FRANCE Law and Practice Contributed by: François-Xavier Awatar and Lina Lahlou, Osborne Clarke
11. Execution Formalities 11.1 Authentication, Notarisation, Witnessing, Etc There is no requirement under French law for the fran - chise agreement to be notarised or authenticated. No witnesses are required for the valid execution of the agreement. The franchise agreement is validly con - cluded by private deed. Where the agreement is entered into by private signa - ture between the parties, Article 1375 of the Civil Code requires only evidentiary formalities; accordingly, the agreement must be executed in as many originals as there are parties, and the number of originals must be specified in the agreement. Furthermore, there is no obligation to register the franchise agreement with any public authority. However, the parties may elect to register the agreement on a voluntary basis in order to obtain a date certain (date certa) or to ensure the enforceability of certain transactions against third par - ties. 11.2 Electronic Signatures Pursuant to Article 1366 of the Civil Code, an elec - tronic document has the same evidentiary value as a document on paper, provided that the person from whom it emanates can be duly identified and that the integrity of the document is guaranteed. Article 1367 of the Civil Code further provides that an electronic signature shall be valid where it consists in the use of a reliable identification process guarantee - ing the link between the signature and the document to which it relates; such reliability is presumed where the conditions laid down by decree are satisfied. Electronic signature solutions (such as DocuSign and equivalent platforms) are valid in France, provided that they comply with Regulation (EU) No 910/2014 of 23 July 2014 on electronic identification and trust ser - vices for electronic transactions in the internal market (the “eIDAS Regulation”) and the standards defined therein. The eIDAS Regulation distinguishes three levels of electronic signature: simple, advanced and qualified. A qualified electronic signature within the meaning of
agreement where the franchisor is based abroad, it should therefore be possible to use a foreign currency. 10.2 Withholding Tax Franchise royalties paid by a debtor carrying on busi - ness in France to a non-resident beneficiary that does not have a permanent establishment in France are subject to withholding tax pursuant to Article 182 B of the French General Tax Code. The applicable rate of withholding tax may be reduced or eliminated by virtue of a bilateral tax treaty concluded between France and the state of residence of the beneficiary. For these purposes, the term “royalties” encompass - es payments made for the use of, or the right to use, trade marks, patents, secret formulae or processes, and information relating to industrial, commercial or scientific experience (know-how); payments for the use of equipment are also covered. In addition, franchise fees and royalties are generally stipulated exclusive of value added tax ( taxe sur la valeur ajoutée – TVA) and are subject to VAT at the standard rate in accordance with the applicable provi - France does not maintain any foreign exchange con - trol regime. As a member of the eurozone and of the European single financial area, France permits the free movement of capital and payments, in accordance with Articles 63 et seq of the Treaty on the Function - ing of the European Union. Accordingly, the payment of franchise fees, royalties and service fees in foreign currencies is entirely unrestricted, and no prior author - isation from the Banque de France or from any other regulatory authority is required in order to effect such payments. Notwithstanding the foregoing, transfers of funds to or from foreign jurisdictions exceeding certain thresh - olds may be subject to reporting obligations imposed for the purposes of monetary flow surveillance and compliance with anti-money laundering legislation, in particular pursuant to the provisions of the French Monetary and Financial Code. sions of the French General Tax Code. 10.3 Foreign Currency Controls
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