You hired your first employee in France on a fixed-term contract. It felt like the prudent choice: test the profile, cover a launch phase, keep the headcount flexible while you run the company from London, New York, Dubai or Singapore. Now the end date written in the contract is approaching, the person works well or does not, and you face questions that French law answers with unusual strictness. Can you simply renew the contract? Can you let it end and hire someone else for the same post? What does the exit cost, and what happens if a court later decides the contract was really a permanent one? The fixed-term contract (contrat à durée déterminée, universally shortened to CDD) is an exception in French employment law, and every aspect of it, from the reason for hiring to the last payslip, is regulated. This guide explains how a foreign-based employer uses a CDD lawfully for a first hire: when it is allowed and what the written contract must contain, how long it can last and how to renew it, what the end of the contract costs, and how a CDD turns into a permanent contract (contrat à durée indéterminée, the CDI) by court order, with the defences available to a company managed from abroad. Each decisive rule is quoted from the statute in force, with its official reference.

I. Can a foreign company hire its first French employee on a fixed-term contract and renew it from abroad

The starting point surprises many founders: in France, the permanent contract is the normal form of employment, and the fixed-term contract is only a derogation for temporary tasks. A CDD signed for a job that is in reality permanent exposes the company to requalification, meaning a judge reclassifies the relationship as a CDI from day one, with back pay consequences. Distance does not excuse informality either: the contract must be written, precise, signed and delivered on time. This first part sets out the lawful uses of the CDD and the mechanics of duration and renewal.

A. When is a fixed-term contract lawful for a first hire, and what must the written agreement contain?

The prohibition is stated bluntly. The statute provides: “Un contrat de travail à durée déterminée, quel que soit son motif, ne peut avoir ni pour objet ni pour effet de pourvoir durablement un emploi lié à l’activité normale et permanente de l’entreprise.” (Article L1242-1 of the Labour Code). In plain terms, if the post corresponds to the standing needs of your French company, for instance your only salesperson on an open-ended mission to develop the market, a CDD is the wrong vehicle and a CDI should be signed. Lawful CDDs cover temporary situations: replacing an absent employee, handling a temporary increase in activity, filling a seasonal post, or supporting the launch phase with a precisely defined temporary task. The statute expresses the same idea positively: “un contrat de travail à durée déterminée ne peut être conclu que pour l’exécution d’une tâche précise et temporaire, et seulement dans les cas suivants” (Article L1242-2 of the Labour Code), followed by the closed list of permitted cases, including replacement of an employee in case of absence, temporary part-time arrangement, suspension of contract, or departure preceding the elimination of a post.

For a foreign founder’s first hire, the most commonly used ground is the temporary increase in activity (accroissement temporaire d’activité), for example to test the French market for twelve months before deciding on a permanent presence. This ground is legitimate, but it must reflect reality: the task described in the contract should be temporary by nature, with an identifiable end, such as launching the French version of a product or covering an order peak. A vague motive such as “business development” with no time horizon invites requalification. Equally, the ground stated at hiring must match the facts throughout: a CDD signed for a temporary workload peak that quietly becomes the company’s permanent commercial engine is exactly the pattern judges sanction.

The contract must also fix an end point from the start. The statute states: “Le contrat de travail à durée déterminée comporte un terme fixé avec précision dès sa conclusion.” (Article L1242-7 of the Labour Code). The same article allows contracts without a precise end date only in narrow cases, essentially replacements of absent employees, pending arrival of a CDI recruit, and seasonal or customary posts. For a first hire on increased-activity grounds, always write an exact end date. An open-ended CDD on the wrong ground combines two violations at once.

Form is as important as substance. The statute provides: “Le contrat de travail à durée déterminée est établi par écrit et comporte la définition précise de son motif. A défaut, il est réputé conclu pour une durée indéterminée.” (Article L1242-12 of the Labour Code). An oral agreement, an offer letter without the motive, or a contract that merely states “fixed-term contract for twelve months” without saying why, is deemed a permanent contract automatically. The same article lists the mandatory mentions: the name and professional qualification of the replaced person where the contract covers a replacement, the end date and any renewal clause where the contract has a precise term, the minimum duration where it has none, and the precise designation of the workstation. From abroad, the operational lesson is to failure-proof the paperwork: use a template reviewed once by French counsel, fill in the motive with concrete facts, sign electronically with a qualified signature before the start date, and keep the countersigned copy.

Timing of delivery is itself a legal obligation. The statute states: “Le contrat de travail est transmis au salarié, au plus tard, dans les deux jours ouvrables suivant l’embauche.” (Article L1242-13 of the Labour Code). Two working days (jours ouvrables, Monday to Saturday excluding public holidays) from hiring, not from the end of the first week. Late transmission does not by itself reclassify the contract, but it opens a separate compensation claim for the employee, as the requalification article expressly distinguishes the two sanctions. A founder who recruits remotely should therefore send the contract for signature before day one, not after the employee has started.

Two related formalities complete the hiring picture. The single hiring declaration (déclaration préalable à l’embauche, the DPAE filed with URSSAF, the network of agencies collecting social charges) must precede any start of work, and the employee must be registered in the monthly payroll return (Déclaration Sociale Nominative, the DSN, the single electronic declaration reporting pay, contributions and contract events). The applicable sector-wide collective agreement (convention collective, the industry rulebook supplementing the Labour Code) may add its own constraints on fixed-term hiring, notice and bonuses, so identify the correct agreement at incorporation. Our guide to choosing between an SAS, a SARL, a branch and a subsidiary in France helps align the hiring vehicle with the corporate structure, since the choice of entity shapes which collective agreement and which payroll circuit apply.

B. How long can the contract last, and how do you renew it before the end date?

Duration is capped, renewals included. The default ceiling, applicable where no extended branch agreement sets a different figure, is eighteen months in total. The statute provides: “A défaut de stipulation dans la convention ou l’accord de branche conclu en application de l’ article L. 1242-8 , la durée totale du contrat de travail à durée déterminée ne peut excéder dix-huit mois compte tenu, le cas échéant, du ou des renouvellements intervenant dans les conditions prévues à l’ article L. 1243-13 ou, lorsqu’il s’applique, à l’ article L. 1243-13-1 .” (Article L1242-8-1 of the Labour Code). Shorter caps apply in specific cases, nine months where the contract covers the wait for a CDI recruit’s arrival or urgent safety works, and longer twenty-four-month caps in cases such as performance abroad or departure preceding a post elimination. Before signing, check the branch agreement: an extended sector agreement (accord de branche étendu) may lawfully set its own total duration, and that figure then governs instead of the eighteen months.

Renewal is possible but counted. The default rule where the branch agreement is silent states: “A défaut de stipulation dans la convention ou l’accord de branche conclu en application de l’ article L. 1243-13 , le contrat de travail à durée déterminée est renouvelable deux fois pour une durée déterminée.” (Article L1243-13-1 of the Labour Code). Two renewals maximum by default, each for a fixed period, with the combined initial plus renewal periods staying within the overall ceiling. The same article requires that renewal terms be written into the initial contract or into an amendment (avenant) submitted to the employee before the initially planned end date. A renewal agreed orally after expiry, or notified after the contract has already ended, is not a renewal at all: the first contract has ended, and any continued work restarts the analysis from zero, usually toward requalification.

From abroad, run renewals as a diarised procedure, not as an email exchange the week before expiry. Six weeks before the end date, decide: convert to a CDI, renew once by signed amendment, or let the contract end. If renewing, state the new end date and keep the same motive, since a renewal cannot change the ground of hiring. Never exceed the ceiling by stacking a second renewal onto an already long initial term: an initial twelve-month contract renewed twice for three months each reaches eighteen months and the limit. Where the branch agreement allows more renewals, keep the written proof of that provision in the file, because the employee’s counsel will ask for it.

Early termination before the end date is a separate trap. The statute provides: “Sauf accord des parties, le contrat de travail à durée déterminée ne peut être rompu avant l’échéance du terme qu’en cas de faute grave, de force majeure ou d’inaptitude constatée par le médecin du travail.” (Article L1243-1 of the Labour Code). Unlike a CDI, a CDD cannot be ended at will mid-term: poor performance alone does not qualify, and an employer who sends the employee home early owes the salary through the planned end date plus damages. The lawful exits are mutual agreement (rupture d’un commun accord), serious misconduct, force majeure, medically certified unfitness, or the employee’s departure for a permanent job elsewhere. A founder disappointed after two months should therefore negotiate a mutual separation in writing rather than improvising a dismissal that the statute does not allow.

II. What the end of a fixed-term contract costs and how it turns into a permanent contract

The end of a CDD is not a dismissal: no preliminary meeting, no dismissal letter, no severance for personal grounds. But it has its own price, its own closing documents, and its own litigation risk. The most expensive mistake is letting the employee keep working past the end date without a signed renewal or a CDI: the contract continues, and the law treats the relationship as permanent. This second part prices the exit and explains requalification and the waiting period before rehiring.

A. What do you pay when the contract ends, and which papers close the file?

The signature cost of fixed-term work is the end-of-contract indemnity (indemnité de fin de contrat, often called the precarity bonus). Where the relationship does not continue as a CDI, the statute states: “Lorsque, à l’issue d’un contrat de travail à durée déterminée, les relations contractuelles de travail ne se poursuivent pas par un contrat à durée indéterminée, le salarié a droit, à titre de complément de salaire, à une indemnité de fin de contrat destinée à compenser la précarité de sa situation.” (Article L1243-8 of the Labour Code). The rate and payment mechanics are fixed: “Cette indemnité est égale à 10 % de la rémunération totale brute versée au salarié.” and “Elle est versée à l’issue du contrat en même temps que le dernier salaire et figure sur le bulletin de salaire correspondant.” (Article L1243-8 of the Labour Code). Ten percent of total gross pay over the whole contract, including renewals, shown on the final payslip. For a twelve-month CDD at 3,000 euros gross monthly, the bonus is 3,600 euros. No bonus is due where the employee joins on a CDI immediately after, declines a CDI offer for the same or a similar post, or is guilty of serious misconduct, but these exemptions are narrowly applied, so budget the ten percent by default.

On top of the bonus come the standard exit payments: the balance of salary, the compensatory payment for unused paid leave (two and a half days accrue per month worked), and any pro rata contractual bonuses. All of them must be itemised in the final settlement statement (solde de tout compte), which, drawn up by the employer and countersigned by the employee, “fait l’inventaire des sommes versées au salarié lors de la rupture du contrat de travail” (Article L1234-20 of the Labour Code). The receipt becomes releasing for the listed sums once the employee has failed to challenge it, since it “peut être dénoncé dans les six mois qui suivent sa signature” (Article L1234-20 of the Labour Code), after which the employer is discharged for the mentioned amounts. An exhaustive, exact inventory is therefore the cheapest legal protection available: a forgotten sum is not covered.

The remaining closing documents mirror any contract end. The employer must deliver the employment certificate, since the statute provides: “A l’expiration du contrat de travail, l’employeur délivre au salarié un certificat dont le contenu est déterminé par voie réglementaire” (Article L1234-19 of the Labour Code), stating entry and exit dates and posts held. The unemployment attestation for France Travail, the public operator paying unemployment benefits, must be completed so the employee can register without delay; late or incorrect attestations routinely produce damages claims. The exit must be declared in the DSN of the departure month with the exact leaving date and the nature of each payment, because contribution records and benefit rights derive from it. Where payroll and contribution audits are a concern, the process is described in our guide to answering a URSSAF audit from abroad. For founders based in Paris and the Ile-de-France region, disputes go to the labour court of the place of employment, in practice the Paris labour court (conseil de prud’hommes de Paris) for a first hire in the capital, and representation by counsel under a proper mandate means the founder rarely needs to travel.

B. How does a fixed-term contract become a permanent one, and how do you defend from abroad?

Requalification (requalification en CDI) is the court’s response to a CDD that breaks the rules: the contract is deemed permanent from the start, with an order to pay the missing wages, the precarity bonus where unpaid, and an indemnity for the irregular hiring itself. The mechanism is automatic in its trigger. The statute states: “Est réputé à durée indéterminée tout contrat de travail conclu en méconnaissance des dispositions des articles L. 1242-1 à L. 1242-4, L. 1242-6 , L. 1242-7 , L. 1242-8-1 , L. 1242-12 , alinéa premier, L. 1243-11 , alinéa premier, L. 1243-13-1 , L. 1244-3-1 et L. 1244-4-1” (Article L1245-1 of the Labour Code). Each reference in that list is a doorway to requalification: a permanent post filled by CDD, a missing precise motive, no written contract, an exceeded ceiling, an excessive number of renewals. The provision adds a nuance worth knowing: late delivery of the contract within the two-day rule, alone, does not force requalification but opens a separate compensation claim. Founder files should therefore be audited against this list before any dispute, not after.

The classic triggers in first-hire practice are depressingly repetitive. The employee keeps working one day past the end date with no signed renewal: the relationship continues and the CDI is deemed formed. The motive was “increased activity” but the post plainly covers the company’s standing needs: requalification from day one. The contract was renewed three times, or renewed after expiry by a late amendment: the renewal rules were breached. Successive CDDs were chained on the same post without observing the waiting period: the carence rules were breached. Each pattern is avoidable with a calendar and a checklist, which is precisely what distance management requires.

The waiting period between two fixed-term hires on the same post (délai de carence) deserves its own warning, because founders often plan to “take a short break and rehire”. The statute provides: “A l’expiration d’un contrat de travail à durée déterminée, il ne peut être recouru, pour pourvoir le poste du salarié dont le contrat a pris fin, ni à un contrat à durée déterminée ni à un contrat de travail temporaire, avant l’expiration d’un délai de carence calculé en fonction de la durée du contrat incluant, le cas échéant, son ou ses renouvellements.” (Article L1244-3 of the Labour Code). The days counted are the business’s opening days, and an extended branch agreement may set the computation method or the exemptions. In practice, where the same post genuinely needs continuous cover, the lawful answer is usually a CDI, not a second CDD after a pause: a pause calibrated to dodge the waiting period, with the same employee returning to the same desk, is treated as fraud on the rules and leads straight to requalification.

Defending a requalification claim from abroad follows the same method as any employment dispute: counsel in France, a complete evidence file, and respect for time limits. The action for requalification concerns performance of the contract, so the two-year limit applies, since the statute provides: “Toute action portant sur l’exécution du contrat de travail se prescrit par deux ans à compter du jour où celui qui l’exerce a connu ou aurait dû connaître les faits lui permettant d’exercer son droit.” (Article L1471-1 of the Labour Code). Keep every CDD, amendment, payslip, DSN confirmation, timesheet and motive-related proof for at least that long. Three habits prevent most claims: write the real temporary motive with dates and facts, never let work continue past the end date without a signed text, and convert to a CDI as soon as the post proves permanent. A CDD used honestly for temporary work, documented precisely and closed on time, is easy to defend; a CDD used as a probation CDI, renewed late and chained without pause, is not.

Conclusion

A fixed-term contract gives a foreign founder flexibility, but only within rails. Hire on a CDD solely for a precise temporary task, never for the standing needs of the company; write the exact motive, the end date and the renewal clause into a signed contract delivered within two working days of hiring; respect the eighteen-month default ceiling and the two-renewal default limit, checking the branch agreement for different figures; never end the contract early except by mutual written agreement, serious misconduct, force majeure, certified unfitness or the employee’s departure for a permanent job; pay the ten percent end-of-contract bonus with the last salary unless a statutory exemption plainly applies; and close the file with the certificate, the itemised final settlement and the France Travail attestation, declared in the exit DSN. Above all, never let work continue past the end date without a signed renewal or a CDI, and never chain contracts on the same post without the waiting period: each shortcut is a doorway to requalification as a permanent contract. Managed with a calendar, a template and a payroll provider in France, the CDD remains what it should be, a temporary tool for a temporary need, and the distance between the founder and the French office changes nothing to the outcome.