Setting up in France
Subsidiary, branch or registration: the route is chosen first.
A foreign company can come to France in three ways: a French subsidiary, a branch of the foreign company, or a plain VAT registration with no establishment. The route settles who is liable, where profit is taxed and which books have to be kept.
What it coversThe form is chosen once. Changing it later costs a reorganisation.
The three routes are not equivalent. A subsidiary is a French company with its own legal personality, its own capital, its own annual accounts and its own “liasse fiscale”. A branch stays an arm of the foreign company: it is registered, keeps French books and amounts in principle to a fixed establishment. A plain VAT registration creates neither.
Then comes the corporate form. Between the “SAS” and the “SARL”, the difference lies in how free the articles are and in where the director stands. It lies above all in the director’s social security position: the president of an “SAS” falls under the general scheme, the majority manager of an “SARL” under the self-employed scheme.
We put the file together, follow it through the single registration gateway to the “Kbis” and set up what starts running on day one. We work in French, German and English.
What it covers
From the choice of route to the first filing deadline.
Subsidiary, branch or registration
The three routes set side by side on liability, tax, VAT and running cost, with a written recommendation at the end.
“SAS” or “SARL”
How much freedom the articles allow, where the director stands and how they are covered for social security. The director’s social security position is what usually decides it.
Articles and capital
Drafting the articles, depositing the capital, appointing the director and declaring the beneficial owners.
The registration file
Filing through the single gateway, a notice in an authorised legal gazette, and the parent company’s documents, translated where the registry asks for it.
The “Kbis” and the identifiers
SIREN and SIRET numbers, the activity code and the “Kbis” extract. Without them there is no bank account and no first invoice.
VAT number
Obtaining the intra-Community number and setting up the returns, including where trading starts before registration is complete.
The closing date
The closing date belongs in the articles and, where possible, on the group’s date. Changing it afterwards is expensive.
The first employee
The applicable branch agreement, the pre-hire declaration and setting up French payroll. See payroll and HR
Frequently asked
On the form, the capital and the formalities.
The questions foreign groups ask most often when they open a first structure in France.
The choice
Subsidiary or branch — what really changes?
Legal personality. A subsidiary is a separate French company, liable in principle only to the extent of its own assets. A branch binds the foreign company itself.
For tax, both are taxed in France on the profit that belongs there. A branch amounts in principle to a fixed establishment, which puts transfer pricing on the table from the start.
“SAS” or “SARL”?
The “SAS” leaves the articles a great deal of freedom, and its president is covered under the general social security scheme. The “SARL” follows a more closely written statutory framework, and its majority manager counts as self-employed.
For a subsidiary wholly owned by a foreign company, the majority-manager question does not arise, and the choice then turns mainly on how flexible the articles need to be.
Is there a minimum capital?
Neither the “SAS” nor the “SARL” requires a minimum amount, special forms aside. The figure still signals something to banks and customers, and it decides how much early loss the company can absorb.
The formalities
How long does registration take?
It is rarely the registry that holds things up. It is the parent company’s documents, their translation where one is asked for, and opening the account for the capital deposit. Those are the two things to start first.
Does the director have to live in France?
No. A non-resident director is allowed, and it is the usual arrangement for a group subsidiary. What remains to be settled is their social security position and the place where decisions are actually taken, which can bear on the company’s tax residence.
Can the closing date follow the group’s?
Yes, and it is best written into the articles from the start. The first financial year may be longer or shorter in order to reach the group date. Changing it later takes a decision, an amending entry and some effort to keep the figures comparable.
What goes with it
What starts on the day of registration.
Next
Describe what you intend
to do in France.
What you will sell, to whom, with which people on the ground and from when — that is enough to decide between a subsidiary, a branch and a plain registration. We work in French, German and English.
- FRADECO SAS · Paris
-
50, Rue Chapon · 75003 Paris
+33 1 40 09 13 77 - FRADECO GmbH · Bonn
-
Simrockstr. 92 · 53619 Rheinbreitbach
+49 2224 123 14 83