You run a company in London, New York, Dubai or Singapore and France is your next market. A French distributor asks for a local invoice with French VAT, a client wants a contract governed by French law with a Paris address on it, and your bank at home starts asking questions about the nature of your French revenue. Your adviser back home suggests opening a branch because it looks cheap and fast, while a French contact warns you that a subsidiary protects the parent but takes longer and costs more. Both are partly right and both omit the decisive points. A branch (succursale) has no legal personality of its own, so every French debt is your company’s debt, yet it must still be registered with the French Trade and Companies Register, file documents in French, and pay French corporate tax on its French profits. A subsidiary (filiale), usually a simplified joint-stock company (société par actions simplifiée, SAS) or a limited liability company (société à responsabilité limitée, SARL), is a separate French person in law from the day it is registered, yet you remain personally exposed for everything you sign before that registration, and the French tax administration can treat an unregistered continuous activity as a taxable presence anyway. This article gives foreign founders and foreign groups the complete decision path: how liability really differs between a branch and a subsidiary, how each is registered from abroad through the single online portal with the registry office of the commercial court, how the corporate bank account is opened when no founder lives in France, how French corporate tax catches both structures including through the hidden permanent establishment, and what to do when the registry, the bank or the tax office says no. Every French acronym is explained on first use, every decisive rule is tied to its official text, and every remedy is described for a reader who lives outside France.
I. How a foreign parent chooses between a French branch and a French subsidiary: liability, registration and the bank account
A. Liability first: the branch exposes the foreign parent directly while the subsidiary shields it, within documented limits
The first question is who pays when things go wrong, and French law answers it with the concept of legal personality (personnalité morale). A French subsidiary is a new legal person, distinct from its foreign shareholder. The rule is stated in identical terms for commercial companies and for companies in general: Article L210-6 of the Commercial Code provides that commercial companies enjoy legal personality from the date of their registration with the Trade and Companies Register, in the exact words “Les sociétés commerciales jouissent de la personnalité morale à dater de leur immatriculation au registre du commerce et des sociétés”, and Article 1842 of the Civil Code confirms that companies enjoy legal personality from their registration. In practice this means that once your SAS or SARL is registered and has received its Kbis extract (the official identity card of a French company, issued by the registry office of the commercial court, called the greffe), only the subsidiary answers for its debts, and a French creditor cannot seize the foreign parent’s accounts simply because it owns the shares. That shield is the main commercial reason groups choose a subsidiary when they will sign leases, borrow, hire staff or take on regulated obligations in France.
A branch is the opposite construction. It is a secondary establishment of your existing foreign company, not a new person. It can invoice, hire and be sued in France, but every contract signed by the branch binds the foreign parent directly, without limit, and a French judgment against the branch is enforced against the parent’s assets. There is no capital to liberate and no shareholder liability cap because there are no shares: the branch is you, operating under your name with the words “succursale” added. Founders sometimes choose the branch to test the market for twelve to twenty-four months, keep a single set of accounts at home, and avoid the cost of running a second board. That logic holds only while the exposure stays modest. The day the branch signs a multi-year commercial lease, takes a bank loan, or faces a claim for defective products or unpaid social contributions, the parent discovers that the cheap structure was the expensive one. As a working rule, use a branch for prospecting and representation with no significant contracts, and a subsidiary as soon as the French activity signs, borrows, employs or risks.
Two limits of the subsidiary shield matter before you choose. The first concerns the period before registration. Between the signing of the articles and the issue of the Kbis extract, the company does not yet exist as a person, and anyone who acts in its name is personally and jointly liable. The same Article L210-6 warns that persons who acted in the name of a company in formation before it acquired legal personality are jointly and indefinitely liable for the acts performed, unless the company, once duly formed and registered, takes over the commitments, which are then deemed subscribed from the beginning by the company. The Court of Cassation applied this mechanism in a widely noted commercial lease case: on 28 April 2016 a lessor signed a lease with a company described as in formation together with founders acting jointly, the company was registered on 15 June 2016, and the dispute turned on whether the lease could bind the company at all. In its judgment of 29 November 2023, appeal number 22-18.295, published under reference ECLI:FR:CCASS:2023:CO00758, the Commercial Chamber recalled the governing principle word for word: “Il résulte de ces textes que les sociétés commerciales jouissent de la personnalité morale à dater de leur immatriculation au registre du commerce et des sociétés. Les personnes qui ont agi au nom ou pour le compte d’une société en formation avant qu’elle ait acquis la jouissance de la personnalité morale sont tenues solidairement et indéfiniment responsables des actes ainsi accomplis, à moins que la société, après avoir été régulièrement constituée et immatriculée, ne reprenne les engagements souscrits. Ces engagements sont alors réputés avoir été souscrits dès l’origine par la société.” The same judgment then softened the old formalism: whereas the courts used to require the words “in the name of” or “on behalf of” the company in formation expressly in the document, judges may now examine all the circumstances, inside and outside the document, to decide whether the common intention of the parties was that the act be concluded for the company, which can then take it over after registration. For a foreign founder this is both a relief and a warning. Sign every pre-registration document, lease, bank form and supplier contract expressly in the name of or on behalf of the company in formation, list those acts in an annex to the articles or in a shareholders’ decision at incorporation, and have the new company formally take them over on registration. A takeover clause drafted at home without the French wording has already cost founders their personal liability shield.
The second limit concerns management from abroad after registration. The subsidiary protects the shareholder, not a director who mismanages. A foreign president of a SAS or manager (gérant) of a SARL who continues a loss-making activity with no prospect, mixes personal and company funds, or ignores tax and social filings can be held personally liable for the shortfall in insolvency proceedings, and criminal liability for undeclared work or tax fraud follows the actual decision-maker wherever that person lives. The branch offers no protection even at shareholder level, as explained above. The practical conclusion is identical for both structures: keep written board records, keep the French accounts current, and never let the French presence trade while knowingly unable to pay.
When the subsidiary is chosen, the SAS or SARL decision comes next. Article L227-1 of the Commercial Code states that a simplified joint-stock company may be formed by one or more persons who bear losses only up to their contributions, in the words “Une société par actions simplifiée peut être instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leur apport”, and Article L223-1 gives the limited liability company the same architecture: “La société à responsabilité limitée est instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leurs apports.” Foreign investors almost always prefer the SAS with a single shareholder (SASU) because the articles can allocate powers flexibly, organise remote decisions in English, and admit future investors with preferred shares, while the SARL imposes a more rigid statutory framework with stronger minority protections that suit family businesses better than venture-backed expansion. Nothing prevents starting as a SASU with a symbolic capital of one euro, then increasing capital once the bank account works and the first contracts are signed. If you are still hesitating between all four vehicles, read first our comparison guide SAS vs SARL vs Branch vs Subsidiary: How a Foreign Founder Chooses the Right French Vehicle, which serves as the hub of this cluster, then apply the registration steps below to the vehicle you retain.
B. Registering from abroad: the single window, the Trade Register entry, the Kbis extract and the corporate bank account
Registration is the same doorway for a branch and a subsidiary, and it is entirely online. Since the reform of business formalities, every creation, modification or closure passes through one electronic file lodged with the single body designated for that purpose, the single window (guichet unique) operated by the National Institute of Industrial Property (Institut national de la propriété industrielle, INPI). Article L123-33 of the Commercial Code requires this single electronic filing, providing that the file is lodged electronically with the single body designated for that purpose, in the words “Ce dossier est déposé par voie électronique auprès d’un organisme unique désigné à cet effet”, and adds that the filing counts as a declaration to each administration concerned once the file is complete and compliant. For the foreign founder this means one file, in French, carrying the articles, the identity and address proofs, the proof of occupancy of the premises (justificatif de jouissance des locaux), the declaration of the beneficial owners (registre des bénéficiaires effectifs, the register identifying the natural persons who ultimately own or control the company), and for a branch the foreign parent’s own corporate documents with a certified French translation plus proof of the parent’s existence in its home register. The registry office of the commercial court (greffe du tribunal de commerce) examines the file and either registers the company or sends a request for corrections (demande de pièces complémentaires) with a deadline. Only registration produces the SIREN number (the nine-digit national business identifier issued by the statistics institute, INSEE), the SIRET number (SIREN plus five digits identifying each establishment), and the Kbis extract that banks, notaries, landlords and courts demand before countersigning anything. Expect two to six weeks from a clean filing to an operating Kbis when one founder lives abroad, longer when translations or legalised documents are missing. The official guidance of Business France, the public agency for foreign investors, confirms the menu open to a foreign business, stating that a foreign business can establish itself in France in several ways including a liaison office, a branch or a subsidiary, each implying a different level of autonomy, responsibility and obligations, a page verified on 11 May 2026 that every founder should read before choosing: the Business France guide Choosing your business establishment method.
The branch has one additional registration foundation worth knowing. Article L123-1 of the Commercial Code lists among the persons registered with the Trade and Companies Register the commercial companies whose registered office sits outside a French department and which have an establishment in one of those departments, in the words “Les sociétés commerciales dont le siège est situé hors d’un département français et qui ont un établissement dans l’un de ces départements”. That single sentence is the legal home of your branch: your Delaware, English or Emirati company, seated abroad, enters the French Trade Register because it operates an establishment on French soil. The entry publishes your presence in the official bulletin of civil and commercial announcements (Bulletin officiel des annonces civiles et commerciales, BODACC), which is how suppliers, creditors and courts learn that you can be sued in France. A liaison office (bureau de liaison), which only prospects and cannot invoice, stays outside this registration, but the boundary is policed: the moment the office negotiates and concludes contracts, it becomes an establishment and must be registered, with retroactive tax consequences described in the second part of this article.
The corporate bank account is where foreign files most often stall, and the sequence must be understood in advance. French practice requires a certificate of deposit of the funds (certificat de dépôt des fonds) from a bank before the company can be registered when capital is paid in cash, yet banks ask for draft articles, proof of address and the identification of every shareholder and director before issuing that certificate, while the registry asks for the certificate before registering. The circle is broken by preparation: mandate a bank early with complete draft articles, translated passports, proof of home addresses, the foreign parent’s ownership chain up to the beneficial owners, and a French correspondence address, and ask in writing for the list of missing items with a named contact. French law then provides a safety net whose scope founders misunderstand. Article L312-1 of the Monetary and Financial Code grants the right to open a deposit account with the credit institution of one’s choice, subject to holding no such account in France, to every natural or legal person domiciled in France, in the words “A droit à l’ouverture d’un compte de dépôt dans l’établissement de crédit de son choix, sous réserve d’être dépourvu d’un tel compte en France”, continuing with “1° Toute personne physique ou morale domiciliée en France”. A French subsidiary, domiciled in France from its registered office, can therefore invoke this right to an account (droit au compte) through the Banque de France designation procedure after documented refusals. A foreign parent seeking an account for a not-yet-registered branch stands on weaker ground and should apply in parallel to several banks, including online business banks that accept foreign directors with video identification, rather than waiting months for one traditional branch network. Our step-by-step formation guide details this exact sequence of bank certificate, Kbis extract, VAT number and first hire for founders operating from abroad: Setting Up a Company in France as a Foreign Founder: Bank Account, Kbis, VAT and Your First Hire. Keep every refusal letter: a refusal in writing is the key that opens the designation procedure, while a verbal refusal opens nothing.
Two filings complete the registration landscape and both are frequently missed from abroad. First, the beneficial owner declaration must be filed with the registry at incorporation and updated within thirty days of any change in the ownership chain; fines and, in serious cases, criminal penalties apply to the legal representative personally, and banks block files whose declared owners do not match the ownership chart. Second, the company’s documents must be kept at the registered office and produced to the registry on request, including updated articles after every capital increase or transfer of the seat. Founders who move apartments in Paris or switch domiciliation providers without filing the transfer discover the omission when the bank blocks the account or when a court summons goes to the old address. Domiciliation with an approved provider (entreprise de domiciliation agréée) remains the standard solution for founders without French premises, provided the contract is real, the mail is actually forwarded, and the provider’s approval number appears on the file.
II. Operating and defending the French presence from abroad: corporate tax, hidden establishment risk and remedies against refusals
A. French corporate tax catches the branch, the subsidiary and the unregistered operator alike: territorial profits, accounting duties and the Orefa lesson
French corporate tax (impôt sur les sociétés, IS) applies territorially: France taxes the profits made in France. Article 206 of the General Tax Code lists the companies liable to corporate tax whatever their purpose, including joint-stock companies, partnerships limited by shares and limited liability companies, in the words “sont passibles de l’impôt sur les sociétés, quel que soit leur objet, les sociétés anonymes, les sociétés en commandite par actions, les sociétés à responsabilité limitée”. Article 209 then sets the territorial measure, providing that the profits liable to corporate tax are determined taking into account only the profits realised in businesses operated in France, in the words “en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”. A French subsidiary is taxed on its worldwide-looking result computed under French rules, with the standard rate and instalment calendar explained in our guide to the first fiscal year. A registered branch is taxed on the profits attributable to its French establishment, with its own accounting, its own tax returns and its own liability for VAT (taxe sur la valeur ajoutée, TVA), the consumption tax collected on invoices. The branch cannot offset its French losses against the parent’s foreign profits under French domestic law, and transfers of funds between the branch and the head office are internal movements, not deductible charges, which surprises groups used to management fees between subsidiaries. Pricing between the French subsidiary and its foreign parent must additionally respect transfer pricing documentation once thresholds are crossed, because the administration compares the French margin with comparable independent companies.
The dangerous case is the company that operates in France without registering anything: a foreign team working for months from a Paris coworking space, a sales agent concluding contracts in the parent’s name, stock held in a French warehouse with local delivery. French domestic law and the tax treaties call this continuous presence a permanent establishment (établissement stable), and it triggers the full set of French obligations retroactively: corporate tax, VAT registration, accounting in France, payroll filings through the foreign-companies service of URSSAF (the network of agencies collecting social security contributions, Unions de recouvrement des cotisations de sécurité sociale et d’allocations familiales). The Court of Cassation drew the consequences in a judgment every foreign group should know. A Luxembourg company holding participations, artworks and aircraft, with allegedly insufficient staff and premises in Luxembourg but its capital interests, its effective management and a professional activity in France, was subjected to tax search and seizure measures authorised on the basis of suspected undeclared stable establishment and missing French accounting. In its judgment of 15 February 2023, appeal number C 21-13.288, decision number 134 FS-B, published under reference ECLI:FR:CCASS:2023:CO00134, the Commercial Chamber rejected the company’s appeal and stated the principle word for word: “Une société de droit étranger est tenue, lorsqu’elle exerce une activité en France par l’intermédiaire d’un établissement stable, aux obligations résultant des articles 54, 209 et 286, I, 3°, du code général des impôts, qui exigent la passation d’écritures comptables permettant de justifier des opérations imposables en France, de sorte que lorsqu’elle a méconnu ses obligations déclaratives, elle peut être présumée avoir omis sciemment de passer ou de faire passer des écritures ou avoir passé ou fait passer sciemment des écritures inexactes ou fictives dans des documents comptables dont la tenue est imposée par le code général des impôts.” The court therefore dismissed the appeal in full: “REJETTE le pourvoi”, ordering the company to bear the costs. The lesson for founders is direct. Keeping the accounting only at home while the real management sits in France does not protect the group; it creates the presumption of deliberate omission that authorises searches, reassessments, penalties and late interest. If your activity in France is more than preparatory or auxiliary, register the branch or the subsidiary before the administration qualifies your presence for you, keep French accounting capable of justifying the taxable operations in France, file the corporate and VAT returns even in a loss-making first year, and document the management location honestly in board minutes and travel records.
VAT deserves its own warning because it blocks operations faster than corporate tax. A French subsidiary or branch that invoices French clients must charge French VAT once registered, file periodic returns (déclarations de TVA) through the professional tax account, and pay or reclaim the balance; an inactive or missing VAT number halts customer payments and exposes every invoice issued without tax to reassessment. Groups that only import goods, hold stock or make intra-Community supplies need a French VAT registration even without a branch, through a tax representative where required for non-EU operators. The VAT number is requested on the single-window file or directly from the business tax service (service des impôts des entreprises, SIE) of the registered office, and its activation should be verified in the European VIES database before the first invoice goes out. Our VAT activation guide walks through the inactive-number case that affects most newly registered foreign-owned companies: Your French VAT Number Is Still Inactive After You Got the Kbis.
B. When France says no: registry rejection, bank refusal and tax reassessment challenged from abroad with a Paris and Ile-de-France method
Refusals are part of the process and each has its own remedy, provided the founder reacts in writing and within the deadline rather than refiling the same papers. When the registry office rejects the single-window file, the message always states the exact ground: missing translation, proof of occupancy judged insufficient, beneficial owner form inconsistent with the articles, foreign parent’s certificate older than three months, or signature lacking authority. The remedy is to cure the precise defect within the stated time: obtain a sworn translation (traduction assermentée) by a translator registered with a French court of appeal, replace the accommodation certificate with a lease, domiciliation contract or title deed in the company’s name, align the declared owners with the share register, request a fresh certificate of good standing from the home register, and attach a board resolution authorising the French representative. A second identical filing after a rejection for insufficient premises achieves nothing except a second rejection; a cured filing with a cover letter listing each correction point by point is normally registered. Where the registry doubts the reality of the registered office, an on-site check can be ordered, which is why fictitious addresses and mailboxes that never answer always fail. Keep the filing receipt, the rejection message and the corrected proofs together: that bundle is the evidence a lawyer needs if the dispute escalates to the supervising judge of the Trade Register (juge commis à la surveillance du registre du commerce et des sociétés).
When banks refuse the account, the method is parallel applications plus written traces. Apply to at least three institutions including one online business bank, provide the identical complete file to each, and require every refusal in writing with its reason. For a French subsidiary, two or three documented refusals open the right-to-an-account procedure before the Banque de France, which designates an institution obliged to open a basic account; the procedure carries no filing charge and is decided in days, and available to companies domiciled in France, which is one more reason to complete the domiciliation first. For a branch in formation, where the legal ground is thinner, the practical levers are a deposit with a bank that regularly handles foreign groups, a personal introduction through the group’s existing banker, or capital liberation through a notary (notaire) or a blocked-funds mechanism accepted by the registry. Never pay a so-called agent who promises a Kbis in forty-eight hours against cash: the registry never works that way, and the file will be rejected with a fraud flag that follows the founders’ names. If the account is closed later for compliance reasons (de-risking), the bank must give notice, and the company can invoke the same designation procedure while moving its flows to a second institution opened in advance.
When the tax administration reassesses, the calendar is strict and the first letter decides the rest. A reassessment proposal (proposition de rectification) must be answered within thirty days with reasons and evidence; silence becomes acceptance. The standard path from abroad runs through a written claim (réclamation contentieuse) to the tax office, then, for factual questions, the departmental commission, then the administrative court (tribunal administratif) within two months of the rejection decision, with the possibility of suspending collection by providing guarantees. The Orefa case above shows what is at stake when the dispute concerns the very existence of a French taxable presence: search authorisations, presumptions of deliberate omission and full cost orders. Groups that kept French accounting, filed returns and documented their transfer pricing negotiate from a defensible position; groups with no French records negotiate from the presumption of deliberate omission. The earliest profitable step is therefore an internal review before any control: where is the effective management, who signs French contracts, where is the stock, and do the filed returns match that reality.
Founders based in Paris and the Ile-de-France region benefit from one practical concentration: the Paris registry office, the Paris commercial court, the business tax services and most banks’ international desks sit within the same metropolitan area, so a representative can cure a filing, meet a banker and consult a lawyer in a single trip. Jurisdiction follows the registered office, so a company seated in Paris answers before the Paris Commercial Court (tribunal de commerce de Paris) and the Paris Court of Appeal, while a company seated in Boulogne, Nanterre or Créteil answers before the courts of its own department. Mention the department explicitly in the articles and on every filing, because a mismatch between the articles, the Kbis extract and the tax account is the most common source of summonses served at the wrong address and judgments rendered by default. From abroad, the discipline is simple: one French correspondence address that is actually read every week, one calendar with the filing and payment deadlines, and one complete bundle, Kbis extract, articles, ownership chart, bank letters and tax receipts, available in French at any time.
Conclusion
Choose the branch to explore France without committing the group, and choose the subsidiary to operate, sign, borrow and grow in France behind a liability shield that starts only on registration. Register through the single window with a complete French file, translations included, because the registry rewards complete files and punishes repeated identical ones. Open the bank account with parallel applications and written refusals, invoking the right to an account once the French company is domiciled. Pay French tax on French profits in whichever structure you chose, keep French accounting capable of justifying every taxable operation, and activate the VAT number before the first invoice, because an unregistered continuous activity becomes a permanent establishment with retroactive duties, presumptions of deliberate omission and court-approved searches. Sign pre-registration acts expressly in the name of the company in formation and have them taken over on registration, so the founders’ personal liability ends where the company’s begins. And when the registry, the bank or the tax office objects, answer the exact ground in writing within the deadline, cure the defect once, and escalate through the designated procedure instead of abandoning the file. Done in this order, the branch-or-subsidiary decision stops being a gamble and becomes what French law intends it to be: a documented choice of vehicle, registered, banked, taxed and defensible from abroad.
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