Your French company exists on paper: the articles are signed, the share capital is released, the Kbis — the official identity card of your company issued by the clerk of the commercial court, called the greffe — is on its way. Then comes the next step, and for many foreign founders it is the most dangerous one: signing the lease for the shop, the workshop or the office where the business will actually operate. In France that lease is rarely a simple rental contract. It is usually a commercial lease, a bail commercial, governed by a protective statute in the Commercial Code that locks the landlord in for nine years, gives the tenant a right to stay and a right to compensation, and punishes informal shortcuts. A founder who signs a nine-year commitment thinking it works like an Anglo-American break-clause lease, or who pays a full year of rent as a deposit because the landlord asked, discovers the mistake when it is too late to renegotiate. This guide explains, for a foreign-owned company doing business in France, what you are really signing, how to keep your first premises reversible, what money the landlord can lawfully demand, and how to leave, renew or defend yourself when the relationship turns sour. Every rule below comes from the statute itself and from the Court of Cassation, the Cour de cassation, with the exact references so your advisers can check them.
I. What lease are you really signing, and how do you keep your first French premises reversible
A. The nine-year 3-6-9 commercial lease: what Article L.145-4 locks in, and why the three-year exit is your safety valve
French law reserves a special status for leases of premises in which a business is operated. Article L.145-1 of the Commercial Code states that “Les dispositions du présent chapitre s’appliquent aux baux des immeubles ou locaux dans lesquels un fonds est exploité”, which means the chapter applies to leases of buildings or premises in which a business, a fonds de commerce, is run. If your French subsidiary or your registered branch operates a shop, a restaurant, a workshop or even offices where goodwill is built, the statute normally applies as a matter of public policy, and clauses that try to contract out of it are void. Registration matters here: the tenant must generally be registered, either in the trade and companies register, the RCS (registre du commerce et des sociétés), or in the national register of companies, the RNE (registre national des entreprises), and the lease must be on foot when the rights are claimed. A foreign founder whose company is still being incorporated should therefore align the incorporation calendar with the lease signature, because the protection follows registration and genuine operation, not the mere signature.
Once the statute applies, the duration rule surprises most common-law readers. Article L.145-4 of the Commercial Code provides that “La durée du contrat de location ne peut être inférieure à neuf ans.” The lease cannot be shorter than nine years. But the nine years bind the landlord far more than they bind you: the same article continues that “Toutefois, le preneur a la faculté de donner congé à l’expiration d’une période triennale, au moins six mois à l’avance, par lettre recommandée avec demande d’avis de réception ou par acte extrajudiciaire.” The tenant, the preneur, may walk away at the end of each three-year period — after three years, then after six — by giving notice, called a congé, at least six months in advance, either by registered letter with acknowledgment of receipt or by a bailiff’s writ, now called an acte extrajudiciaire served by a commissaire de justice. This is the famous 3-6-9 rhythm: nine years for the landlord, exits for the tenant every three. The official English-language guidance on terminating a commercial lease confirms the practice in plain terms: the tenant may end the lease at the close of each three-year period for no particular reason, provided notice is served at least six months before the current three-year period expires.
Two practical consequences follow for a foreign company. First, never let a landlord talk you into waiving the three-year exits in a standard commercial lease; under the statute, contrary stipulations in a nine-year lease are ineffective except for narrow cases such as single-use premises, pure office leases or leases longer than nine years. If your business model is untested in France, the exits at years three and six are your contractual lifeboat, and the six-month notice must be diarised from day one. Miss the deadline and you are bound for the next three years, with rent running whether the premises trade profitably or not. Second, at the end of the nine years the lease does not simply vanish. Article L.145-9 of the Commercial Code provides that “les baux de locaux soumis au présent chapitre ne cessent que par l’effet d’un congé donné six mois à l’avance ou d’une demande de renouvellement”, so without a congé or a renewal request the written lease continues by tacit extension, and during that extension notice must still be given at least six months ahead for the last day of a calendar quarter. The same article adds that “Le congé doit être donné par acte extrajudiciaire.” In practice many landlords use a commissaire de justice for the congé, because a notice served by the wrong channel or without the mandatory wording can be annulled.
The congé formalism is strict, but the Court of Cassation has drawn a line that every foreign tenant should understand. In a judgment of 28 June 2018, the Third Civil Chamber, the chamber that hears commercial lease cases, held that “un congé délivré sans motif ou pour motifs équivoques par le bailleur produit néanmoins ses effets et met fin au bail commercial, dès lors que le bailleur est en toujours en droit de refuser le renouvellement du bail à la condition de payer une indemnité d’éviction” (Cass. 3rd civ., 28 June 2018, appeal no. 17-18.756). A notice to quit given without reasons, or with unclear reasons, still ends the lease, because the landlord is always entitled to refuse renewal provided it pays the eviction indemnity. The Court added that “la nullité de ce congé prévue par l’article L. 145-9 du code de commerce est une nullité relative qui ne peut être soulevée que par le preneur”, meaning the nullity of such a notice is relative: only the tenant can invoke it, and the tenant may instead accept the situation, claim the indemnity and stay until it is paid. For your company, the lesson is double-edged. A sloppy congé from your landlord is not automatically harmless to you, and a sloppy congé from you at year three or six can be challenged by the landlord. Every notice in either direction should be drafted or reviewed by counsel and served through the proper channel.
B. Starting lighter: the three-year derogatory lease, domiciliation while you test the market, and the file a landlord demands from a foreign company
If nine years feel disproportionate for a first French foothold, the statute offers a legal short lease: the bail dérogatoire, the lease that derogates from the commercial-lease chapter. Article L.145-5 of the Commercial Code allows the parties, when the tenant takes possession, to opt out of the protective chapter “à la condition que la durée totale du bail ou des baux successifs ne soit pas supérieure à trois ans”, on condition that the total duration of the lease or successive leases does not exceed three years. This is the standard vehicle for a pop-up shop, a first Paris office or a pilot workshop: two or three years, freely negotiated rent and charges, no automatic right to renewal, no eviction indemnity at the end. For a foreign founder it is often the right first step, because it caps the commitment while the French revenue is still hypothetical.
But the derogatory lease is a trap for founders who improvise renewals. The case law is unforgiving on two points. First, staying on after expiry converts the arrangement. The Court of Cassation recalled, under the earlier version of the text, that “Il résulte de ce texte que si, à l’expiration du bail dérogatoire conclu pour une durée au plus égale à deux ans le preneur reste et est laissé en possession, il s’opère un nouveau bail soumis au statut des baux commerciaux” (Cass. 3rd civ., 25 May 2023, appeal no. 21-23.007). If you remain in the premises with the landlord’s tolerance after the short lease expires, a brand-new lease under the full protective statute comes into existence — with the nine-year logic and the renewal rights attached. Under the current three-year version, the same mechanism in Article L.145-5 applies if the tenant stays on more than one month past expiry without a new compliant short lease. Never drift past the end date on a handshake: either leave, or sign the proper next lease before the clock runs out.
Second, you cannot chain short leases to keep the protective statute away forever. In a 22 October 2020 judgment, the Court of Cassation held that a short lease signed after the 18 June 2014 Pinel Act came into force “devait répondre aux exigences de ce texte”, had to satisfy the requirements of the new Article L.145-5 (Cass. 3rd civ., 22 October 2020, appeal no. 19-20.443), so that its duration added to the earlier short leases for the same business in the same premises could not exceed three years counted from the first short lease. The tenant who had occupied the wine bar since before 2013 could not be treated as an occupier without title simply because the landlord had papered the occupation as successive derogatory leases. For a foreign company, the message is that the three-year envelope is global per business per premises: plan the transition to a full 3-6-9 lease, a move, or an exit before the envelope closes, and never sign a waiver of the statute inside a short lease and assume it binds you.
Before any lease, many foreign founders use a lighter address solution: domiciliation, the provision of a registered office address by an authorised domiciliation company, while the real activity starts from abroad or from serviced offices. Article L.123-10 of the Commercial Code requires registering businesses to declare their company address and prove their right to use it, since persons registering “doivent déclarer l’adresse de leur entreprise et en justifier la jouissance”. Domiciliation satisfies the one-stop registration filing, the guichet unique run through the INPI (Institut national de la propriété industrielle), and gets the company its RCS number and its Kbis extract. But domiciliation is not an operating lease: it gives no right to receive customers, store stock or fit out premises, and landlords know it. When you move to a real lease, the landlord’s file typically includes the draft articles, proof of the share-capital deposit, the Kbis once issued, the identity and specimen signature of the legal representative, recent accounts or a business plan for a new company, and frequently a bank guarantee or a parent-company guarantee when the tenant is a young subsidiary of a foreign group. Prepare this file before negotiating: a foreign file takes longer to verify, and Paris landlords will simply rent to the next candidate if your guarantees stall. Each acronym in the file has a meaning your head office should learn: the RCS is the register itself, the Kbis is the extract that proves the company exists, the RNE is the newer national register fed by the same filing, the INPI operates the one-stop shop, and the BODACC (Bulletin officiel des annonces civiles et commerciales) is the gazette where your incorporation notice is published. The greffe, the court clerk’s office, issues the Kbis and records most filings about the company’s life.
II. Money and exit: rent, charges and deposit during the lease, then leaving, renewing or being evicted without paying for years you will not use
A. How your rent moves, what charges you really owe since the Pinel reform, and the legal ceiling on the deposit
Rent in a French commercial lease has three layers, and each one is regulated. The starting rent is freely negotiated, but at renewal the benchmark is the rental value. Article L.145-33 of the Commercial Code states that “Le montant des loyers des baux renouvelés ou révisés doit correspondre à la valeur locative”, the rent of renewed or revised leases must reflect the rental value, assessed from the characteristics of the premises, their permitted use, the parties’ respective obligations, local commerciality factors and comparable rents nearby. A landlord who demands double the rent at renewal must justify it against these five criteria, and the tenant can ask the judge to fix the renewal rent. Foreign tenants in prime Paris streets should note the fourth criterion: local commerciality factors weigh heavily in Paris, so a renewal in the 8th arrondissement or Saint-Germain follows different comparables than a warehouse in Seine-Saint-Denis. During the lease, indexation is normally tied to one of three official indices — the ICC (indice du coût de la construction, construction-cost index), the ILAT (indice des loyers des activités tertiaires, tertiary-activities index) or the ILC (indice des loyers commerciaux, commercial-rents index) — and since the Pinel Act of 18 June 2014 the parties to a new lease may only index on these, with the ILC or ILAT usually kinder to tenants than the old ICC. Check which index your draft uses before signing: over nine years the choice moves real money.
Charges and taxes are the second layer, and the Pinel reform cleaned up a market full of abusive pass-throughs. Since 2014 the lease must contain a precise inventory of the categories of charges, taxes and works, distinguishing what stays with the landlord — typically major structural works under Article 606 of the Civil Code, except where the lease allocates them within strict limits — from what the tenant reimburses. The 5 November 2014 decree lists the charges that can never be passed to the tenant. In practice, demand the itemised statement, compare it with the decree, and refuse lump-sum charge clauses that the statute no longer tolerates. The third layer at renewal or triennial revision follows the same rental-value logic, with statutory caps smoothing brutal jumps unless the use, the premises or the obligations have materially changed. The English guidance on the commercial lease contract summarises the framework and points to the official forms; use it as a checklist, then verify each clause against the statute, because summaries do not replace the articles.
The deposit is where foreign founders overpay most often. French practice commonly asks for one quarter of a year’s rent, and the statute polices the rest. Article L.145-40 of the Commercial Code provides that “Les loyers payés d’avance, sous quelque forme que ce soit, et même à titre de garantie, portent intérêt au profit du locataire, au taux pratiqué par la Banque de France pour les avances sur titres, pour les sommes excédant celle qui correspond au prix du loyer de plus de deux termes.” Advance rents in any form, even as a guarantee, earn interest for the tenant at the Banque de France rate once they exceed two terms of rent. The same article adds a protection that matters when your building is sold mid-lease: “En cas de mutation à titre gratuit ou à titre onéreux des locaux pris à bail, l’obligation de restitution au preneur des sommes payées à titre de garantie est transmise au nouveau bailleur.” If the premises change hands, the duty to return your guarantee passes to the new owner, so a sale does not vaporise your deposit. Refuse demands of six or twelve months’ cash deposit dressed up as advance rent: beyond the lawful mechanics the money must earn you interest, and at the end of the lease restitution follows the joint exit inventory, the état des lieux de sortie, set against genuine arrears or proven damage — not against a landlord’s vague refresh works. The official guidance on security deposits in commercial leases confirms that a deposit is a common but framed negotiation point; frame it with Article L.145-40 in hand. And keep the paperwork of every payment: proof of payment is the theme of the whole French lease, from the entry inventory to the last receipt, because the judge decides on documents, not on recollections.
B. Leaving at three or six years, renewing at nine, or facing eviction: the congé mechanics, the price of saying no, and the Paris specifics
Leaving properly is a procedure, not a letter. At the end of each three-year period, serve the congé at least six months before the period ends, by registered letter with acknowledgment of receipt or by a commissaire de justice, and keep the proof of service. Outside the three-year dates, early exit is only possible in the cases the statute or the lease allows — judicial termination for breach, destruction of the premises, retirement or death of an individual tenant with transmission to heirs, or a negotiated surrender, called résiliation amiable, which only becomes final one month after notice to the creditors registered on the business. The service-public guidance on terminating a commercial lease walks through each exit route; follow its sequence and diary every deadline twice, because a late congé binds you for three more years of rent.
At nine years the positions reverse: the tenant has a right to renewal, and the landlord who refuses must pay. Article L.145-14 of the Commercial Code opens with “Le bailleur peut refuser le renouvellement du bail.” The landlord may refuse renewal — but must, except in the narrow statutory exceptions such as legitimate repossession for rebuilding or serious tenant breach, “payer au locataire évincé une indemnité dite d’éviction égale au préjudice causé par le défaut de renouvellement”, pay the evicted tenant an eviction indemnity equal to the loss caused by the refusal. The article specifies that “Cette indemnité comprend notamment la valeur marchande du fonds de commerce”, the indemnity includes in particular the market value of the business, plus removal, reinstallation and transfer costs. For a foreign group this is real leverage: a profitable Paris location cannot simply be taken back for free, and the indemnity often exceeds a year’s rent by a wide margin. Conversely, a landlord who wants you out will scrutinise your breaches first, because unpaid rent, unauthorised subletting or persistent late payment can open the exception route and kill the indemnity. Pay on time, respect the permitted use, the destination des lieux, and keep the premises insured as the lease requires.
Unpaid rent triggers the sharpest weapon in the landlord’s drawer: the resolutory clause, the clause résolutoire, which terminates the lease automatically after a formal demand. Article L.145-41 of the Commercial Code provides that “Toute clause insérée dans le bail prévoyant la résiliation de plein droit ne produit effet qu’un mois après un commandement demeuré infructueux.” Such a clause takes effect only one month after a demand, a commandement de payer served by a commissaire de justice, that has gone unanswered. And “Le commandement doit, à peine de nullité, mentionner ce délai.” The demand must state the one-month period on pain of nullity. If your company receives a commandement, the month that follows is the most important month of the lease: pay the full arrears within it, or instruct counsel to seek payment delays from the judge, because judges may suspend the clause and grant grace periods where the tenant shows it can clear the debt and resume full rent. A foreign head office that centralises payments in London, New York or Dubai must understand this rhythm: a French commandement is not a reminder letter, it is the first step of an expulsion, and ignoring it for a month can end the lease by operation of the clause. If the landlord goes further and sues, the court can still grant delays, but only within the framework of Article 1343-5 of the Civil Code and only while no final judgment has recorded the termination.
A word on Paris and Île-de-France, where most foreign companies land first. Commercial rents, renewal values and eviction indemnities run higher than anywhere else in France, so every clause on index, charges and permitted use is negotiated harder and litigated more often. Disputes over Paris leases go to the Paris judicial court, the tribunal judiciaire de Paris, with appeals to the Paris Court of Appeal, and enforcement through local commissaires de justice who serve congés, commandements and eviction orders daily. Practical consequences: budget for the Paris premium in the renewal-rent comparables, commission a bailiff-grade entry and exit inventory rather than a friendly walk-through with photos, and keep a French-speaking point of contact who can receive service of process, because a commandement handed to the premises while headquarters are abroad still starts the one-month clock. Companies setting up with our step-by-step overview of company formation, bank account, Kbis, VAT and first hire in France often sequence the lease after the bank account and before the first hire; that order is sound, since landlords ask for the Kbis and the capital proof, and hiring into premises without a compliant lease multiplies the risk if the lease later collapses.
Conclusion
A French commercial lease is a nine-year instrument with tenant exits every three years, a short-lease alternative capped at three years in total, a rent tied to rental value and lawful indices, a framed deposit, and an exit procedure where every deadline and every form of service counts. The foreign founder who understands the 3-6-9 rhythm, refuses to drift past a short lease’s expiry, caps the deposit by statute, pays within the month of any commandement and serves a clean congé six months before each exit holds all the cards the statute intended for tenants. The founder who signs an English-style summary, chains informal short renewals or ignores a bailiff’s demand learns the same rules from the other side, usually at the price of three more years of rent or a lost location without compensation. Read the articles, diary the dates, keep every proof of payment and service, and have each notice drafted or checked before it goes out: in French commercial leases, form is substance, and the tenant who masters the form keeps the premises, the indemnity, or the freedom to leave.
Need a quick opinion on your case
You are about to sign your first shop or office lease in France, or you have just received a congé, a rent demand or a commandement from your landlord: our firm offers a telephone consultation within 48 hours with a lawyer who reviews your lease, your deadlines and your guarantees. Call Maître Reda Kohen at +33 6 46 60 58 22, or write through our contact page with your draft lease or the last document received from the landlord. We act in Paris and across Île-de-France, before the Paris courts, for foreign founders and companies setting up and operating in France.