You run a company in London, New York, Dubai or Singapore, and France has just become unavoidable. A French client wants invoices with French VAT, a Paris partner wants a contract with a French entity, or you need to hire one person in Lyon next month. Your adviser back home says open a branch, your French contact says create an SAS, and your bank says it cannot open anything until you show a Kbis. Each option sounds simple until you discover what it really allocates: who is liable when something goes wrong, how fast you can invoice, whether you can hire, and how painful the exit will be. This guide gives foreign founders the full decision in one place. It explains every French acronym in plain English, quotes the exact statutes a French court would apply, and ends with the concrete steps you can run from abroad. Read it before you sign a domiciliation contract or wire share capital to France.

I. What French Law Really Creates When You Choose a Branch or a Subsidiary

The first mistake is vocabulary. In ordinary business English, branch and subsidiary sound like two flavours of the same thing. Under French law they belong to two different worlds. A branch, called a succursale in French, is not a French company at all. A subsidiary, called a filiale, is a French company in its own right, most often an SAS or a SARL owned by your foreign company. Everything flows from that distinction: liability, registration, bank account, tax, employment and closure.

A. The Branch (Succursale): Your Foreign Company Acting in France Under Its Own Name

A succursale is an establishment that a foreign company registers in France to do business directly, without creating a new legal person. There is no French share capital, no French articles of association in the corporate sense, and no French shareholders. The branch trades under the name of the foreign parent, signs contracts in the name of the foreign parent, and sues or gets sued through the foreign parent. The practical consequence is blunt: every debt, every employment claim and every tax reassessment that arises from the French activity attaches to the foreign company itself, on all of its assets, wherever they sit. If the Lyon operation fails, the creditor does not stop at the Lyon office. It pursues the London or Delaware parent.

That exposure is the price of speed and simplicity. Because no new company is formed, there is no capital to deposit in a blocked bank account and no French shareholders meeting to organise. The foreign company files for registration of its French establishment with the French trade register, and that registration produces proof of existence that banks and clients recognise. French commercial law provides that a trade and companies register exists to record businesses on the basis of their declarations, since Il est tenu un registre du commerce et des sociétés auquel sont immatriculés, sur leur déclaration the persons and entities the statute lists (Article L123-1 of the Commercial Code, in force, verified 14 September 2026). In practice today that filing runs through the Guichet unique, the single online business filing portal operated by the INPI, the French National Institute of Industrial Property, which forwards the file to the greffe, the clerk office of the local commercial court that keeps the RCS, the Registre du commerce et des sociétés. Once recorded, the branch appears in the French company register and the parent can request a Kbis extract, the official identity card of a French registered business issued and signed by the greffe, showing the SIREN number, the French national business identifier, the address, the activity and the persons empowered to act.

Three limits then appear, and foreign founders discover them in the wrong order. First, the bank. A branch has no capital of its own to deposit, which removes one classic blocking point, but French banks still run full know-your-customer checks on the foreign parent, its directors and its beneficial owners, and they routinely ask for the parent accounts, the foreign certificate of good standing with a sworn translation, and the French registration proof before opening a euro account in the name of the branch. Expect the same documentary friction as for a subsidiary, without the signalling value of paid-up French capital. Second, VAT. The branch is not a shortcut around French VAT registration. As soon as it makes taxable supplies of goods or services in France for consideration, it needs a French VAT number and must handle French VAT returns, and clients will ask for that number before paying the first invoice. Third, employment. A branch can hire in France, but it hires as the foreign company, which means the foreign parent becomes a French employer registered with URSSAF, the French social security collection agency, and must run French payroll, French payslips and the DPAE, the Déclaration préalable à l embauche, the mandatory pre-hiring declaration filed before any employee starts. Dismissal, working time and collective rules then apply exactly as they would to a French company, while the parent board abroad keeps full liability for any breach.

Tax completes the picture. A French branch of a foreign company is generally subject to French corporate tax, called IS for Impôt sur les sociétés, on the profits attributable to the French establishment, because French tax law provides that, sont passibles de l impôt sur les sociétés, quel que soit leur objet, the companies the statute lists (Article 206 of the General Tax Code, in force, verified 14 September 2026). The standard rate is stated in one short sentence that every founder should memorise: Le taux normal de l impôt est fixé à 25 %. (Article 219 of the General Tax Code, in force, verified 14 September 2026). Profits can in principle be remitted to the head office without a dividend vote, which some groups like, but transfer pricing documentation, branch accounts and the risk of reclassification of head office charges keep the compliance load real. And when the adventure ends, closing a branch still means deregistering, settling French tax and social liabilities, and informing creditors, with the parent remaining answerable for anything left behind. The branch is therefore a rational choice in exactly two situations: testing the French market for a short period with one or two people and no significant contracts, or operating an activity that must legally remain part of the foreign entity, such as certain regulated networks. Everywhere else, the absence of a liability shield makes it the brave option, not the cheap one.

B. The French Subsidiary (Filiale): An SAS or SARL With Its Own Personality, Its Own Kbis and Its Own Shield

A filiale is a French company whose shares are held, wholly or partly, by your foreign company. The decisive legal event is stated in one sentence: Les sociétés commerciales jouissent de la personnalité morale à dater de leur immatriculation au registre du commerce et des sociétés. (Article L210-6 of the Commercial Code, in force, verified 14 September 2026). From the day the greffe records it in the RCS, the subsidiary is a person in law, distinct from its foreign shareholder. It owns its assets, signs its contracts, hires its employees, pays its taxes and answers for its debts on its own balance sheet. The foreign parent normally risks only the money it put in. That shield holds only if you respect it, meaning separate accounts, documented intra-group agreements, arm s length pricing and no confusion of assets, but it is the reason almost every lasting French presence of a foreign group takes the subsidiary form.

Foreign founders then face the second choice, SAS versus SARL, and here French law gives two genuinely different instruments. The SAS, the Société par actions simplifiée, simplified joint-stock company, is defined by freedom and limited risk in a single breath: Une société par actions simplifiée peut être instituée par une ou plusieurs personnes qui ne supportent les pertes qu à concurrence de leur apport. (Article L227-1 of the Commercial Code, in force, verified 14 September 2026). One shareholder is enough, including a foreign company, and the statutes organise governance almost freely: a president is mandatory, and the rest, deputy general managers, committees, veto rights, reinforced majorities, admission and exclusion clauses, is tailor-made. That flexibility is why venture-backed startups, joint ventures and foreign subsidiaries default to the SAS. Representation of the company toward third parties follows a rule every founder should read twice: La société est représentée à l égard des tiers par un président désigné dans les conditions prévues par les statuts. and Le président est investi des pouvoirs les plus étendus pour agir en toute circonstance au nom de la société dans la limite de l objet social. (Article L227-6 of the Commercial Code, in force, verified 14 September 2026). Toward third parties the company is bound even by acts beyond its corporate purpose unless it proves the third party knew, and internal limits on the president cannot be invoked against outsiders, since Les dispositions statutaires limitant les pouvoirs du président sont inopposables aux tiers. (same article). In plain terms, whoever you name president can commit the company, so the foreign parent must control appointments, bank mandates and delegations from day one rather than discovering the rule during a dispute.

The SARL, the Société à responsabilité limitée, limited liability company, offers the same shield in a more rigid and often cheaper frame: La société à responsabilité limitée est instituée par une ou plusieurs personnes qui ne supportent les pertes qu à concurrence de leurs apports. (Article L223-1 of the Commercial Code, in force, verified 14 September 2026). It is managed by one or more gérants, individual managers, since La société à responsabilité limitée est gérée par une ou plusieurs personnes physiques. (Article L223-18 of the Commercial Code, in force, verified 14 September 2026). Transfers of shares to outsiders require an approval procedure, governance follows the statute more than the contract, and the gérant of a majority-held SARL falls under the self-employed social regime rather than the employee-like regime of an SAS president, which changes the cost of paying yourself. Capital calls are also lighter than founders fear: cash contributions must be released, paid up, only up to one fifth at incorporation, since Les parts représentant des apports en numéraire doivent être libérées d au moins un cinquième de leur montant. (Article L223-7 of the Commercial Code, in force, verified 14 September 2026), with the balance due within five years. For a small family business, a single consultant or a subsidiary that will stay small, the SARL remains perfectly respectable. For anything that may raise funds, grant stock options, bring in co-founders or be sold, the SAS wins, because investors know its mechanics and acquirers prefer its shares.

Control is where foreign parents feel the difference most sharply, and case law gives a vivid warning. When a foreign group owns the whole French subsidiary, it can remove a manager who no longer has its confidence, but it must follow the correct body and let the person speak first. In a widely cited commercial ruling, the Cour de cassation, the French supreme court for civil and commercial matters, held on 9 March 2010, appeal number 09-11.631, concerning the French SARL Oetiker, wholly owned subsidiary of the Swiss company Inter Clamp, that dans le cas où la société ne comporte qu un seul associé, celui-ci est habile à prendre la décision de révoquer le gérant non associé aux lieu et place de l assemblée des associés. The sole shareholder decides alone instead of a shareholders meeting, but the manager must have been informed of the planned removal and given the chance to comment before the decision. The statute behind that solution is equally direct: Le gérant peut être révoqué par décision des associés dans les conditions de l article L. 223-29, à moins que les statuts prévoient une majorité plus forte. and Si la révocation est décidée sans juste motif, elle peut donner lieu à des dommages et intérêts. (Article L223-25 of the Commercial Code, in force, verified 14 September 2026). Foreign groups should diary two lessons: removal without a fair ground, juste motif, does not cancel the removal but can cost damages, and a brutal process, no notice, no hearing, ambush vote, can turn a lawful removal into an abusive one that a court will price. Draft the subsidiary statutes in English and French from the start, keep written minutes of every shareholder decision, and never remove a French manager by a one-line email from head office.

II. How a Foreign Founder Chooses and Gets Registered From Abroad Without Losing Weeks

Theory decides little by itself. Founders decide under pressure, with a client waiting, a hire to onboard and a bank asking for documents nobody warned them about. This second part turns the legal distinction into a decision you can defend to your board and a timetable you can run from abroad.

A. The Decision Grid Most Advisers Skip: Liability, Capital, Bank, VAT, Hiring, Tax and Exit

Start with liability, because it dwarfs everything else once trouble arrives. With a branch, the foreign parent answers for French debts with all of its assets. A Paris employment tribunal award, a supplier judgment or a French tax reassessment is enforced against the parent company, and in cross-border cases creditors know how to follow the money home through European enforcement instruments. With a subsidiary, the parent’s exposure stops in principle at its capital contribution and its shareholder loans, provided it has not given a parent guarantee, comfort letter or cash-pooling arrangement that recreates the liability it wanted to avoid. Banks know this perfectly well, which is why they ask foreign parents for guarantees precisely when the subsidiary is new and thinly capitalised. Read every guarantee before you sign it: a first-demand guarantee for the full overdraft wipes out in one signature the shield you paid a lawyer to build. If the French project involves employees, stock, leases or regulated risk, the subsidiary is not a luxury, it is the structure that lets the group survive a French failure.

Capital and cost come second, and the comparison surprises many founders. The branch requires no share capital, which looks free until the hidden costs land: sworn translations of the parent statutes and accounts, legal opinions for the bank, and the management time of a board that must approve every French step directly. The subsidiary requires capital, but the threshold is low and the mechanics are friendly. An SAS can be formed with one euro of capital in theory, though no serious bank or landlord takes a one-euro company seriously, and most foreign founders incorporate with five to thirty thousand euros depending on the lease, the payroll and the credibility they need. Cash contributions to an SARL need only one fifth paid up at signing, with the balance callable over five years, which lets you show a solid nominal capital while wiring less cash on day one. The capital must be deposited before registration into a blocked account with a French bank, a notary or the Caisse des dépôts, the French public deposits institution, which issues the deposit certificate the greffe requires. That deposit step is where foreign timelines die: banks ask for the draft statutes, the parent chain of ownership, the identity and address proof of every beneficial owner, and the domiciliation lease before they open the blocked account. Start the bank file the same day you instruct the lawyer, not after the statutes are final, and keep a second bank in reserve in case compliance stalls.

Banking and credibility decide the daily life of the structure. A subsidiary with its own Kbis, its own SIREN and its own deposited capital opens operating accounts, negotiates an overdraft, leases offices and passes supplier referencing far more easily than a branch whose French extract points back to a foreign company the credit insurer cannot score. Some founders try to operate France from the foreign account with the branch as a billing address, then discover that French clients deduct withholding, refuse to pay VAT to a foreign IBAN, or demand the French VAT number that only a registered establishment obtains. Budget two to six weeks for the operating account even after registration, keep the foreign account funding the French launch, and never promise a client a French invoice date that depends on the bank. If a bank refuses to open an account at all, French law provides a right to an account, the droit au compte, through designation by the Banque de France, the French central bank, but that emergency lane gives a basic account, not a full corporate facility, so treat it as a parachute, not a plan.

VAT and invoicing are the next filter. Both a branch and a subsidiary that carry out taxable transactions in France must charge French VAT, file French VAT returns, the CA3 monthly or quarterly return, and answer to the SIE, the Service des impôts des entreprises, the local corporate tax office. The difference is operational, not theoretical. A subsidiary receives its French VAT number automatically in the registration flow and invoices from day one under its own name, which French clients process without questions. A branch can do the same, but its invoices carry the parent name with a French branch mention, and some clients and marketplaces handle that format badly, delaying payment while their vendor master data team asks for documents. If you only sell to France from abroad without any French establishment, you may need a French VAT number anyway once you cross distance-selling thresholds or hold stock in France, and the e-invoicing reform progressively requires structured electronic invoices and real-time reporting, so the question is rarely whether to register for VAT, only which vehicle carries the number. Founders who plan to invoice quickly should therefore weight the choice toward the vehicle whose paperwork their clients already accept, which in practice means the SAS subsidiary.

Hiring is where the branch quietly becomes expensive. French employment law applies in full from the first hire, whatever the vehicle: written contract in French, trial period with statutory maximums, payslip with social contributions, DPAE filed with URSSAF before the start date, occupational health cover, and dismissal rules that punish improvisation. A subsidiary hires as a French employer with its own URSSAF account, which payroll providers process routinely. A branch hires as the foreign company, which must first register as a foreign employer in France, obtain French employer identifiers, and explain to every hire why the payslip shows a London or New York employer. Candidates notice, staff representative thresholds count the branch headcount the same way, and any collective dispute lands directly on the parent board. The social status of the manager adds a second layer. The president of an SAS is an assimilé salarié, treated like an employee for social security without unemployment cover, affiliated to the general scheme and paid through payroll with payslips. The majority gérant of a SARL is a TNS, a travailleur non salarié, a self-employed person under the independent scheme with lower headline charges and weaker cover. A foreign founder who moves to France to run the business, or who appoints a local manager, must model both routes with an accountant before choosing SAS or SARL, because the wrong box costs thousands of euros a year and cannot be fixed retroactively.

Tax and exit close the grid. Both vehicles pay IS at 25 percent on French profits, file the same corporate returns and face the same audit risk, with transfer pricing scrutiny added for intra-group flows. The subsidiary adds dividend mechanics: profits are approved in the French accounts, distributed by shareholder vote, and paid to the foreign parent potentially subject to withholding tax, reducible under European directives and tax treaties, while the branch remits profits to head office without a dividend vote but documents everything through branch accounts. Neither route avoids French tax on French profit, and any adviser promising otherwise is selling risk, not planning. On exit, the ranking reverses the entry ranking. A branch closes by deregistration and settlement, which is administratively lighter but leaves the parent exposed for tail liabilities. A subsidiary closes through dissolution and liquidation, with a liquidator, creditor notices in a legal gazette, tax clearance and removal of the Kbis, which takes months but draws a clean line under the adventure. Groups that may sell the French business strongly prefer the subsidiary, because selling shares in an SAS is a standard deal while selling a branch is an asset transfer with client consents, employee transfer rules and a heavier tax bill. Score the seven criteria honestly, and most lasting projects converge on the same answer: branch to test for a few months with minimal commitment, SAS subsidiary to operate, hire, borrow and grow, SARL subsidiary only for small closely held businesses that will never raise capital.

B. The Execution Path From Abroad: Domiciliation, Statutes, Capital Deposit, Guichet Unique, Kbis, RBE, VAT and First Payroll

Once the vehicle is chosen, execution is a chain where each link has its own delay, and the critical path runs through the bank. Week one belongs to domiciliation and identity. No registration without a French registered address, the siège social for a subsidiary or the branch address for a succursale. Foreign founders use a domiciliation company, a regulated address provider, a business centre, or the future office lease, and the greffe checks the proof: domiciliation contract with approval number, lease or title deed, plus a recent utility bill in the right name. Collect identity files in parallel for every person in the chain: passport, proof of home address under three months, and for the foreign parent, certificate of incorporation, current statutes and register extract with sworn French translations, plus an organisation chart up to the ultimate beneficial owners. France requires disclosure of beneficial owners, the RBE, the Registre des bénéficiaires effectifs, the register of natural persons ultimately owning or controlling the company, filed with the greffe at incorporation and updated whenever control changes. Missing translations and expired proofs of address cause more rejections than any legal subtlety, so date-stamp every document and renew anything older than three months before filing.

Week two belongs to the statutes and the money. For an SAS subsidiary, the lawyer drafts bilingual statutes that fix the share capital, the contributions, the president and any general managers, the decision rules, share transfer restrictions and the financial year, together with the shareholder decisions of the foreign parent authorising the investment and appointing the president. For an SARL, the statutes name the gérant and set the approval clause for transfers. The signed funds are then wired to the blocked capital account, and the depositary issues the certificate listing each subscriber and the sums paid. Two practical points save weeks here. First, the name of the foreign shareholder on the wire must match the subscriber name in the statutes to the letter, including the legal suffix Ltd, LLC, Inc or GmbH, or the bank issues the certificate with a discrepancy the greffe rejects. Second, the shareholder decision should authorise a slightly higher capital than strictly needed, because amending statutes to increase capital after a failed deposit restarts the whole bank loop. Keep the draft statutes, the parent board minutes and the funds transfer proof in one file: the Guichet unique reviewer, the bank compliance officer and the accountant will each ask for the same three documents within days of each other.

Week three belongs to filing and proof. The complete file goes to the Guichet unique run by the INPI, which has replaced the old direct filings at the greffe counters: identity of founders and managers, statutes, capital certificate, domiciliation proof, beneficial owner declaration, parent documents with translations, and the announcement of incorporation in a legal gazette, the publication in a journal d annonces légales that must precede or accompany registration. The greffe reviews, registers the company in the RCS and issues the Kbis, while INSEE, the French statistics institute, assigns the SIREN and SIRET numbers and the SIE activates the VAT number. Publication in the BODACC, the Bulletin officiel des annonces civiles et commerciales, the official gazette where company registrations are published, follows automatically. From abroad, the founder tracks the file through the Guichet unique dashboard and answers reviewer queries within hours, because a file left unanswered for a week slides to the bottom of the queue and the capital stays blocked meanwhile. As soon as the Kbis arrives, unblock the capital into the operating account, or open that operating account immediately if the deposit bank cannot convert the blocked account fast enough, register the company with URSSAF as an employer even before the first hire so the payroll identifiers exist, and file the first VAT return on time even if it shows no movement, because a missing first return triggers the penalty correspondence that haunts young companies.

The final stretch is discipline, not paperwork. Calendar the French legal year on day one: approve the annual accounts within six months of year-end, file them with the greffe within one month of approval, or two if filed online, pay each IS instalment, acompte, on its due date, and file each CA3 VAT return in its month. Keep the shareholder register, the minutes book and the beneficial owner information current, because buyers, banks and auditors ask for them in every transaction and stale records read as risk. If the subsidiary will invoice foreign clients, confirm the VAT place-of-supply rules with the accountant before the first cross-border invoice rather than correcting a year of invoices under audit pressure. If the branch route was chosen for a trial period, set a written trigger for conversion, such as headcount, revenue or lease signature, beyond which the group creates the subsidiary and transfers the activity cleanly instead of letting the branch grow into a liability it was never meant to carry. Foreign founders who run this path with a French lawyer and a French accountant, each instructed in week one and copied on every filing, typically register within three to five weeks from complete documents. Those who improvise learn the same lesson every time: in France, the fastest incorporation is the one filed correctly the first time.

Conclusion

A foreign company that wants a durable French presence should in most cases create a French subsidiary, and in most of those cases that subsidiary should be an SAS. The branch keeps its uses for a short test or a legally integrated operation, but it offers no liability shield, no hiring advantage and no banking shortcut once the real checks begin. The SARL keeps its place for small closely held projects with no fundraising horizon. Whatever you choose, decide on liability first, price the bank and VAT frictions second, and file once, completely, through the Guichet unique with translations and proofs that match to the letter. France rewards founders who respect its registers: the Kbis opens the bank, the VAT number opens the clients, and clean minutes protect the parent when managers change.

Need a quick opinion on your case

Foreign founder setting up or restructuring in France: get a telephone consultation within 48 hours with a lawyer of the firm. Call +33 6 46 60 58 22 or write via the contact form. For related reading, see our practical guides on setting up a company in France as a foreign founder and on French corporate tax for foreign owners.