Choosing your business establishment method
A foreign business can establish itself in France in several ways: a liaison office, branch, subsidiary, acquisition, partnership or takeover. Each option implies a different level of autonomy, responsibility and obligations.
In a nutshell
- Several methods of establishment are possible: liaison office, branch, subsidiary, acquisition of a company, purchase of a business, joint venture or takeover of an ailing business.
- The choice depends on the desired level of autonomy, the degree of financial commitment and the development objectives.
- Tax, social and accounting obligations differ depending on the form chosen and the level of activity carried out.
How to choose the appropriate business establishment method?
The choice of the business establishment method depends on several criteria:
- Degree of autonomy from the parent company.
- Accepted level of responsibility.
- Nature of the activity (commercial or non-commercial).
- Planned investment volume.
- Development prospects in France
Depending on the stage of development of the project, a business may seek a physical location, a simple representative presence or partnerships.
The most common options are opening a branch or creating a subsidiary.
What is a branch?
A branch allows a foreign business to conduct business in France without creating a legally separate entity under French law.
It constitutes an establishment of the foreign company, managed by a representative authorized to bind the parent company to third parties. It carries out the same activity as the foreign company, in premises located in France.
A branch office offers an intermediate solution: more structured than a liaison office, but less autonomous than a subsidiary. When a permanent establishment is planned, creating a French company can provide a more comprehensive framework.
- The branch does not have its own legal personality.
- The responsibility lies with the foreign parent company.
- Its activity must be identical to that of the parent company.
- It constitutes a permanent establishment in France, subject to French tax on income generated in the territory (without its own legal existence, it cannot benefit from the tax advantages available to French companies).
- The branch is subject to the taxes applicable to businesses in France, must keep accounts and register with the Trade and Companies Register (RCS).
Unlike a subsidiary, a branch has neither legal autonomy nor separate assets; it is an extension of the foreign company. Lacking legal personality under French law, it is not eligible for public subsidies.
Opening a branch requires providing:
- An extract from the registration of the foreign company, a certified copy of the current articles of association and an effective declaration of beneficiaries.
- Copies of diplomas or authorizations required if the activity is regulated.
- A copy of the branch manager’s appointment document, their identity document and residence permit, if applicable. They must also provide a sworn statement of no criminal record and of parentage.
These documents must be certified as true copies and translated into French.
The registration fee is €70 and the use of a law firm is strongly recommended.
What is a subsidiary?
The subsidiary consists of creating a French company separate from the parent company, with its own legal personality.
It represents the most structured form of establishment for developing a business in France over the long term. With its own assets, it can take various legal forms (SA, SAS, etc.).
Consult the dedicated pages to discover the different social forms and delve deeper into the main stages of company creation.
What are the different company legal structures and incorporation formalities?
Legal forms of company
Creating a company requires choosing a legal form (SA, SAS, etc.) that is appropriate for the project, the desired level of responsibility and the organization of governance.
Formalities of creation
The company becomes operational after the completion of the formalities: drafting of the articles of association, registration, deposit of capital, etc.
What are the other methods of establishing a business?
Other solutions may be considered depending on the nature of the project, the implementation schedule or the existence of opportunities already identified on the French market.
The liaison office means you can establish an initial presence in France without engaging in commercial activity, in order to:
- Make contacts with partners.
- Analyze the market.
- Promote the foreign company.
The liaison office does not have its own legal personality. Therefore, it cannot enter into contracts, invoice clients or conduct any commercial activity.
In the absence of commercial activity, as required by this status, the liaison office does not keep accounts, is not liable for taxes and is not considered a permanent establishment.
Main formalities
In principle, a liaison office does not register with the single contact system and therefore does not have a SIRET identification number or a SIRENE registration certificate. As an entity not registered with the commercial court registry, the liaison office also does not have a Kbis extract.
However, a SIRET number is mandatory for social security obligations. If the foreign headquarters does not have one, a formality must be completed on the single contact system, specifying that there are no tax obligations. Social security contributions and declarations must be made to the URSSAF “Foreign Companies Service”.
Important: the declaration on the single contact website is legally separate from registration
Acquiring a French business allows for a rapid establishment with an already structured operational activity .
The transaction typically takes the form of a share acquisition: the investor then acquires control of a company, which retains its assets and liabilities. A thorough legal, tax and financial analysis is essential before any acquisition.
Registration fees are payable, the rate of which varies depending on the nature of the securities concerned:
- Share capital (SARL): 3% of the purchase price after a deduction of €23,000.
- Shares (SAS, SA): 0.1% of the purchase price.
- Companies with a predominance of real estate assets: 5%.
The business assets include tangible elements (equipment, stocks) and intangible elements (customer base, trade name, lease rights).
Unlike the acquisition of securities, only the “asset” component is transferred.
The transfer is governed by specific rules, particularly regarding legal publicity and information for creditors and gives rise to the payment of progressive registration fees (3% from €23,001 then 5% above €200,000).
A joint venture involves partnering with one or more companies to carry out a joint project in France in order to:
- Pool resources.
- Share the risks.
- Benefit from existing expertise or network.
It can take the form of a contractual agreement or the creation of a joint entity. This solution is suitable for projects requiring strong local roots or shared investment
It is possible to acquire a business undergoing insolvency proceedings (safeguarding, reorganization or liquidation). This option can offer strategic opportunities, subject to a thorough assessment of the context and the target business.
Foreign Direct Investment screening in France (IEF)
In order to preserve security and public order, foreign investments made in France in certain sectors may be subject to a prior control procedure known as Foreign Direct Investment screening (i.e. “Contrôle des Investissements Étrangers en France” IEF)
At a glance
This page explains how to choose the appropriate business establishment method in France. It is based on institutional sources such as INPI.fr and official guidance on setting up a business in France. It presents information covering the different establishment options available to foreign companies, including liaison offices, branches, subsidiaries, acquisitions, joint ventures and takeovers, as well as their legal, tax, social and accounting implications. It uses the example of a foreign company choosing the most suitable establishment method for its development strategy, level of autonomy and business objectives in France.