You run your company from London, New York, Dubai or Singapore, and your French project has reached the point where a Paris address is no longer optional: a landlord or an agent sends you a draft lease entirely in French, for nine years, with words like tacite prolongation, congé, indemnité d’éviction and révision triennale. You wonder whether nine years really means nine years, how much cash you must wire before getting the keys, who pays the property tax and the works, what happens to the rent in year four and year ten, and whether the landlord can simply ask you to leave at the end. French commercial leases, known as baux commerciaux, answer each of these questions with mandatory rules that protect the tenant business, provided you follow the procedures on time. This article explains, in plain English and with the exact statutes and court decisions that control, how a foreign company signs its first French commercial lease from abroad: why the standard lease lasts nine years with an exit every three years, why a short-term lease can turn into a nine-year lease against your will, what to check in the draft before signing, how the rent moves through indexation and three-yearly review, how renewal and eviction compensation work, and how the termination clause and the two-year time limit operate. Paris and Île-de-France specifics run through the article, because that is where most foreign companies land first.

I. How does the 3-6-9 commercial lease work when you sign from abroad?

A. Why the nine-year lease with three-year exit rights suits a foreign company testing France

The standard French commercial lease is nicknamed the 3-6-9 lease because it combines a long minimum duration with regular exit windows for the tenant. The statute states the rule in one sentence: La durée du contrat de location ne peut être inférieure à neuf ans. Nine years is the floor, not the ceiling, and the tenant holds the key advantage: at the end of every three-year period, the tenant may walk away by giving notice at least six months in advance by registered letter with acknowledgment of receipt or by bailiff-style process-server act. For a foreign group testing the French market, this structure is genuinely useful. You secure premises long enough to build a clientele, hire and register for VAT, while keeping a contractual exit at years three and six if the numbers disappoint. The landlord, by contrast, cannot end the lease at a three-year point except in narrow statutory situations such as demolishing and rebuilding, which means your occupancy is stable as long as you pay and comply.

The protective statute applies automatically when a registered business occupies premises for commercial, industrial or craft activity. Registration here means entry in the French trade and companies register, and the proof of that registration is the Kbis extract, the company identity certificate issued by the clerk of the commercial court, called the greffe. In practice, foreign founders often negotiate the lease before the French company exists. The workable sequence is to have the identified founder sign with a clause stating stating that the company in formation takes over the lease once its Kbis is issued, then to register the company at that address and regularize the file with the landlord. What you must avoid is letting the company trade from the premises for months without completing the registration step, because the protection of the statute is tied to the tenant being a registered operator. If your project is described in more detail in the companion guide on setting up from abroad, that guide walks through the bank account, the Kbis, VAT and the first hire in sequence: Setting Up a Company in France as a Foreign Founder: Bank Account, Kbis, VAT and Your First Hire.

Two traps deserve attention before you commit. The first is the short-term lease, called the bail dérogatoire. The statute allows the parties, when the tenant first moves in, to contract out of the protective regime on one strict condition: Les parties peuvent, lors de l’entrée dans les lieux du preneur, déroger aux dispositions du présent chapitre à la condition que la durée totale du bail ou des baux successifs ne soit pas supérieure à trois ans. A one- or two-year lease looks tempting while you test the market, but the statute converts it automatically if you stay on: Si, à l’expiration de cette durée, et au plus tard à l’issue d’un délai d’un mois à compter de l’échéance le preneur reste et est laissé en possession, il s’opère un nouveau bail dont l’effet est réglé par les dispositions du présent chapitre. In plain terms, if you remain in the premises one month after the short lease expires and the landlord lets you stay, a full nine-year commercial lease is born by operation of law. Diarize the expiry date from day one and either leave, sign the long lease consciously, or negotiate in time.

The second trap is signing a document that calls itself something else while importing the statute by reference. The Court of Cassation, the highest French court for civil and commercial matters, enforces the parties’ clear choice: where the lease was labelled a commercial lease, referred expressly to the 1953 decree that is the ancestor of the statute, and the parties invoked the relevant articles during performance, the court upheld that celles-ci avaient soumis de manière volontaire et non équivoque leurs rapports contractuels au statut des baux commerciaux (Cass. 3rd civ., 30 March 2017, no. 16-11.970). The lesson for a foreign signatory is direct: read every reference inside the draft, because a lease that quotes the statute clause by clause will be treated as a commercial lease with the renewal right and the eviction compensation attached, whatever its title page says. Conversely, if you genuinely want offices outside the statute, say so expressly and check that the premises qualify, since the statute itself allows contrary stipulations for leases longer than nine years, single-use buildings, premises used exclusively as offices and certain storage premises.

Authority to sign from abroad is the last preliminary. Have the person named in the draft prove they can bind the tenant: the president of a SAS, a director with a written power, or the foreign parent acting with a formal authorization. Powers signed abroad should be clear, dated and, where the landlord or the notary asks, supported by an apostille or legalization so the French file is complete. Keep a fully signed copy, the proof of the signatory’s authority and every email negotiating the rent and the works, because French lease litigation turns on written notices and dates.

B. What to verify in the draft lease before you sign: premises, rent, deposit, charges and permitted activity

Start with the permitted activity, called the destination clause. French leases list the activities the tenant may carry on, and anything outside that list needs the landlord’s authorization. A clause limited to retail sale of clothing does not cover conversion into a restaurant, and a clause limited to back-office use does not cover receiving the public. Describe your real activity broadly at negotiation stage, including storage, after-sales service and any online order preparation, and get the wording into the lease. The rent level, the renewal value and even the eviction compensation all depend on what the premises are legally allowed to host, so a narrow clause costs money twice: when you need to change activity and when the lease is valued.

Next, inspect the premises on paper and in person through the inventory of condition, called the état des lieux. For short-term leases the statute requires a joint inventory at entry and at exit, and for a nine-year lease the same document is the evidence that decides every end-of-lease dispute about damage and reinstatement. Arrange a contradictory inventory with photographs, signed by both sides or by a process server, and attach it to the lease. Add the energy performance diagnosis, called the DPE, and the technical diagnostics the landlord must supply, and check the practical points foreign tenants discover too late: electrical capacity, ventilation and extraction if you cook or manufacture, accessibility for clients, and any planning constraints on signage in Paris, where the local town hall polices shopfronts closely. If works are promised by either side, write who pays, who authorizes, the deadline and what happens to landlord-funded works at exit.

Money before the keys follows a predictable structure. Expect a security deposit, called the dépôt de garantie, commonly equal to one quarter of a year’s rent, sometimes more for prime Paris streets, plus the first rent instalment, plus the agency fee if a broker intervened, plus VAT on rents where the landlord opted for VAT or the building is liable. Unlike residential leases, no statute caps the commercial deposit, so the amount is whatever the draft says: negotiate it and check whether the lease allows the landlord to top it up after each rent increase. Read the charges clause with equal care. The lease allocates the property tax, called the taxe foncière, the insurance of the building, the management costs and the cost of major works, and Paris leases routinely pass the property tax and the building insurance to the tenant. Ask for the last three years of charges and taxes in writing before signing, so the headline rent does not hide a second rent inside the service charges.

Two clauses shape your future freedom. The assignment and subletting clause decides whether you can sell your business with the lease or rent out spare space. Here the statute protects the tenant’s business value directly: Sont également réputées non écrites, quelle qu’en soit la forme, les conventions tendant à interdire au locataire de céder son bail ou les droits qu’il tient du présent chapitre à l’acquéreur de son fonds de commerce ou de son entreprise. Any clause forbidding assignment of the lease together with the sale of the business is treated as unwritten, which means it cannot be enforced. Subletting is different: the landlord may forbid it or condition it on consent, and an authorized sublease requires the landlord to be invited to the deed. If you plan to share Paris space with another group company, negotiate a sharing or domiciliation-compatible clause now rather than after signature. The rent-setting clause matters just as much: identify the base rent, the reference index for annual indexation, the review mechanics and the renewal method, all of which are examined in the second part of this article. Finally, confirm the insurance clause, the repairs allocation between tenant and landlord, and the jurisdiction and notification mechanics, since every notice in this field runs through a process server, now called a commissaire de justice, and deadlines are strict.

II. How do rent, renewal and eviction money work in France?

A. How your rent moves over nine years: indexation, three-yearly review and the capped renewal

French commercial rent moves through three distinct gears that foreign tenants often confuse: the annual indexation written into the lease, the three-yearly statutory review, and the renewal at expiry. Annual indexation applies the lease clause, usually tied to the commercial rents index, called the ILC, published by INSEE, the French national statistics institute, or to the tertiary activities index, called the ILAT, for offices and service premises. The clause states the reference quarter and the math, and each anniversary the rent follows the index automatically. Check the clause for a tunnel or cap that limits upward movement, because without one a sharp index rise feeds straight into your rent, and check which index applies, since applying the construction cost index to a retail lease by mistake produces the wrong rent for nine years.

The three-yearly review is a statutory right, not a clause. The statute provides that La demande en révision ne peut être formée que trois ans au moins après la date d’entrée en jouissance du locataire ou après le point de départ du bail renouvelé. Either side may therefore ask every three years for the rent to be brought into line with the rental value, called the valeur locative. The increase or decrease from such a review is itself capped by reference to the movement of the ILC or ILAT since the last fixing, unless the party seeking to escape the cap proves a material change in local commerciality factors that moved the rental value by more than ten percent by itself. In practice, reviews settle by agreement far more often than by judgment, but the request must be made in the proper form and on time, and the revised rent runs from the date of the demand. A foreign tenant that ignores a landlord’s review request for months does not stop the clock; it lets arrears accumulate from the demand date.

At expiry, the renewal rent follows the same lodestar. The statute commands that Le montant des loyers des baux renouvelés ou révisés doit correspondre à la valeur locative. Rental value is assessed on five factors: the characteristics of the premises, their permitted use, the respective obligations of the parties, local commerciality factors and current prices for comparable premises nearby. But the statute then caps the movement for leases of nine years or less: A moins d’une modification notable des éléments mentionnés aux 1° à 4° de l’article L. 145-33, the renewed rent cannot rise by more than the movement of the ILC or ILAT since the initial rent was fixed. The cap falls away, and the rent can be set without the cap at rental value, in defined cases: a lease longer than nine years, a first lease after a long vacancy in some configurations, and above all a notable modification of the premises, their use, the parties’ obligations or local commerciality. Works, a regularly authorized change of activity, or a renegotiated distribution of charges and taxes can each constitute such a modification.

The most useful warning for a foreign tenant comes from a decision about agreed rent changes during the lease. In that case the parties had settled a pending rent-review lawsuit by an amendment raising the running rent, then disagreed at renewal about whether the cap still applied. The Court of Cassation rejected the tenant’s appeal and endorsed the finding that cet avenant constitue donc une modification conventionnelle intervenue en cours de bail dans des conditions étrangères à la loi, a rent reset agreed by both sides outside any statutory procedure, which alone justified uncapping the renewal rent at full rental value (Cass. 3rd civ., 15 Feb. 2018, nos. 17-11.866 and 17-11.867). The practical message is sharp: every amendment you sign during the lease, including a friendly compromise ending a dispute, can become the landlord’s argument for uncapping at renewal. Before signing any rent amendment, ask in writing whether the parties agree it leaves the renewal cap untouched, or accept that the next renewal may be priced at full market value. Keep every amendment, every expert report and every index calculation, because the renewal judge works from documents, and a foreign company that kept its Paris file complete negotiates renewals from strength.

B. How the lease ends or continues: notice, renewal, eviction compensation and the termination clause

At the end of the nine years, the lease does not simply stop. The statute provides that Par dérogation aux articles 1736 et 1737 du code civil, 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. The landlord who wants you out must serve a notice, called a congé, at least six months before expiry, through a process server, stating whether renewal is offered or refused and, if refused, the grounds. The tenant who wants to stay serves a renewal demand in the same form and time. If neither side serves anything, the written lease continues by tacit extension, called tacite prolongation, on the same terms with the same rent adjusted by indexation, and during that extension either side may still give six months’ notice for the last day of a calendar quarter. For a team managing from abroad, the consequence is organizational: calendar the expiry minus seven months, instruct a Paris process server in writing, and keep the proof of service, because an email to the landlord is not a congé and a late notice is a void notice.

When the landlord refuses renewal, the tenant’s business is bought out through eviction compensation, called the indemnité d’éviction. The statute is blunt: Le bailleur peut refuser le renouvellement du bail. Toutefois, le bailleur doit, sauf exceptions prévues aux articles L. 145-17 et suivants, payer au locataire évincé une indemnité dite d’éviction égale au préjudice causé par le défaut de renouvellement. The compensation covers, in the statute’s own words, la valeur marchande du fonds de commerce, déterminée suivant les usages de la profession, augmentée éventuellement des frais normaux de déménagement et de réinstallation, ainsi que des frais et droits de mutation à payer pour un fonds de même valeur, sauf dans le cas où le propriétaire fait la preuve que le préjudice est moindre. The fonds de commerce is the going business attached to the premises: clientele, trade name, lease right itself, equipment and stock. For a shop on a busy Paris street its market value can exceed several years of rent, which is exactly why landlords sometimes prefer to renew rather than pay. The narrow statutory exceptions where no compensation is due, such as demolition of an unsafe building or serious tenant breach in defined cases, are interpreted strictly, and the landlord proves them.

Compensation claims die quickly if you sleep on them. The statute sets a single short time limit for the whole field: Toutes les actions exercées en vertu du présent chapitre se prescrivent par deux ans. The Court of Cassation applies this two-year prescription firmly. In a case where the landlord had served notice refusing renewal but offering compensation, the tenant waited more than two years after the court-ordered expert appraisal before claiming the money, and argued that the landlord’s own offer should have stopped the clock. The Court rejected the appeal, holding that la prescription biennale de l’article L. 145-60 du code de commerce n’est pas soumise à la contestation du droit du locataire au paiement d’une indemnité d’éviction (Cass. 3rd civ., 23 April 2013, no. 12-15.836). An offer of compensation therefore does not freeze time, and a referral to a judge for an expert appraisal interrupts the clock only until the order, not until the report. From abroad, the discipline is simple: as soon as a congé with refusal arrives, open a two-year file, seek advice immediately, and sue for the compensation within the period even while the expert works.

During the lease, unpaid rent or unperformed works trigger the termination clause, called the clause résolutoire, and here again the statute imposes a procedure the landlord cannot skip: Toute clause insérée dans le bail prévoyant la résiliation de plein droit ne produit effet qu’un mois après un commandement demeuré infructueux. Le commandement doit, à peine de nullité, mentionner ce délai. The landlord must first serve a formal payment order that states the one-month period, and only an order that remains unpaid after that month activates the clause. The tenant may apply to the judge for time to pay, and the judge can suspend the clause where the debt can realistically be cleared and current rent resumes. Precision matters on both sides: the Court of Cassation has annulled a termination order built on a payment demand that mixed maintenance and repair works without distinguishing them by nature and location, holding that the confusion prevented the tenant from understanding exactly what was ordered within the time allowed (Cass. 3rd civ., 30 March 2017, no. 16-11.970). For a foreign tenant paying from a non-French bank account, the lesson is operational: pay by traceable transfer, cure any payment order within the month even while disputing the amounts, and answer each head of claim separately in writing.

Paris and Île-de-France add their own layer. Notices are served by a local process server, disputes over rent and renewal go before the commercial rents judge of the Paris judicial court, called the tribunal judiciaire de Paris, and Paris commerciality factors, footfall, transport and tourist flows feed directly into rental value and compensation. Register the lease address as the company’s registered office, called the siège social, with the Paris trade registry through the one-stop shop, and if the company later moves across Paris or to the inner suburbs, transfer the registered office and update the Kbis, a procedure described step by step here: Your French Company Moves Its Registered Office to Paris While You Live Abroad: Greffe, BODACC and Kbis. Publications of business sales appear in the official bulletin of commercial announcements, called the BODACC, which counterparties check, so keep the names, addresses and registration numbers consistent across the lease, the Kbis and every filing. A foreign company whose lease, Kbis and tax registrations show three different addresses invites audits, refused deliveries of process and lost deadlines.

Conclusion

A French commercial lease gives a foreign company something rare: nine years of stability with an exit every three years, a renewal right backed by eviction money, and capped rent movement unless something notable really changed. Each protection runs on paperwork and dates: the six-month congé, the one-month cure period after a payment order, the three-year review rhythm and the two-year prescription that buries late compensation claims. Before signing, fix a broad activity clause, a documented inventory, a negotiated deposit and a clear allocation of taxes and works, and have the signatory’s authority in the file. During the lease, calendar every deadline from Paris time, answer every formal notice within its period even from abroad, and treat every rent amendment as a potential renewal argument. Managed that way from London, New York, Dubai or Singapore, the first Paris lease becomes what the statute intended: a business asset with a price, not a nine-year trap.