by French startups in 2024.
For US companies, this means:
Easier access to local funding rounds.
A supportive ecosystem of VCs, accelerators, and government-backed funds.
Credibility in Europe when choosing France as HQ.
Success stories like Qonto, Doctolib, and Alan show international investors that France can produce unicorns at scale.
6. Regulatory Stability
France is part of the EU and benefits from harmonized regulations. This means:
Passporting of financial licenses across the EU.
Clear frameworks for data protection (GDPR).
Predictable legal environment.
Compared to the UK post-Brexit, France provides more certainty for scaling across the continent.
7. Cultural and Economic Alignment
French consumers value quality, innovation, and relationship-driven sales. For US startups with strong product-market fit, this creates opportunities to differentiate from local incumbents.
Although the sales cycle may be longer than in the US, once trust is established, client relationships are long-lasting and stable.
8. Case Example
A US SaaS company expanding to Europe considered Germany, the UK, and France. They chose Paris for three reasons:
Tax credits for R&D reduced their engineering costs by 35 percent.
Their French country manager was able to close enterprise contracts faster than expected.
Investors encouraged them to base their EU HQ in Paris to gain access to French funding and credibility.
Within 18 months, France became their fastest-growing market outside the US.
9. Why France vs the UK or Germany
UK: Brexit makes regulatory passporting into the EU impossible, forcing startups to set up a second base in Europe.
Germany: excellent market for industrial tech but slower adoption for SaaS and longer sales cycles.
France: combines market size, tax incentives, and speed of adoption, making it the most balanced option.
How morn Helps
morn simplifies the process for US startups entering France. We:
Incorporate a French SAS tailored to your parent structure.
Manage payroll and compliance from day one.
Secure tax incentives like CIR and JEI.
Recruit your first hires and set up sales operations.
Provide an optional commercial footprint service with market study, ICP definition, lead generation, and booked meetings.
Conclusion
France offers the perfect combination of a large domestic market, EU access, tax incentives, and a dynamic ecosystem. For US startups, choosing France as the first European market is not just about expansion but about building a long-term base for growth.
