Your company is running well in London, New York, Dubai or Singapore, and France is your next market. You want a real French presence that can sign contracts, hire staff, open a French bank account and invoice with French VAT, while you keep living abroad. The vehicle most foreign groups choose is the French subsidiary, in French a filiale: a new French company, very often a société par actions simplifiée (SAS, a flexible limited-liability company), whose capital is held by your existing foreign company. This article explains, for a business reader staying outside France, how to create that filiale SAS from a distance, what the clerk of the commercial court (greffe du tribunal de commerce, the court office that keeps the company register) will ask your foreign parent to file, how to put money in and take profits out, and where the liability shield stops. Every French acronym is explained on first use: RCS (registre du commerce et des sociétés, the French company register), Kbis (the official registration certificate that proves a company exists), RNE (registre national des entreprises, the national business register fed through the single online desk), INPI (Institut national de la propriété industrielle, the office that runs the single filing desk called the Guichet unique), BODACC (bulletin officiel des annonces civiles et commerciales, the gazette where creations are published), RBE (registre des bénéficiaires effectifs, the register of beneficial owners, meaning the living persons who ultimately own or control the company), URSSAF (union de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the agency that collects social charges on wages), and IS (impôt sur les sociétés, French corporate income tax).
I. How do I create a French subsidiary from abroad without travelling to France?
Creation follows one national route: the file is submitted online on the Guichet unique, checked, then recorded in the RCS, and the new company receives its Kbis. A foreign parent does not need a French co-founder and does not need to fly in, but every foreign document must arrive in a form the greffe accepts: recent, legalised or apostilled where required, translated by a sworn translator (traducteur assermenté) when it is not in French, and consistent across names, dates and signatories. The government business portal describes this single-desk logic and the Economy Ministry publishes a guide for foreign companies setting up in France, which confirms that the subsidiary (filiale) is one of the two standard routes next to the branch (succursale, an extension of the foreign company without its own legal personality): see the Service Public Entreprendre page on how to create a company, the Guichet des formalités des entreprises and the Economy Ministry guide for setting up a foreign business in France. Our companion pillar for foreign founders on bank account, Kbis, VAT and first hire covers the practical chain in which the subsidiary step sits.
A. Should my foreign company choose a filiale SAS rather than a branch or a SARL?
The starting question is legal, not marketing: do you want a new French person, in the legal sense, or a mere outpost of your existing company? French law answers with a bright line. Article L233-1 of the Commercial Code provides: “Lorsqu’une société possède plus de la moitié du capital d’une autre société, la seconde est considérée, pour l’application des sections 2 et 4 du présent chapitre, comme filiale de la première.” In plain English, when your foreign company holds more than half the capital of the new French company, the French company counts as its subsidiary (filiale). Control is defined more broadly in Article L233-3 of the Commercial Code, which treats a person as controlling another when it holds, directly or indirectly, a fraction of capital giving it the majority of voting rights, or when it can appoint or remove most of the management, among other cases. A branch (succursale) is the opposite choice: no new capital, no new legal person, and the foreign head office remains directly liable for everything the branch signs. A subsidiary is a separate debtor, a separate taxpayer and, if managed correctly, a separate risk envelope.
Within subsidiaries, foreign parents almost always pick the SAS over the SARL (société à responsabilité limitée, the rigid limited-liability company with statutory management rules). The reason sits in Article L227-1 of the Commercial Code: a SAS may be formed by one or more persons “qui ne supportent les pertes qu’à concurrence de leur apport”, meaning each shareholder bears losses only up to what it put in. A foreign company can therefore be the sole shareholder (associé unique) of a SASU (the one-shareholder version of the SAS), write tailor-made articles (statuts) with a president (président, the mandatory legal representative of a SAS) who may be a legal person itself represented by a living individual, add a general manager (directeur général) for Paris operations, and organise voting, vetoes and transfers exactly as the group wants. The SARL is cheaper in drafting fees for a small family business but its manager (gérant) regime, its approval (agrément) clauses and its transfer mechanics are statutory and harder to reshape for a group. If your plan is to hold 100 percent from abroad, appoint a president who can sign in France, and keep group reporting lines clean, the SASU is the default answer, and the branch is kept for light prospecting without hiring or borrowing at scale.
Paris and the Paris region (Île-de-France) add a practical layer worth anticipating from abroad. The competent clerk is the greffe of the registered office (siège social): the Paris greffe for a Paris address, Nanterre, Bobigny or Créteil for the inner suburbs. Filing is national through the Guichet unique, but rejections still come from the local greffe that reads your file, and Paris reviewers see thousands of foreign-parent files a year, so inconsistencies in transliteration of the parent name, in the transliteration of Arabic, Hebrew, Russian or Chinese director names, or between the parent certificate and the articles, trigger the fastest requests for correction. Choose the registered address before you draft: a domiciliation contract (contrat de domiciliation, an approved business-address provider), a commercial lease (bail commercial) or premises made available by a group entity. The address proof (justificatif du siège) must match the address in the articles to the letter, including floor and door codes used in Paris buildings, because the Kbis will repeat it and banks, insurers and the VAT service will rely on it.
One timing trap must be understood before anyone signs: the subsidiary does not exist until it is registered. Article L210-6 of the Commercial Code states: “Les sociétés commerciales jouissent de la personnalité morale à dater de leur immatriculation au registre du commerce et des sociétés.” Legal personality, and with it the ability to own assets and owe debts in its own name, starts on RCS registration. The Civil Code says the same for companies in general in Article 1842 of the Civil Code: companies other than those expressly excluded “jouissent de la personnalité morale à compter de leur immatriculation.” Anyone who signs “for” the subsidiary before that date signs personally, unless the commitment is later taken over properly. The Court of Cassation (Cour de cassation, France’s highest court for civil and criminal matters) confirmed the strict reading on 29 November 2023 in Cass. com., 29 Nov. 2023, No. 22-21.623: “Il résulte des articles L. 210-6 et R. 210-6 du code de commerce 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 ruling warns that only commitments expressly taken “au nom” (in the name of) or “pour le compte” (on behalf of) the company in formation can be taken over, and that papers signed “par” (by) a non-existent company are void. In practice, your pre-registration lease, bank pre-agreement and service contracts must state that the signatory acts in the name and on behalf of the SAS in formation (société en formation), list them in an annex to the articles, and let the subsidiary formally take them over after the Kbis arrives.
B. What documents does the Guichet unique ask a foreign parent company to file?
The file has four blocks: the parent, the money, the address and the people. Each block has a foreign-parent variant, and each variant is where files from abroad stall. First, the parent proves it exists and can decide. Expect to provide a recent company-register extract from the home country (the equivalent of the Kbis, dated less than three months), the resolution of the competent corporate body authorising the creation of the French subsidiary, the subscription to the shares and the appointment of the president, and a power of attorney (pouvoir) for the person signing in France if the legal representative of the parent does not sign personally. Non-French public documents often need an apostille under the Hague Convention or consular legalisation, plus a sworn French translation. The name of the parent must be spelled identically on the extract, the resolution, the articles and the online form, because the Guichet unique software and the greffe compare character strings, not intentions.
Second, the capital must be documented before registration. French practice for a cash SAS is: draft articles, open a blocked capital account (compte bloqué) with a bank, notary or the Caisse des dépôts, pay in the subscribed cash, obtain the deposit certificate (attestation de dépôt des fonds, also called certificat du dépositaire), then file. There is no longer a high statutory minimum for a SAS, so groups often start with a modest capital aligned with first-year costs, then fund growth through current-account advances or capital increases, a choice developed in Part II. Contributions in kind (apports en nature, such as equipment, software or receivables) need a description in the articles and, above thresholds or at the shareholders’ request, a report by a contributions auditor (commissaire aux apports). Contributions of industry (apports en industrie, know-how or work) are possible in a SAS but do not form the capital. Keep the bank trail clean: the payer name must be the subscriber named in the articles, the amount must match the subscription, and any exchange-rate or intermediary-bank deduction must be topped up before the certificate is issued, because the greffe reads the certificate figure, not your transfer order.
Third, the articles and the address. The articles must name the company, its purpose (objet social), its registered office, its duration, its capital and share breakdown, its president and decision rules, and the takeover of pre-registration commitments with an itemised statement (état des actes accomplis pour le compte de la société en formation). The purpose deserves care: banks, insurers and regulated-activity desks read it first, and an object that is too narrow blocks the first contract while an object that lists regulated activities (banking, insurance intermediation, health, security, legal advice) triggers authorisation checks. Attach the address proof: domiciliation contract with an approved provider plus its approval number, or lease, or title deed with a provision of premises. If the president is a legal person (your foreign parent or a sister company), the articles and the form must also name the permanent representative (représentant permanent), a living individual, with full civil details.
Fourth, the people: identity, residence and clean-record papers. For each president, general manager and, where applicable, permanent representative, the greffe expects a valid identity document, proof of personal address, and a declaration of non-conviction (déclaration de non-condamnation) plus, for foreign nationals, documents allowing the criminal-record check the declaration refers to. Foreign directors living abroad often underestimate this block: an expired passport scan, a utility bill in another name, or a declaration signed with a different spelling than the passport sends the file back. Add the beneficial-owner declaration for the RBE: Article L561-46 of the Monetary and Financial Code requires covered companies to declare to the RCS, through the single body, “les informations relatives aux bénéficiaires effectifs”, meaning identification details, personal domicile and how control is exercised. For a 100 percent subsidiary, the chain leads through the foreign parent to the living persons who ultimately hold, directly or indirectly, more than 25 percent or otherwise control it. Groups with layered holdings should map that chain before filing, because a wrong RBE sheet is not a clerical detail: it follows the company into every bank compliance review. Once filed, the greffe registers the company, the INPI feeds the RNE, a SIREN number (système d’identification du répertoire des entreprises, the nine-digit company identifier) and a SIRET number (SIREN plus five digits for the establishment) are issued by INSEE (the national statistics institute), the creation is announced in the BODACC, and the Kbis can be ordered. Only then can the blocked capital be released to the new company, the VAT and employer registrations activated, and the president sign as president rather than as founder.
II. How do I fund, tax and protect my French subsidiary once it is registered?
Registration is the midpoint, not the finish. From the Kbis date, the subsidiary lives on three rails: cash (how the parent puts money in and gets it back), tax (where the subsidiary pays IS and VAT and how dividends travel back to the parent), and risk (what the separate legal personality actually shields when suppliers, banks, URSSAF or the tax administration come knocking). Foreign groups that run these three rails from headquarters with one shared bank login and one shared email signature are the ones that later discover the shield has holes. Groups that keep separate accounts, separate minutes and arm’s-length paperwork keep the advantage they paid to create. Our yearly follow-up guide on approving accounts, holding the meeting and filing from abroad takes over where this article stops.
A. How do I put money in, get paid back and use the French parent-subsidiary tax regime?
Day-to-day funding usually travels through shareholder current accounts (comptes courants d’associés, advances the parent lends to the subsidiary and records in a dedicated account), because they are fast, reversible and do not require a notary or a capital-increase filing. They must still be documented: a written advance agreement, a rate that matches what independent parties would charge, a ceiling, a term, and entries in both companies’ books that mirror each other. French courts and auditors reclassify undocumented or permanently loss-making advances as hidden capital contributions or abnormal management acts, with tax and liability consequences. Larger or longer-term needs go through capital increases (augmentations de capital) decided by the competent shareholder body, with a new deposit certificate for cash, an auditor report for kind, and a modifying filing on the Guichet unique. Keep every decision in signed minutes (procès-verbaux): a 100 percent shareholder that never writes anything down looks, on paper, like no shareholder at all.
Tax starts with a simple status: the French subsidiary is a French taxpayer. Article 206 of the General Tax Code lists among companies liable to IS “les sociétés anonymes, les sociétés en commandite par actions, les sociétés à responsabilité limitée n’ayant pas opté pour le régime fiscal des sociétés de personnes”, a family that, by case law and doctrine applied to the SAS, includes the SAS as a company liable in the same way when it carries on a profit-making activity in France. The standard rate is set by Article 219 of the General Tax Code: “Le taux normal de l’impôt est fixé à 25 %.” Reduced and separate rates exist for specific long-term gains and innovation income, but a service or distribution subsidiary budgets on 25 percent, plus the yearly filing and instalment calendar the tax office (service des impôts des entreprises) assigns after the first year. VAT (taxe sur la valeur ajoutée) is a second registration track: the subsidiary gets its intra-Community VAT number, charges French VAT on domestic supplies, self-assesses on intra-group cross-border services where the reverse charge applies, and files returns (CA3) on the monthly or quarterly rhythm the turnover triggers. The VAT number, the SIRET and the Kbis together form the business-identity trio every French counterparty checks; the impots.gouv.fr professional portal and the INPI desk explain the sequencing from abroad.
Profits travel back to the foreign parent mainly as dividends, management fees or interest on advances, and each road has its own toll. Dividends from a French subsidiary to a foreign parent bear French withholding (retenue à la source) unless a tax treaty or the European parent-subsidiary directive route reduces or removes it, and the parent’s home country then taxes or exempts them under its own rules, a treaty question that belongs in a pre-distribution memo, not in a post-payment dispute. Inside France, the domestic mother-daughter regime (régime des sociétés mères et filiales) matters when the French subsidiary itself owns French operating companies or when a French holding sits between the foreign parent and the business: Article 216 of the General Tax Code allows a parent to deduct from its net profit the net income from qualifying participations, “défalcation faite d’une quote-part de frais et charges”, with that add-back “fixée à 5 % du produit total des participations, crédit d’impôt compris”, reduced to 1 percent inside an integrated group or for qualifying European holdings held for more than one year. The entry ticket is described in Article 145 of the General Tax Code: the regime “est applicable aux sociétés et autres organismes soumis à l’impôt sur les sociétés au taux normal qui détiennent des participations satisfaisant aux conditions ci-après”, including registered form or deposit and, in the full text, holding thresholds and duration that must be checked line by line for the year concerned. Management fees (management fees or frais de gestion intra-groupe) and interest are deductible for the subsidiary only if they reflect real services actually rendered and a market price: group policy slides do not prove a service, timesheets, reports, seconded staff and measurable outcomes do. Undocumented fees are the first line the tax auditor strikes, and reclassified fees become non-deductible with penalties, while excessive interest hits thin-capitalisation and transfer-pricing rules. The operational rule is therefore to choose one main repatriation channel per year, price it with a short benchmark note, invoice it with substance, and keep the treaty analysis next to the invoice.
Hiring and social charges complete the funding picture, because the subsidiary becomes a French employer the day it signs its first contract. Registration as an employer, prior hiring declaration (déclaration préalable à l’embauche), monthly social data returns (déclaration sociale nominative), payslips in French and euros, and contributions to URSSAF, the complementary pension body and the unemployment scheme apply exactly as to any French company; the foreign parent cannot pay the Paris team from abroad as posted workers (salariés détachés) on a permanent basis and cannot keep them as perpetual freelancers if they work under its authority. A subsidiary with one shared cash pool, one shared manager signing both sides of every contract, and staff who cannot tell which company employs them will struggle to defend its transfer prices, its VAT position and, as Part B shows, its separate patrimony.
B. When can a creditor still reach my foreign parent despite the subsidiary shield?
The shield is real but conditional. Properly created and run, the filiale SAS answers for its own debts on its own assets, and the parent loses, in the worst case, its investment, not its balance sheet. French law then lists the ways groups lose that protection, and each one corresponds to a paperwork failure the parent controls. The most dramatic is the extension of insolvency proceedings for confusion of assets (confusion des patrimoines) or fictitious company (fictivité). Article L621-2 of the Commercial Code provides that “la procédure ouverte peut être étendue à une ou plusieurs autres personnes en cas de confusion de leur patrimoine avec celui du débiteur ou de fictivité de la personne morale.” Confusion is shown through abnormal financial flows, intermingled accounts, shared cash without documentation, or assets used interchangeably; fictivity is shown when the subsidiary has no real activity, no autonomy and no purpose beyond masking the parent. The Court of Cassation polices the boundary in both directions. On 30 April 2025 in Cass. com., 30 Apr. 2025, No. 24-14.054, it recalled: “Selon ces textes, une procédure de liquidation judiciaire ouverte à l’égard d’un débiteur peut être étendue à une ou plusieurs autres personnes en cas de confusion de leurs patrimoines avec celui du débiteur.” It then quashed an extension built only on an unexplained intercompany balance, holding: “En se déterminant par ces seuls motifs, impropres à caractériser l’existence de relations financières anormales entre les sociétés Dardy et Gide, constitutives d’une confusion de leurs patrimoines, la cour d’appel n’a pas donné de base légale à sa décision.” The lesson for a foreign parent is symmetrical: courts require abnormal flows to extend, but groups that run abnormal flows without contracts, interest and repayment will supply exactly that proof. Separate bank accounts, documented advances, timely invoicing of intra-group services, distinct signatures and letterheads, and annual approval of the subsidiary accounts by the parent as shareholder are the daily antidote.
The second path is personal liability of the person who actually runs the subsidiary. A foreign CEO who gives daily orders to the Paris team, negotiates the lease, hires and fires, but leaves a nominal president on the Kbis to “keep things simple” may be treated as a de facto manager (dirigeant de fait, someone who directs without a formal title) with the duties, disqualifications and insolvency liabilities of a formal director. Conversely, a foreign parent that lets its subsidiary trade while manifestly insolvent, strips its cash through sudden repayments, or orders it to favour the parent over other creditors exposes its own directors to fault-based claims and, in insolvency, to liability for uncovered debts where the legal conditions are met. The fix is governance: appoint a president who really can say no, record shareholder decisions as shareholder decisions and management decisions as management decisions, never sign a subsidiary contract in the parent’s name without a clear mandate, and put any cash sweep (cash pooling) or centralised treasury agreement in writing with limits, remuneration and an exit right for the subsidiary.
The third path is voluntary: guarantees. French banks lending to a young subsidiary routinely ask the foreign parent for a comfort letter (lettre de confort) or a first-demand guarantee (garantie à première demande), and French landlords ask for a parent guarantee (caution de la maison mère) on Paris leases. These papers punch a clean hole in the shield by contract, which is their purpose, but groups sign them from headquarters without reading the French wording, then discover that a “support” letter drafted in English was translated into an autonomous guarantee under French law. Have every guarantee governed by an identified law, capped in amount and time, tied to a defined obligation, and signed by a person with authority to bind the parent, with the board resolution attached. The same discipline applies to tax and social debts: the subsidiary remains the taxpayer and the employer, yet late or missing filings multiply penalties that a small initial capital cannot absorb, and the parent that micro-manages the default may find itself answering for it. In the Paris region, where commercial rents, salaries and social charges run higher than elsewhere in France, undercapitalising the subsidiary while guaranteeing its lease personally is the most common self-inflicted combination: the parent pays like an owner but argues like a stranger when the dispute arrives.
Operational separation is therefore not an administrative luxury. Keep one French bank account for the subsidiary with its own signatories and limits, one accounting file with its own cut-offs, one minute book with shareholder decisions distinct from board papers of the parent, one domain-signature block identifying the employing entity, and one calendar that forces the yearly sequence: inventory, annual accounts (comptes annuels), management report where required, shareholder approval within six months of year-end, filing with the greffe within the following month (two months if filed online), RBE update whenever control changes, and tax returns on their own deadlines. That calendar, run from abroad through a French accountant (expert-comptable) and a lawyer with powers of attorney, is what keeps the subsidiary alone answering for its French debts when it matters.
Conclusion
A French subsidiary gives a foreign group what a branch cannot: a French legal person with its own Kbis, its own bank account, its own VAT number and its own employer status, capable of signing, hiring, borrowing and litigating in France while the parent stays abroad. The creation sequence rewards preparation: confirm the SASU as the vehicle, lock a Paris or Île-de-France address that matches every paper, legalise and translate the parent documents, deposit the capital and collect a clean certificate, draft articles that name the president and take over pre-registration acts expressly, declare the beneficial owners, and file once, correctly, on the Guichet unique. The operating sequence then decides whether the shield holds: fund through documented advances and priced capital, choose a treaty-checked channel for dividends, fees or interest, run French payroll through the subsidiary, and keep accounts, minutes and signatures separate enough that no creditor can describe abnormal financial relations. Built this way, the filiale SAS becomes a durable French home for the business: French customers see a French company, French authorities see a compliant taxpayer and employer, and the foreign parent sees a contained risk it can finance, govern and, in time, scale or sell.