France Entity Set Up

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France Subsidiary Set Up

Global expansion into France generally means that you need to set up an in-country entity. However, by partnering with us you create the possibility to bypass this process and utilize our French entity. By using our PEO-service we take care of the complicated paperwork.

Expanding into a new country is always an adventure, but we believe this adventure should be exciting instead of just frustrating and time-consuming. Therefore, we have been supporting companies in over a hundred countries with their expansion plans.

In this guide, we will share which documents you need to establish an entity in France, but also where you will need to register your business address and company’s name. We will also break down the advantages and disadvantages of setting up an entity in France. 

Set up an entity in France

Foreign companies moving into the French economy typically choose a limited liability company, Société a Responsabilité Limitée (SARL), or a private limited liability company, Société a Responsabilité Limitée (SELARL). Other less popular options are the branch (Branche) or representative office (Bureau de Liaison).

The subsidiary is a legal entity in France and entirely independent of the foreign parent company and incorporation follows the regulations of the French Companies Code. It is incorporated as a local company and its registration must be published in the Official Gazette with all necessary documents filed at the Centre de Formalités des Enterprises.

Once the subsidiary is legally established, other crucial factors must be dealt with. Tax processing, filing accounts, legal compliance, workforce management, payroll and recruitment add up to a hefty workload.

You can lighten the burden by teaming up with Bradford Jacobs. Our Professional Employer Organization (PEO) and Employer of Record (EOR) networks locate the finest local talent and administer your payroll in France – expertly, speedily and risk free. Instead of the costs, delays, and complications of going solo, use our services and be up-and-running with a presence in your new territory within days, rather than months.

How to set up a France Subsidiary

  • Decide on the company type that suits the nature of your business and your goals. The most common choices for a foreign business to establish its subsidiary in France are the limited liability company, Société a Responsabilité Limitée (SARL), or a private limited liability company, Société a Responsabilité Limitée (SARL). A branch (Branche) or representative office (Bureau de Liaison) are other options.
  • Check the proposed subsidiary name is unique with the French Patent and Trademark Office.
  • Draft and have notarized the Articles of Association giving information including reasons for setting up the company, manager’s responsibilities, and office address.
  • Registration must be published in the Official Gazette with all necessary documents filed at the Centre de Formalités des Enterprises.
  • Obtain a Certificate of Incorporation, or ‘extrait de Kbis’.
  • Company documents must be stamped at the Commercial Court.
  • The SARL must have a resident registered agent and a registered address for official correspondence.
  • Only one director is required and between one and 50 shareholders; fewer than 25 removes the need for annual general meetings.
  • File all shareholders on the National Register (Institut National de la Propriété Industrielle, INPI).
  • Minimum share capital of one Euro must be deposited in a French corporate bank account.

Once the subsidiary is registered and before operating payroll for staff, these steps apply:

  • Apply with Form 2043 to the Ministry of Economy and Finance for employees’ individual tax numbers.
  • Register employee with their local tax office (Service des Impôts des Particuliers).
  • Register with the Agence Centrale des Organismes de Sécurité Sociale (ACOSS) so employees are covered by the five funds of the social security system, and the Unions de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales, (URSSAF), which handles social security deductions.

What you need to set up a France Subsidiary

Foreign companies setting up a subsidiary in France must meet requirements under the Commercial Code, the Civil Code and the Monetary and Financial Code. All companies in France must register with the Registry of Commerce and Companies.

The usual choices for company formation are a limited liability company, Société a Responsabilité Limitée (SARL), or a private limited liability company, Société a Responsabilité Limitée (SELARL).

Once the preferred company name has been checked with the Patent and Trademark Office, requirements include:

  • Notarized Articles of Association of the parent company giving reasons for setting up the subsidiary and proposed business activities
  • Have registration published in the Official Gazette
  • Have all commercial documents stamped at the Commercial Court
  • Obtain Certificate of Incorporation, ‘Extrait de Kbis’
  • Obtain Tax Registration Certificate
  • Appoint a resident agent and register official office address
  • File all shareholders on the National Register (Institut National de la Propriété Industrielle, INPI)
  • Minimum share capital of one Euro, which must be deposited in a French corporate bank account
  • At least one director and between one and 50 shareholders

Benefits of setting up a France Subsidiary

France has many attractions as a prime target for international expansion. Companies establishing a subsidiary will be entering one of the most powerful and diverse economies in the world and the European Union. There are close to 30,000 companies in France with foreign capital, employing over 10% of the workforce.

By establishing a subsidiary, the parent company is in an ideal geographical location to explore further expansion. France has borders with eight nations and coastlines facing the Atlantic Ocean, Mediterranean Sea and North Sea. The economy includes massive industrial and agriculture sectors, while Paris is the European Union’s leading financial center and ranks above both London and New York for cities that are home to the most Top 500 businesses.

Benefits of setting up a subsidiary include:

  1. The subsidiary is a separate legal entity from its parent company
  2. The subsidiary has the flexibility to operate under its own business name and pursue independent business activities once it has obtained relevant licenses
  3. The subsidiary has the same legal standing as local companies and can be eligible for French Government tax incentives and benefits
  4. Companies operating a limited liability subsidiary are not liable for specific share capital requirements other than issuing a minimum of one Euro
  5. The parent company is not liable for the obligations and debts of the subsidiary

France Subsidiary Laws

Companies expanding into France will typically set up either a limited liability company Société a Responsabilité Limitée (SARL), or a private limited liability company, Société a Responsabilité Limitée (SELARL). They must meet requirements under the Commercial Code, the Civil Code and the Monetary and Financial Code.

Registration and Documentation:

  • A limited liability company must have at least one director and between one and 50 shareholders and they must be named in the National Register (Institut National de la Propriété Industrielle, INPI).
  • All companies in France must register with the Registry of Commerce and Companies.
  • Certificate of Incorporation, ‘extrait de Kbis’.
  • Registration must be published in the Official Gazette with all necessary documents filed at the Centre de Formalités des Enterprises.
  • All commercial documents must be stamped at the Commercial Court.
  • Notarized Articles of Association of the parent company must be supplied, giving reasons for setting up the subsidiary and proposed business activities.
  • Must obtain a Tax Registration Certificate.
  • Must register a representative and office address.

Accounts and Taxation:

  • Entities are subject to 26.5% Corporation Income Tax (CIT) for 2021, due to be cut to 25% in 2022.
  • File CIT returns by April 15 of the following year.
  • Register with the Tax Administration and Ministry of Economy and Finance.
  • Register for Value Added Tax with the Service des Impôts des Entreprises (CGI) within two weeks of starting trading.
  • Dividend income is taxed at 12.8% or at general tax rates after deducting 40% for company tax already paid.
  • Withholding Tax of 30% is applied to dividends paid to non-resident individuals or companies.

Management:

  • Annual general meetings are not required if there are fewer than 25 shareholders.
  • Company directors who are residents of European Union, European Economic Area nations or Switzerland can operate as directors on the same basis as French residents. Others must apply for a residence permit.

Take a faster route into the French economy

The cost-effective and time-saving alternative to the expensive and lengthy process of establishing your subsidiary in France is to work alongside a Professional Employer Organization (PEO) and Employer of Record (EOR) such as Bradford Jacobs.

We have over 20 years of global experience and our in-country specialists and Human Resources experts will steer you through the complexities of setting up operations by onboarding new employees, then ensuring compliance with all employment and tax regulations.

There is no reason for international borders to stand in the way of your international expansion. Contact us today to make your expansion goals a reality, with ease and confidence.