You run a company in London, New York, Dubai, Singapore or Montreal, and France is your next market. A distributor asks you to sign, a client wants a French invoice with French VAT, a hire in Paris will not join without a French pay slip, and a bank asks for a Kbis (the official French company identity certificate issued by the greffe, the registry office of the commercial court) before opening anything. You live abroad, you cannot visit the greffe every week, and you must still choose the right vehicle: a branch (succursale, a French establishment of your existing foreign company, with no legal personality of its own) or a subsidiary (filiale, a new French company, usually a SAS, société par actions simplifiée, or a SARL, société à responsabilité limitée, owned by your foreign parent). The wrong choice costs months, blocks the bank account, creates personal liability for the director, triggers corporate income tax (IS, impôt sur les sociétés) and VAT (TVA, taxe sur la valeur ajoutée) in the wrong place, and complicates hiring and closing. This guide explains, for a business reader living outside France, what each option creates, how registration through the INPI single desk (INPI, Institut national de la propriété industrielle, which operates the Guichet unique, the single online filing portal for all French business formalities) works from abroad, who pays for the debts, how tax, bank, staff and closure differ, and how to challenge a refusal or a reassessment. Every French acronym is explained, every decisive rule is linked to its official text, and the procedure reflects the 2026 state of the law as verified during this run.
I. Branch or subsidiary: what you actually create in France when you live abroad
A. How a French subsidiary protects the foreign parent and when founders should choose a SAS
A subsidiary is a new French person. That single sentence explains most of the liability, tax and operational consequences. Under French commercial law, Article L210-6 of the Commercial Code provides that “Les sociétés commerciales jouissent de la personnalité morale à dater de leur immatriculation au registre du commerce et des sociétés.” In plain English: a French commercial company becomes a separate legal person on the day it is registered with the RCS (registre du commerce et des sociétés, the French trade and companies register, today fed through the RNE, registre national des entreprises, the national business register). From that day it owns its assets, signs its contracts, hires its staff, sues and is sued in its own name, and its Kbis proves its existence to banks, suppliers and the URSSAF (Union de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the French social-security collection agency that registers employers and collects payroll charges).
For a foreign founder, the two practical subsidiary forms are the SAS and the SARL, with the SAS chosen in the large majority of foreign-owned projects because its articles of association can allocate powers freely between the shareholder, the president and any general manager, while the SARL follows a more rigid statutory scheme. Article L227-1 of the Commercial Code states that “Une société par actions simplifiée peut être instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leur apport.” The SAS can therefore be formed by your existing foreign company alone, acting as sole shareholder, and the parent risks only the capital it contributes. The SARL follows the same limited-liability logic: Article L223-1 of the Commercial Code provides that “La société à responsabilité limitée est instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leurs apports.” In both cases, if the French business fails, creditors pursue the French company first, not automatically the American, British or Emirati parent, provided no personal guarantee (cautionnement) was signed and no management fault justifies a separate action against the director.
That shield has limits you must understand before choosing. First, banks lending to a young French subsidiary routinely ask the foreign parent for a comfort letter or a first-demand guarantee, which reintroduces liability by contract. Second, the director of the French subsidiary (président of SAS, gérant of SARL) can be personally pursued for management faults, tax fraud or late filing for insolvency, and directors living abroad are not protected by distance. Third, the SAS cannot do everything: Article L227-2 of the Commercial Code provides that “La société par actions simplifiée ne peut procéder à une offre au public de titres financiers ou à l’admission aux négociations sur un marché réglementé de ses actions.” If your plan is to list in Paris or to offer shares to the public, the SAS must first convert. For fundraising limited to identified investors, the SAS remains the standard tool, and our companion analysis of SAS fundraising mechanics complements this guide, while the general formation roadmap is described in Setting Up a Company in France as a Foreign Founder: Bank Account, Kbis, VAT and Your First Hire, which walks through the capital deposit, the Kbis and the first VAT and hiring steps that also apply once your subsidiary exists.
Registration of the subsidiary from abroad follows one mandatory channel. Article L123-33 of the Commercial Code provides that “Ce dossier est déposé par voie électronique auprès d’un organisme unique désigné à cet effet.” Since the reform completed on 1 January 2025, that single body is the INPI Guichet unique at formalites.entreprises.gouv.fr, and the historical direct filing at the greffe counter is no longer the route. The official Infogreffe guide for foreign structures confirms that creation, modification, deregistration and filing of deeds for the RCS must now go exclusively through that portal. In practice, from abroad, you prepare the parent company documents (certificate of existence, articles, ultimate beneficial owner declaration, proof of the French registered office, identity of the president or manager, statement of non-conviction), have them translated by a sworn translator where the greffe requires it, deposit the subsidiary share capital with a French bank or notary who issues the capital-deposit certificate, sign the articles, file the single dossier online, and receive the Kbis once the greffe validates. The subsidiary needs a real French address (domiciliation), not a mere mail drop, because the tax office, the URSSAF and labour inspectors write there, because BODACC (Bulletin officiel des annonces civiles et commerciales, the official gazette publishing company registrations, insolvencies and legal notices) publishes the registration, and because a fictitious seat can support a later challenge to invoices, contracts and even the deductibility of charges.
Capital, cost and timing are the next questions founders ask. A SAS or SARL can be formed with one euro of capital, but a symbolic amount alarms banks, landlords and the URSSAF, delays the account opening, and forces the founder to fund the company through shareholder loans (comptes courants) that later raise interest-rate and repayment disputes. Foreign-owned subsidiaries in Paris typically incorporate with 1,000 to 10,000 euros, deposit the funds before signature, and budget two to six weeks from complete file to Kbis when the file is clean, longer when translations, apostilles, powers of attorney or the bank compliance review stall. The bank compliance review is the real bottleneck since 2024: anti-money-laundering checks on a non-resident shareholder and a non-resident director add one to four weeks, and the bank may ask for the parent accounts, the group chart, the source of funds and the French business plan. Filing an incomplete dossier to gain time backfires, because the Guichet unique issues a regularization request, the clock restarts, and the distributor or client waiting for the Kbis signs elsewhere.
B. How a branch keeps you fast but leaves the foreign parent fully exposed
A branch is the opposite bet: speed and control against exposure. A succursale is a stable French establishment of your existing foreign company. It has no legal personality distinct from the parent, no separate owner, no shares to sell, and no shield between French creditors and the foreign head office. If the Paris branch signs a lease, orders stock or hires staff and does not pay, the creditor can pursue the foreign company directly, in France, for the full debt. That rule surprises founders who assume that registering a branch caps risk like a subsidiary. It does not. The branch is you, operating in France, and the parent answers for it.
Registration is nevertheless mandatory as soon as the presence is stable. Article L123-36 of the Commercial Code provides that “Il est tenu un registre national des entreprises, auquel s’immatriculent les entreprises exerçant sur le territoire français une activité de nature commerciale, artisanale, agricole ou indépendante.” A foreign company with a shop, office, warehouse, building site of sufficient duration, dependent agent signing in its name, or team working continuously from France falls within that duty and must register the branch with the RCS/RNE through the same INPI Guichet unique. The Infogreffe guide for registration of a branch of a foreign company (siège social à l’étranger) lists the same single-portal logic, requires the parent deeds and accounts in translated form, the details of the French establishment and of the person permanently empowered to bind the company in France (fondé de pouvoir), and issues a distinct registration number for the branch while the legal person remains the foreign company. Operating a stable presence without registration exposes the company to fines, to the impossibility of invoicing properly with a French VAT number, to URSSAF reassessment on undeclared staff, and to the argument, in litigation, that the company hid its French establishment to escape tax and social charges.
The branch must also live transparently after registration. Foreign companies with a French branch must file the parent annual accounts, translated into French, with the French registry, update any change of legal representative, address or corporate form through the Guichet unique, and keep French business records available for the DGFIP (Direction générale des finances publiques, the French tax administration) and for statutory auditors where thresholds apply. Failure to deposit the translated parent accounts is a recurring ground for formal notices, penalty accrual and, in due diligence, a red flag that kills a later sale or financing. A liaison office (bureau de liaison), sometimes proposed as a lighter option, is not a halfway branch: it may only conduct preparatory or auxiliary activity such as prospecting and representation, may not sign commercial contracts or invoice, and converts into a taxable branch the day it exceeds that role. If your team in France negotiates prices, signs deals or delivers the service from Paris, do not file a liaison office to save fees; file a branch or a subsidiary.
So when is the branch the right answer? Three profiles dominate. First, the test phase: you need a Paris address, one or two staff and local invoices for six to eighteen months before deciding to capitalize a subsidiary, and you accept parent liability for a bounded period. Second, regulated groups that want the branch balance sheet to remain legally part of the parent, for banking, insurance or network reasons. Third, public procurement or sector tenders where the buyer wants the foreign parent jointly liable and financially visible. Outside these cases, founders who plan to hire, to borrow, to sign a 3-6-9 commercial lease (bail commercial, the standard French commercial lease with 9-year term and three-year termination options) or to raise funds choose the subsidiary, because landlords, banks and investors prefer a French debtor with its own capital, its own Kbis and its own accounts. The branch saves the cost of incorporating and capitalizing a company; it never saves the cost of compliance once activity starts.
II. Running the French presence from abroad: tax, bank, staff, closure and how to challenge a refusal
A. How France taxes your branch or subsidiary and what to file before the administration does it for you
French corporate tax follows activity, not the label you chose. Article 209 of the General Tax Code taxes profits by taking into account “en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”. A French subsidiary operating in France is fully within that rule. A foreign company without any French subsidiary is equally within it if it operates in France through an autonomous establishment, a dependent representative or a complete commercial cycle here. Article 206 of the General Tax Code lists as liable to corporate tax, “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”, and the same territorial logic extends to foreign companies taxable on their French enterprise. In practice the DGFIP looks at where contracts are negotiated and signed, where the team works, where stock sits, where after-sales decisions are taken and where the bank moves occur, not at whether you called the structure a branch, a subsidiary or nothing at all.
The Cour de cassation drew the operational consequences in a published 2023 trio that every foreign group should read before arguing that it has no French establishment. In Cass. com., 15 February 2023, No. 21-13.288, published in the Bulletin (ECLI:FR:CCASS:2023:CO00134), the Court holds that “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”. A foreign company operating through a stable establishment must therefore keep accounting records supporting its French taxable transactions, file the corresponding returns and be able to justify them. The companion rulings of the same day confirm the procedure: in Cass. com., 15 February 2023, No. 20-20.599, the Court recalls that “des visites et saisies peuvent être autorisées par l’autorité judiciaire si l’administration fiscale établit qu’il existe des présomptions qu’un contribuable se soustrait à l’établissement ou au paiement des impôts sur le revenu ou sur les bénéfices ou des taxes sur le chiffre d’affaires”. The tax administration does not need full proof to obtain judicial authorization for visits and seizures; simple presumptions that a foreign company operates a stable establishment subject to French corporate and turnover-tax accounting duties suffice. For a founder, the message is direct: invoices issued from abroad for work performed in France, a Paris team without French payroll, and no French returns create exactly the presumptions the Court describes, and the first formal tax act is often a search authorization, not a polite letter.
VAT follows the same presence logic but with its own registration track. A French subsidiary receives a French VAT number with its creation and files French VAT returns (CA3) with the DGFIP, charges French VAT where the place-of-supply rules point to France, and recovers input VAT under the usual conditions. A foreign company with a French branch also needs a French VAT number for the branch operations and files in France. A foreign company with no French establishment but making taxable transactions in France (distance sales above thresholds, warehouse in France, construction or installation work, certain B2C services) must still register for French VAT, appoint a fiscal representative (représentant fiscal) where its home state has no mutual-assistance treaty with France, and designate the competent foreign-companies tax office (SIEE, service des impôts des entreprises étrangères). The registration goes through the tax office, not the RCS, and delays of four to twelve weeks are common when the file lacks translated articles, proof of foreign VAT status, the representative mandate or the French bank details for refunds. Selling and collecting French VAT before registration, or registering late, produces interest, penalties and joint exposure for the French customer under reverse-charge errors, which is why distributors increasingly require the VAT number before the first purchase order.
The accounting and filing calendar then takes over and punishes distance. The French entity, subsidiary or branch, must keep books supporting French taxable operations, file corporate tax (IS) within the statutory deadline after year-end, file VAT on its monthly or quarterly cycle, operate payroll through the DSN (déclaration sociale nominative, the monthly electronic payroll and social declaration feeding URSSAF and the tax withholding system), file the annual wage and withholding summaries, pay the CFE (cotisation foncière des entreprises, the local business premises tax due even for a small office), and deposit accounts: subsidiary accounts with the greffe, parent translated accounts for a branch. Missed filings trigger automatic assessments (taxation d’office), late interest at 0.20 percent per month and surcharges of 10, 40 or 80 percent depending on good faith, failure to file after formal notice or fraud, before any criminal overlay. The practical fix from abroad is to appoint, on day one, a French chartered accountant (expert-comptable) with an online portal, a payroll provider connected to the DSN, and a calendar owner who receives the Guichet unique, DGFIP and URSSAF notices at the French address and forwards them the same day. Foreign founders who centralize mail in London or Delaware learn of assessments when the bank account is already seized.
Staff is the second front where founders underestimate France. Hiring the first French employee from abroad does not require a subsidiary: a foreign company can hire in France once it is registered as a foreign employer with the URSSAF foreign-firms service (SFE, service firmes étrangères), obtains SIRET numbers for employer purposes, files the DPAE (déclaration préalable à l’embauche, the mandatory pre-hiring declaration filed with URSSAF before any employee starts), drafts a French-law contract stating pay, hours, place of work, trial period and applicable collective agreement (convention collective), registers working time for 35-hour week compliance, and pays through French payroll with withholding (PAS, prélèvement à la source). The branch or subsidiary simply makes this easier because the employer number, bank account and address already exist. Posted workers (détachement) sent from abroad for a temporary mission follow a different track with SIPSI declarations and A1 certificates and do not replace French hiring for permanent roles. Our overtime and URSSAF-audit analyses detail the pay-record and inspection risks that follow the first hire, and they apply identically whether the employer is a new SAS or a registered branch.
B. How to open the bank account, close the structure and challenge a refusal or a reassessment from abroad
The bank account is where foreign projects stall. To deposit subsidiary capital, the bank must identify the shareholder, the ultimate beneficial owners, the future director and the source of funds, and compliance teams routinely take three to six weeks for non-resident files. To open the operating account for a branch, the bank asks for the branch RCS/RNE registration, the parent identification, the powers of the French representative and the same beneficial-owner transparency. Refusals are frequent and rarely reasoned beyond risk policy, especially for crypto, gaming, adult, CBD, multi-jurisdiction holding or sanction-adjacent activities. French law provides a remedy founders should use rather than opening accounts in the personal name of the director, which confuses company money with personal money and destroys limited liability in practice. Any person or company refused an account can invoke the right to an account (droit au compte) before the Banque de France (the French central bank, which designates a bank obliged to open a basic account), after collecting written refusals. The procedure is paper-based, takes weeks, and yields a basic account with limited services, but it unblocks the Kbis where capital deposit is the obstacle and keeps operations legal while a full commercial account is negotiated. From abroad, the winning file includes the draft articles, the Guichet unique receipt, the lease or domiciliation contract, the parent registry extract with apostille and sworn translation, the group chart to the natural persons, proof of funds origin, and a one-page French business plan stating activity, clients, headcount and flows. Sending that file complete, in French, to two banks in parallel halves the delay compared with sequential English-only applications.
Closure must be planned at entry, because the branch that was quick to open is not always quick to close. A subsidiary closes through dissolution followed by liquidation: shareholder decision to dissolve, appointment of a liquidator, publication in a legal-notices journal (JAL, journal d’annonces légales) and on the Guichet unique, BODACC publication, realization of assets, payment of creditors, filing of liquidation accounts, tax clearance for IS, VAT and payroll balances, distribution of any bonus, and final deregistration (radiation) with the RCS/RNE. Article L237-2 of the Commercial Code recalls that “La personnalité morale de la société subsiste pour les besoins de la liquidation, jusqu’à la clôture de celle-ci.” The company survives for liquidation needs until closure, which means contracts, leases and employment must be terminated or transferred before the final filing, and the liquidator remains answerable. A branch closes through deregistration of the French establishment, termination of its contracts and employment, settlement of French IS, VAT and URSSAF balances, withdrawal of delegations, and filing of the cessation with the Guichet unique and the tax office, while the parent survives abroad. In both cases the French administration checks that no return is missing and that the CFE, payroll and VAT ledgers close at zero before accepting the radiation, and it can refuse deregistration or issue a final assessment where filings are incomplete. Budget three to nine months for a clean subsidiary liquidation with staff or a lease, one to three months for a clean branch deregistration without litigation, and longer whenever a tax audit or labour dispute is pending.
Refusals and reassessments are challenged in writing, quickly, and from abroad through a representative. Four tracks matter. First, RCS/Guichet unique rejections: read the exact missing-piece notice, complete the dossier within the stated period, and if the greffe maintains a legal refusal (name, registered office, capacity of the representative), file a gracious appeal (recours gracieux) then seize the supervising judge (juge commis à la surveillance du RCS) at the commercial court, with counsel in Paris acting under a power of attorney. Second, VAT registration refusals or fiscal-representative disputes: answer the SIEE with the missing mandate, treaty analysis and proof of foreign VAT status, then contest any formal refusal before the administrative court (tribunal administratif) within two months of notification. Third, corporate-tax establishment and reassessment: upon receipt of a rectification proposal (proposition de rectification), reply within thirty days with evidence that no stable establishment exists or that profits were correctly allocated, request the departmental interlocutor (interlocuteur départemental) and, where available, the national commission for serious cases, then, after the collection notice (avis de mise en recouvrement), file a formal claim (réclamation) and, if rejected, seize the administrative court, suspending payment only through an express stay or guarantees. Fourth, URSSAF and labour: respond to the control letter with payroll, time and contract evidence, contest the formal notice (mise en demeure) before the social court (pôle social du tribunal judiciaire) within its short deadline, and never ignore a registered letter sent to the French address while you are abroad. In every track, the courier matters as much as the argument: appoint a Paris counsel or accountant as correspondence agent, use registered electronic letters where accepted, keep proof of filing, and calendar the two-month administrative appeal deadline from notification, not from the day you read the email.
Paris and Ile-de-France add practical specifics that change outcomes without changing the law. The competent greffe follows the French address: Paris (Tribunal des activités économiques de Paris) for a Paris seat, Nanterre, Bobigny or Créteil for the inner suburbs, with different counter practices on translations, apostilles and beneficial-owner evidence despite the single portal. Commercial leases in Paris require deeper landlord KYC on foreign tenants, higher deposits and parent guarantees, and eviction and rent-collection practice runs through the Paris judicial court (tribunal judiciaire de Paris) with bailiff (commissaire de justice, formerly huissier) service rules that punish late responses. Labour inspection (DREETS Ile-de-France, Direction régionale de l’économie, de l’emploi, du travail et des solidarités) and URSSAF Ile-de-France control foreign-employer files intensively because volumes are high, and payroll collective agreements in Paris (SYNTEC/BETIA, commerce, BTP) impose minima and trial-period rules that override the English offer letter. Build these specifics into the file: Paris address with mail handling and meeting access, French phone answering in business hours, bilingual payroll calendar aligned to the DSN on the 5th or 15th, and a litigation mailbox monitored daily. Distance is managed by design, not by hope.
Conclusion
Choose the subsidiary when you want a French person that contains risk, borrows, hires, signs leases and can later be sold or funded, and accept the capital, bank and accounting cost that comes with a separate Kbis. Choose the branch when you need a fast, fully controlled French establishment for a bounded test or a group that wants the parent visibly liable, and accept that every French creditor can pursue the foreign head office. In both cases, register through the INPI Guichet unique before stable activity starts, deposit translated parent and company documents once and correctly, secure IS, VAT and URSSAF registrations from day one, keep French books that prove where profit was earned, and treat every refusal or reassessment as a dated procedure with a court at its end. A foreign company that files early, answers within thirty days to tax proposals and within two months to administrative refusals, and keeps a monitored Paris address rarely loses on procedure; it negotiates on substance, closes cleanly when the test ends, and scales through a subsidiary when France becomes its home market.