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 to setting up your own subsidiary. 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. This is the default rule, not an absolute shield, and exceptions may apply for guarantees, abuse, asset or management confusion, direct misconduct, insolvency issues, or duty of vigilance obligations.

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), the single-member form of a SARL. The shareholder’s liability is generally limited to their contributions., 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. A single-shareholder SARL is commonly called an EURL.
  • Capital: At least EUR 1 in share capital for a SARL. Share capital is set in the articles of association and may be cash or in-kind contributions. 
  • Management: One or more individual managers (gérants). A legal entity cannot be appointed as the SARL’s gérant.

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. A single-shareholder SAS is commonly called a SASU.
  • Capital: At least EUR 1 in share capital.
  • Management: A president, who may be an individual or a legal entity. 

Branch vs. subsidiary

A branch (succursale) is a parent company’s local office. A branch (succursale) is not a separate legal entity from its parent company. The parent company is fully liable for the branch’s activities, debts, contractual obligations, employment obligations, tax liabilities, and other legal commitments 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 or online legal notices service (Journal d’Annonces Légales, or JAL).
  5. Apply online: Submit all completed documents through the official Guichet unique des formalités des entreprises online portal, operated by 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 Trade and Companies Register (Registre du commerce et des sociétés, 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 generally does not have to be a resident of France. Non-EU/EEA/Swiss nationals who will live or work in France may need appropriate immigration and work authorization.
  • 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 are generally subject to 25% withholding tax, unless reduced or exempt under a tax treaty or applicable EU rules. 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: Companies generally file annual financial statements each year. SARLs and SASs usually file approved annual accounts with the commercial court registry. 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 an employer 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 worker classification, 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.

FAQs

What is a beneficial-owner declaration and when is it required?

This declaration identifies the natural persons who ultimately own or control the French subsidiary. Report anyone holding, directly or indirectly, more than 25% of capital or voting rights, or exercising control by other means. If no individual is identifiable after due diligence, report the legal representative by default. The INPI incorporation filing generally includes this declaration. File any changes within 30 days.

When is a legal-announcement publication required for incorporation?

When setting up a subsidiary in France, you must publish an incorporation notice as part of the formation process. Place the notice in an authorized legal-announcement medium in the department of the registered office. You must include proof of publication in the registration file.

What tax registrations apply for corporate income tax and VAT?

A French subsidiary is subject to French corporate income tax on taxable profits. The standard tax rate is 25%. VAT obligations depend on taxable activities, turnover, VAT regime, and cross-border transactions. The standard VAT rate is 20%, with reduced rates applying to specified supplies. Incorporation details route to relevant authorities automatically. Supported companies must confirm the applicable tax regime, VAT activation, and VAT number with a local tax adviser or competent business tax office.

What are the key differences between a subsidiary and a branch in France?

A subsidiary — filiale — is a separate French legal entity, usually organized as an SAS or SARL. A branch — succursale — has no separate legal personality and operates as part of the foreign parent company. A subsidiary limits parent liability to its capital investment. A branch leaves the parent company directly liable for all obligations. Both structures require French registration and tax compliance, but a subsidiary maintains independent governance and annual corporate requirements.

Which legal form fits a foreign-owned subsidiary: SAS or SARL?

International groups setting up a French subsidiary often choose an SAS because it offers flexible governance, adaptable articles of association, and a single-shareholder option called an SASU. An SAS must appoint a president. An SARL has prescriptive governance rules, requires one or more natural-person managers — gérants — and generally holds 2–100 shareholders. The single-member SARL form is an EURL. The optimal form depends on governance structures, funding strategies, tax positioning, and executive social-security requirements.

How do you choose and prove a French registered office address?

A French subsidiary must maintain a registered office in France and present accepted proof of occupancy during incorporation filing. Standard proof includes a commercial lease, property deed, domiciliation agreement, or utility-style occupancy evidence accepted by the registry. You may use a legal representative's home address under specific lease, co-ownership, planning, and notification rules. Temporary domiciliation at a personal residence is limited to five years.

How do you register a French subsidiary via INPI Guichet Unique?

Complete registration online through INPI’s Guichet Unique portal. The incorporation filing typically includes:

  • Signed articles of association

  • Evidence of management appointments

  • Proof of the registered office address

  • Capital deposit certificate

  • Subscriber details

  • Legal-announcement publication certificate

  • Beneficial-owner information

  • Identity documents and sworn non-conviction statements

  • Required regulatory approvals

Once accepted, the registry enrolls the company in the RNE and RCS, issues SIREN and SIRET identifiers, and generates the Kbis extract.

What is required to appoint directors or managers for an SAS or SARL?

An SAS must appoint one president, who can be an individual or a corporate entity. A corporate president requires a permanent individual representative. An SARL must appoint one or more natural-person managers. The team must approve appointments through the articles of association or a formal corporate decision. Individual representatives submit identity documents alongside sworn non-conviction and parentage declarations. Non-EU nationals moving to live and work in France must secure immigration authorization.

What documents must a U.S. parent provide to incorporate in France?

A U.S. parent company provides certified proof of legal existence, corporate charters, and authorized board resolutions approving the French subsidiary, share subscription, and capital allocation. The filing process requires proof of signatory authority, ownership-chain records, UBO documentation, and identity verification for representatives. French registries, banks, and tax authorities may require an apostille and certified French translations depending on state jurisdiction and ownership structure.

How do you deposit share capital for a French subsidiary and get proof?

Deposit share capital with an authorized bank or notary before final incorporation. The institution issues an attestation de dépôt des fonds required for registration. At incorporation, founders must pay at least 50% of an SAS cash capital and 20% of an SARL cash capital. The team must pay the remaining balance within five years. French law sets no practical statutory minimum capital for an SAS or SARL, but companies must fund sufficient working capital for market capture. The bank releases deposited funds after registration and Kbis issuance.