A foreign group that has just incorporated a French subsidiary often wants to send an experienced employee to launch the business, train the local team or supervise the first commercial contracts. The practical question is not simply whether the employee may work from France. It is whether the arrangement is a genuine intragroup posting, a French employment relationship, or a cross-border assignment that requires a different social-security and immigration route. The answer changes who signs the employment documents, who runs payroll, who files the declarations and who bears the risk if the arrangement is challenged. For the wider incorporation sequence, see the firm’s French company formation and corporate structuring resource.

A French subsidiary may host a worker seconded by its foreign parent, but the subsidiary does not automatically become the worker’s employer. The foreign parent must retain a real employment relationship, the group must document the temporary mission, and the parties must separate employment-law compliance from social-security affiliation and tax withholding. A worker who is in practice recruited, paid and permanently directed by the French company should not be presented as a posted worker merely because the companies belong to the same group. This article sets out the decision process for foreign founders and companies, with particular attention to the first employee, the French subsidiary’s payroll obligations and the evidence that should exist before the worker starts in France.

I. Can a foreign parent lawfully post an employee to its French subsidiary?

A. Which facts distinguish an intragroup posting from a French hire?

The starting point is the identity of the employer, not the location of the desk or the entity that reimburses the cost. Article L. 1262-1 of the French Labour Code expressly states that Un employeur établi hors de France peut détacher temporairement des salariés sur le territoire national. The same article includes a posting between establishments of one business or between companies belonging to the same group. The statutory model therefore allows a foreign parent to remain the employer while its employee performs a defined mission for the French subsidiary.

Three relationships must be separated in the documents. The first is the employment contract between the foreign parent and the worker. The second is the temporary assignment or intragroup availability agreement between the parent and the French subsidiary. The third is the day-to-day operational relationship in France: the subsidiary may organise meetings, allocate tasks, control working time on its premises and apply local health-and-safety rules without necessarily becoming the legal employer. The fact that the French company gives operational instructions is important evidence, but it is not by itself decisive.

The foreign parent should remain an operating business with a genuine employment relationship. The file should show that the parent hired the worker for a real position, ordinarily carries out activities in its home state, continues to pay or administer the employment relationship, retains disciplinary and career authority, and has a credible arrangement for the end of the assignment. An assignment letter should identify the French entity, the role, the place or places of work, the start date, the anticipated end date, the reporting lines, the compensation method, the expense policy and the return or next-assignment process.

The French subsidiary should not be used as a façade for a permanent French recruitment. The Ministry of Labour describes intragroup mobility as a posting between establishments of the same company or between companies of the same group, but its guidance also warns that the service to the French entity must correspond to a real economic activity and must not exist only to justify the posting regime. A group agreement that merely says “the parent makes staff available” without describing a real project, technical contribution, training mission or management function is weak evidence. A cost recharge alone does not cure that weakness.

The case law gives two complementary warnings. In Cass. soc., 9 January 2013, no. 11-11.521, the Court of Cassation held that the breach of posting rules n’a pas pour effet de voir reconnaître la qualité d’employeur à l’entreprise établie sur le territoire national and benefiting from the posting. That ruling prevents an automatic leap from an irregular posting to the conclusion that the French host is the employer. It does not make the irregularity harmless: the parties may still face employment, social-security, immigration, tax or penalty consequences.

Conversely, the employer identity is assessed from the real organisation of the relationship. In Cass. soc., 20 October 1998, no. 95-42.531, the Court relied on the fact that the parent had taken measures concerning pay, civil-liability cover, medical and social cover, retirement and provident benefits. It observed that la société mère avait exercé son autorité sur l’intéressé et conservé un contrôle sur son activité. The case concerned a group assignment and is not a substitute for analysing the particular French operation, but it illustrates why the parent must continue to exercise real employer functions rather than disappear from the relationship.

A later decision is equally useful for drafting. In Cass. soc., 9 October 2013, no. 12-18.523, the Court examined a worker assigned to another group company. The host could direct the practical execution of the work under the applicable internal rules, while the original employer retained the contractual relationship and the possibility of reintegration. The documents in that case distinguished the host’s operational authority from the original employer’s legal status. A French subsidiary should use the same discipline: write down which decisions belong to the host and which remain with the parent.

The corporate file should also identify the French entity accurately. The INPI business-formality portal explains that the SIREN is the unique identifier of the business and the SIRET is the identifier of each establishment. INPI means the National Institute of Industrial Property. The Kbis is the official extract evidencing the registration of a commercial company with the RCS, the Commercial and Companies Register; the greffe is the court registry office that historically handled that registration. The RNE, or National Business Register, is now part of the public registration system. These identifiers should not be mixed with the foreign parent’s registration number when a payroll provider or a French administration asks who employs the worker.

The minimum evidence pack should contain the foreign employment contract, the assignment letter, a group chart, proof of the parent’s activity, the French subsidiary’s Kbis or RNE record, the intercompany agreement, the budget and cost-recharge method, the reporting chart, the pay slips, the social-security certificate or application, immigration documents and the planned end date. If the assignment is extended, the reason and the new documents should be retained. If the worker is promoted, changes role or becomes a permanent head of the French business, the group should reassess the legal model rather than continuing to renew a short assignment mechanically.

B. What must be decided before the worker enters France?

Before the worker travels, the group should make three separate decisions: the work-authorisation route, the applicable social-security legislation and the payroll and tax route. A work permit does not decide social-security affiliation. An A1 certificate does not authorise a non-European national to work in France. A group recharge does not determine who must file a DPAE or DSN. Treating these documents as interchangeable is one of the most common causes of a failed launch.

For a worker coming from an EU Member State, the European Economic Area or Switzerland, the starting social-security rule is that the worker is covered by the legislation of the state where the work is carried out, subject to the special posting rules. Article 12(1) of Regulation (EC) no. 883/2004 provides a limited exception where a person employed in one Member State is posted by that employer to another Member State, the employer normally carries out substantial activities in the first state, the anticipated mission does not exceed 24 months and the worker is not sent to replace another posted person. The relevant institution issues an A1 certificate showing which legislation applies.

The A1 route therefore requires a fact pattern, not just a form. The group should confirm that the parent conducts substantial activities in the sending state, that the worker was already genuinely connected to that employer or otherwise satisfies the applicable coordination rules, that the French mission is temporary and that the worker is not being rotated through France to avoid the ordinary territorial rule. If the worker performs habitual work in several states, the multi-state rules may apply instead. If the sending state is outside the European coordination system, the group must inspect the applicable bilateral social-security convention. The United Kingdom, the United States and other countries do not all produce the same certificate or follow identical conditions.

The importance of a valid certificate is illustrated by Cass. soc., 10 January 2018, no. 16-16.713, a decision that referred questions to the Court of Justice of the European Union in a dispute involving an E101 certificate, the predecessor of the A1. The decision records the principle that les personnes auxquelles ce règlement est applicable ne sont soumises qu’à la législation d’un seul Etat membre, while also examining whether the certificate had been obtained fraudulently. The lesson for a French subsidiary is practical: preserve the application, the certificate, the underlying employment facts and the correspondence with the competent institution. Do not treat the certificate as a substitute for accurate facts.

Where no home-state maintenance applies, the worker may fall within French social security. Article L. 243-1-2 of the French Social Security Code provides that an employer with no establishment in France may fulfil its obligations for social contributions through a single collection body. The text says that the employer remplit ses obligations relatives aux déclarations et versements des contributions et cotisations sociales through that designated body. The Urssaf Foreign Companies Service explains that an overseas company employing a worker who falls under French social security must declare and pay in France. Urssaf means the Union for the Recovery of Social Security Contributions and Family Allowances.

A French subsidiary that is itself the employer normally uses the ordinary French employer route. A foreign parent that remains the employer may need the Foreign Companies Service, often called SFE, or the TFE, the Foreign Companies Title service, where the simplified route is available. The group should obtain the employer account before the first salary cycle, confirm the French establishment or non-establishment status, identify the applicable collective agreement, and appoint a payroll contact able to answer in French to an inspection or request for documents.

Immigration is a separate gate. A non-EU national may require a work authorisation, a visa or a residence document. Service-Public’s official guidance explains that, in an intragroup posting, the application may be made by the French contracting party or the French host depending on the legal route, while the ICT route concerns a manager, expert or trainee moving within a group. ICT means Intra-Corporate Transfer. The French host must identify the correct route before the worker enters France and verify any conditions attached to the document. A1 coverage does not replace a work authorisation, and a residence card does not prove that French social contributions are not due.

Tax should be mapped separately. The withholding-at-source rules may involve the entity that pays the salary, the place where the work is performed, the worker’s tax residence and the applicable tax treaty. PAS means prélèvement à la source, or withholding at source. The official tax guidance for foreign companies states that foreign companies paying salaries taxable in France must collect and remit withholding in the situations covered by the rules. It also distinguishes the DINR, the Non-Residents Tax Department, and the SIEE, the Foreign Companies Business Tax Department. The French subsidiary should not assume that paying a recharge or a benefit automatically determines the tax withholding party.

For a manager or expert from outside the EU, the group should also test whether the mission creates a French permanent-establishment or corporate-tax issue for the parent. That assessment depends on the facts, the tax treaty and the authority exercised in France. It is not solved by labelling the worker “seconded”. The payroll memorandum should therefore identify salary payer, cost bearer, tax withholding party, social-security institution and the person responsible for each declaration.

II. How should the group run payroll, declarations and risk controls in France?

A. Who files SIPSI, DPAE, DSN and pays social contributions?

The group should use a responsibility matrix before the start date. In a genuine intragroup posting, the foreign parent is normally the employer that initiates the posting and supplies the information. The French subsidiary prepares the host details, validates the work site and role, provides the group agreement and keeps a copy of the declarations. If the French company signs a new French employment contract and becomes responsible for the employment relationship, the matrix changes: the French entity becomes the employer for the local hiring formalities and the parent becomes a group counterparty or, in some cases, a second employer.

SIPSI is the French tele-service for the declaration of international service provision. Article L. 1262-2-1 of the Labour Code requires the foreign employer in the relevant posting situations to file in advance with the labour inspectorate for the place where the service begins and to designate a representative in France. The official text says the employer adresse une déclaration, préalablement au détachement, à l’inspection du travail du lieu où débute la prestation. The French subsidiary should receive and archive the filing reference, the assignment details and the identity and acceptance of the representative.

The implementing rules make the content of the declaration concrete. Article R. 1263-3 of the Labour Code requires information about the employer, its address and legal form, the French location or locations, the dates, the client or host and the worker’s identity, qualification, job, hourly pay and anticipated end date. The official Légifrance section on articles R. 1263-3 to R. 1263-5 confirms that the declaration is sent through SIPSI. Article R. 1263-5 states that it is accomplie en langue française avant le début du détachement and must be cancelled or amended when the planned dates change. A late, generic or inconsistent form is not repaired by the fact that the parent and subsidiary have common shareholders.

The posting declaration is not the same as a DPAE. DPAE means Déclaration préalable à l’embauche, the prior hiring declaration. Article L. 1221-10 of the Labour Code provides that L’embauche d’un salarié ne peut intervenir qu’après déclaration nominative to the designated social-protection bodies. If the French subsidiary hires the worker under a French contract, it must complete the DPAE before the employment begins. If the parent merely posts an existing employee and retains the employment contract, the group should analyse whether a new French hire exists rather than automatically filing a DPAE as if the French company had recruited the person. The correct answer depends on the contract, the social-security regime and the actual employer model.

The social-security analysis determines the payroll channel. If an A1 or a bilateral certificate validly keeps the worker under the sending state’s legislation, the group must still comply with French employment-law and immigration obligations that apply to the posting. The French subsidiary should keep the certificate and the supporting facts, verify its period and record the expiry date. If French social security applies, the employer must register with the appropriate Urssaf route, report the remuneration and pay contributions. If the foreign parent has no French establishment, Article L. 243-1-2 of the Social Security Code and the Urssaf Foreign Companies Service should be reviewed before the first payslip.

DSN means Déclaration sociale nominative, or Nominative Social Declaration. Article L. 133-5-3 of the Social Security Code requires an employer of employees or assimilated workers to send a monthly declaration containing, among other information, the place of activity, the employment and contract characteristics, remuneration, contributions, working time and contract dates. The official provision begins: Tout employeur de personnel salarié ou assimilé adresse à celui des organismes mentionnés. The same text allows a correction where data sent in earlier months were inaccurate or incomplete. That correction mechanism is important when the first employee’s identity, contract status, work location or social-security status was entered incorrectly.

The normal reporting calendar should be confirmed with the payroll provider. Service-Public explains that a business with fewer than 50 employees generally files its monthly DSN by the 15th of the month following the paid work period, while larger businesses may have a 5th-of-the-month deadline depending on the payroll cycle. The payroll file should not use a French DSN merely because the worker is physically present in France if the group has not confirmed that the entity and the worker belong in that channel. Equally, a parent should not assume that a foreign payroll system removes French reporting obligations when French social security, French withholding or French employment law applies.

A useful matrix looks like this:

Question	Foreign parent remains employer	French subsidiary employs the worker
Employment contract	Foreign contract plus temporary assignment letter and group agreement.	French contract, French employer records and any required amendment or transfer documentation.
Posting status	Test Article L. 1262-1 and the intragroup route; file SIPSI when required.	Do not rely on posting language to avoid local employment formalities.
Social security	Obtain A1 or the applicable bilateral certificate, or use the French foreign-employer route if France applies.	Register and report through the French employer route.
DPAE and DSN	Analyse whether the parent or French entity is responsible and whether a French social-security declaration is required.	Complete the DPAE and the monthly DSN before and during the employment relationship.
Immigration	Check the posting, ICT or other work-authorisation route before entry.	Check the ordinary French employment authorisation route before employment starts.
Evidence	Keep the assignment, group activity, certificate, SIPSI record, pay and return documents.	Keep the French contract, payroll, employer account, work-authorisation and personnel records.

The matrix is not a legal opinion by itself. It is a control document that prevents contradictory instructions. For example, a group should not show the parent as the employer on the SIPSI form, the French subsidiary as the employer on the work-authorisation file and a third entity as the salary payer without explaining the legal reason. Each inconsistency increases the chance of a question from the labour inspectorate, Urssaf, the tax administration or a court.

Where the foreign parent is an overseas company without a French establishment but the worker is subject to French social security, the group should confirm whether the French subsidiary is an establishment for the relevant purpose or whether the foreign-parent SFE route applies. The Urssaf Foreign Companies Service guidance distinguishes an overseas company with a French establishment, which generally declares through the ordinary competent body for each establishment, from an overseas company without a French establishment that employs a worker in France. It also identifies the possibility of a single foreign-employer service and the TFE route in eligible cases.

Benefits and expenses should be documented with the same care as base salary. Housing, travel, meals, relocation, health insurance, equity awards, bonuses and tax equalisation may be treated differently for employment law, social security and tax. A reimbursement from the French subsidiary to the parent is not automatically salary, but a benefit granted to the worker may enter a contribution or tax analysis. The assignment agreement should say who authorises the expense, who pays it, whether it is recharged, how it is converted into euros and how it appears on the pay documents.

B. What French employment rights, tax and evidence must the subsidiary manage?

A posted worker does not leave French employment law at the border. Article L. 1262-4 of the Labour Code imposes equal treatment in the listed areas, including individual and collective freedoms, discrimination, maternity protection, working time, rest, public holidays, paid leave, remuneration, health and safety and illegal work. The official text requires égalité de traitement and covers payment of salary and overtime premiums. The French subsidiary should therefore compare the parent package with the French minimum and the applicable extended collective agreement, then identify any top-up or adjustment needed for the French mission.

The collective agreement is assessed from the activity performed in France and the relevant branch, not simply from the parent company’s industry label. The host should identify the activity, job classification, minimum pay, working-time rules, night work, leave, travel and expense provisions. A foreign-language employment contract may be valid in its home context but difficult to use in a French inspection. Key local instructions, safety documents and the pay explanation should be available in French where required. The worker should understand who can approve leave, report an accident, amend a schedule and end the assignment.

The twelve-month threshold requires a calendar control. Article L. 1262-4 provides that a posting exceeding twelve months becomes subject, from the thirteenth month, to additional provisions of the Labour Code applicable to French businesses, subject to the statutory exceptions. It also aggregates successive posted workers who replace one another on the same position. The group may request a motivated extension of the listed core rules for up to six additional months, but the declaration must be made before the twelve-month period expires and the reason must relate to the performance of the service. A business should set a reminder at month nine, not at month twelve, and preserve the calculation of time spent on the same position.

The French Ministry of Labour’s guidance gives examples of a justified extension connected to an unforeseen delay, such as weather or unavailable equipment, and distinguishes that from a mission planned from the outset to last more than twelve months. The extension is not a general permission to keep a permanent French position under a posting label. If the worker becomes the permanent operational head of the French subsidiary, the company should examine a French employment contract, a transfer, a local corporate office or another appropriate structure.

Health and safety responsibilities need a named owner. The French subsidiary controls the premises and should provide risk information, induction, equipment and emergency contacts. Article L. 1262-4-4 provides that Lorsqu’un salarié détaché est victime d’un accident du travail, une déclaration est envoyée à l’inspection du travail du lieu où s’est produit l’accident. The person responsible for making the declaration depends on the posting route. The host should have an accident protocol that identifies the parent, the French manager, the insurer, the labour-inspection contact and the document deadline. A failure to know who must report is a governance problem, not a reason to wait for the parent to respond from abroad.

Due diligence also applies where the arrangement involves a foreign service provider or a cross-border labour supply contract. Article L. 1262-4-1 requires the French ordering party or project owner using a service provider that posts workers to verify, before the posting, the declaration and representative obligations. If it has not received the declaration, the text provides for a subsidiary declaration within 48 hours after the start of the posting. A French subsidiary should document whether its arrangement is a pure intragroup posting, a service provision, a non-profit labour loan or temporary agency supply. The legal consequences and the party responsible for each check differ.

Administrative sanctions make the records important. Article L. 1264-1 states that breach of the obligations connected with the prior declaration, long-term posting information, accident reporting or document presentation may lead to an administrative fine under the statutory procedure. The official text of Article L. 1264-1 should be read together with the provisions fixing the amount and procedure. The French host should preserve a single indexed file containing the declaration, certificate, group agreement, employment documents, payslips, work-authorisation evidence, local safety record and correspondence about changes.

Recent case law shows why “equivalent” benefits must be real, not merely written. In Cass. soc., 19 June 2024, no. 21-20.288, concerning paid-leave and bad-weather funds in the building sector, the Court held that an employer seeking an exemption had to show not only equivalent rights but that ils peuvent être effectivement exercés dans des conditions au moins équivalentes. The decision concerns a sector-specific regime and should not be overgeneralised. It nevertheless gives a useful compliance method: verify whether the worker can actually exercise the right, who pays it, which body administers it and what document proves it.

A1 evidence should receive the same practical review. The French court’s decision in the Vueling litigation, Cass. soc., 10 January 2018, no. 16-16.713, records the need to examine the certificate and the underlying facts where fraud is alleged. A certificate with the wrong work location, an expired period, a replacement worker or a parent with no real activity may not protect the group from a reassessment. The file should show the application date, the requested period, the employee’s ordinary work, the parent’s activity, the French mission and any change notified to the institution.

The worker’s identity data must also be consistent. A passport name, residence address, French tax identifier, foreign social-security number, French NIR or temporary identifier and payroll record should be checked before the first return. NIR means the French national registration number used for social-protection identification. If the worker does not yet have a French number, the payroll provider should follow the applicable process rather than inventing a permanent identifier. Incorrect data can prevent social-protection rights from opening and can create mismatches in the DSN.

Tax withholding requires a written allocation. The company should identify whether the salary is paid by the parent, the French subsidiary or a payroll intermediary; whether a recharge is made; whether the worker is resident in France; where the services are performed; and whether a treaty changes the result. If French withholding applies, the business must register with the correct tax service and transmit the salary information through the applicable channel. The official impots.gouv.fr page for a foreign company employing workers in France provides the entry point for the foreign-company analysis. PAS, DSN and PASRAU must not be used as interchangeable labels: PAS is withholding at source, DSN is the monthly social declaration and PASRAU is the withholding declaration for certain income outside the DSN route.

The French subsidiary should also monitor the parent’s corporate-tax position. A foreign parent may have a French permanent establishment if the facts show a fixed place of business, dependent authority or another treaty criterion. A French subsidiary is a separate legal person, but the worker’s actual authority, contract negotiation, signing power, customer activity and use of premises can still matter to the parent’s tax analysis. The group’s transfer-pricing and cost-recharge documents should explain the commercial reason for the assignment and the benefit received by the French entity. They should not describe a local employee as an external service simply to make the numbers fit.

Finally, the French subsidiary should plan the end of the assignment. A fixed end date is not enough if everyone expects the worker to stay indefinitely. The file should state whether the worker returns to the parent, transfers to the French subsidiary, accepts a new French contract, changes immigration status or leaves the group. If the assignment ends early, the parent and host should record the reason, update SIPSI where required, notify the social-security institution if relevant, close or amend payroll registrations, and preserve the final payslip and tax record. If a French contract is signed, the new employment date and DPAE analysis must be handled before the change takes effect.

The legal test can be reduced to four questions for the board and the payroll provider:

1. Who is the real employer, and what facts prove that status?
2. Which country’s social-security legislation applies, and where is the A1 or bilateral certificate?
3. Which entity files SIPSI, DPAE, DSN, tax withholding and any work-authorisation application?
4. What happens at month twelve, at the end of the mission or if the worker is injured?

If the answers are documented before arrival, a foreign parent can use its French subsidiary as a genuine operational host while preserving a compliant group structure. If the answers change in practice, the group should update the documents and declarations instead of relying on the original label.

Conclusion

A French subsidiary can host a worker seconded by its foreign parent, including within a group mobility arrangement, but the operation must be built around the real employer relationship. The parent must remain a genuine employer for a temporary posting; the French subsidiary must have a real business reason and a defined operational role; and the worker must receive the French protections that apply during the mission. The social-security outcome must be established through an A1 certificate, a bilateral convention or the French foreign-employer route. It cannot be inferred from the group chart.

The safest sequence is to document the assignment, verify immigration, determine social security, file SIPSI where required, decide the DPAE and DSN route, allocate tax withholding, compare French employment rights and create month-twelve and end-of-assignment controls. If the French entity is actually recruiting and employing the person, the group should use a French employment model rather than preserving a posting label. The documents should tell the same story as the work performed in France.

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