Setting up a subsidiary in France takes time, resources, and a clear understanding of local legal and tax requirements. This complexity can slow your hiring plans and lead candidates to explore other opportunities. 

G-P offers an alternative. Instead of taking the conventional subsidiary route in France, we can expedite your entry — no new entities required — so you can start operations in minutes instead of months. 

How to set up a subsidiary in France

A subsidiary (filiale) is a separate legal entity. It’s owned by a parent company but operates independently, with its own legal identity, assets, and liabilities. The subsidiary is responsible for complying with French laws, including tax, accounting, and employment regulations. The parent company’s liability is generally limited to its investment in the subsidiary.

Before you set up a subsidiary company in France, identify the type of entity you need.  Most international companies choose a private limited-liability company (société à responsabilité limitée, or SARL) or a simplified joint-stock company (société par actions simplifiée, or SAS). 

Companies with one shareholder can set up an entreprise unipersonnelle à responsabilité limitée (EURL), which translates to "single-member limited liability company."

Private limited liability company (SARL)

SARLs have a rigid legal framework with many rules set by law. SARLs must have:

  • Shareholders: 1–100 shareholders.

  • Capital: At least EUR 1 in share capital. Share capital is the money the owners or shareholders put into a company when it’s created. 

  • Management: One or more managers who are individuals (gérants), not legal entities.

Simplified joint-stock company (SAS)

A France SAS is generally easier to set up and manage. It’s popular with global investors because it offers flexibility in how the business is run and organized. They must have:

  • Shareholders: At least one shareholder.

  • Capital: At least EUR 1 in share capital.

  • Management: A president who can be a legal entity or an individual. 

Branch vs. subsidiary

A branch (succursale) is a parent company’s local office. The parent company is fully liable for the branch’s activities, debts, and obligations in France. A branch isn’t a separate legal entity — it’s an extension of the parent company. A branch must register with French authorities and comply with local regulations.

Setting up a subsidiary or a branch depends on your business goals. A subsidiary can protect your main company from risks in France, but high upkeep costs and paperwork requirements add up quickly. 

A branch is an extension of your main company in France. It’s easier and cheaper to set up, but your main company is legally responsible for everything the branch does.
 

Steps to incorporate a subsidiary in France:

  1. Draft articles of association: Prepare and sign the company’s bylaws (statuts), which define its purpose, how it’ll be run, and how it’ll operate.

  2. Deposit share capital: Open a corporate bank account in France and deposit the initial share capital. The bank will issue a certificate of deposit (certificat de dépôt des fonds) needed for registration.

  3. Secure an address: You must have a registered physical address in France. This can be achieved through a commercial lease, a domiciliation company, or by buying property.

  4. Publish a notice of incorporation: A notice with information about the new company must be published in an authorized legal journal (Journal d’Annonces Légales, or JAL).

  5. Apply online: Submit all the completed documents using the official Guichet unique online portal, managed by the National Institute of Industrial Property (INPI). The documents must include the articles of association, certificate of capital deposit, proof of address, JAL publication notice, and details about the managers or directors.

  6. Get registered: Once approved, your company will be registered with the Registry of Commerce and Companies (RCS), and you’ll receive a Kbis extract, which is the official document that proves a company’s legal existence and registration in France.

 France subsidiary laws and requirements

You have to meet several laws and requirements to set up a subsidiary company in France:

  • Management: A gérant or president doesn’t have to be a resident of France. However, non-European Economic Area or non-Swiss citizens who want to live in France and manage the company need a visa and residence permit.

  • Statutory auditor: France subsidiaries  (SAS or SARL) need a statutory auditor (commissaire aux comptes) if the company exceeds two of the following thresholds: EUR 5 million in total balance sheet, EUR 10 million in net turnover, or an average of 50 employees.

  • Taxation: Subsidiaries pay corporate income tax. Dividends paid to a non-resident parent company may have to pay withholding tax. This can be reduced or removed under double tax treaties or the EU Parent-Subsidiary Directive, which prevent the same profits from being taxed twice.

  • Reporting: All companies file annual financial statements and tax returns. They must also comply with social security and other administrative requirements. 

Advantages of France subsidiaries

  • Local presence: Establishing a subsidiary gives you a formal, recognized presence in France, which can boost credibility with clients, partners, and authorities.

  • Market access: Subsidiaries give you easier access to France and EU markets.

  • Legal separation: The subsidiary is a separate legal entity, so the parent company’s liability is limited to its investment in the subsidiary, protecting the parent’s assets.

  • Talent acquisition: Having a subsidiary lets you hire employees directly using France employment contracts, which can help attract local talent.

  • Tax benefits: Subsidiaries may benefit from local tax incentives or treaties, depending on their activities and structure.

Disadvantages of France subsidiaries

  • Complex setup: Subsidiaries involve administrative steps, legal documentation, and compliance with corporate law.

  • Ongoing compliance: Staying compliant with France’s accounting, tax, and employment regulations is a full-time job.

  • Costs: Subsidiaries come with higher startup and ongoing costs for legal, accounting, and operational support.

  • Management requirements: Although directors don’t have to be French residents, local expertise is often needed for compliance.

  • Winding down: Closing a subsidiary is time-consuming and costly due to France’s legal and administrative requirements.

Alternative to setting up a France subsidiary


G-P allows you to hire talent in minutes without the hassle of entity setup.

The benefits of using anemployer of record (EOR) in France include:

  • Faster market entry: An EOR lets you onboard talent immediately without the lengthy process of setting up a legal entity. Setting up a subsidiary can take months due to regulatory, banking, and administrative requirements.

  • Compliance assurance: Employment laws in France are complex and protect employees. An EOR ensures compliance with the Code du Travail (Labor Code), collective bargaining agreements (conventions collectives), payroll regulations, tax withholdings, and statutory benefits.

  • Cost efficiency: Setting up and maintaining SARLs has major upfront and ongoing costs, including legal fees, accounting, local management, and administrative overhead. An EOR is more cost-effective, especially if you’re hiring a small team or testing the market in France.

  • Administrative simplicity: With an EOR, you don’t have to worry about the administrative burden of managing payroll, mandatory social contributions, tax filings, and HR compliance. The EOR handles all of this, so you can focus on your business.

  • Flexibility: An EOR arrangement is easier to scale up or down compared to a subsidiary.

  • Risk mitigation: An EOR manages the legal risks associated with employment, such as workerclassification, giving you an added layer of protection.

Enter new markets with G-P — no new entities needed

Setting up a subsidiary or legal entity in France is costly and time-consuming. G-P EOR allows you to hire talent in minutes without the hassle and complications of a subsidiary.

Request a proposal today to learn more about our global employment products and EOR solutions.