You run a profitable company in London, New York, Dubai or Singapore, and France is your next market. Customers ask for a French invoice, a partner wants a local presence, or you need to hire your first person on the ground in Paris. The question that decides everything else comes first: should you open a branch of your existing company, or create a separate French company? A branch, called a succursale in French, lets you trade in France within weeks and at low cost, but it gives you no liability shield: every contract signed in Paris binds your foreign company directly. A French subsidiary, usually a SAS, costs more and takes longer to set up, but it ring-fences the risk. This guide explains both routes in practical terms, then walks through the full life of a branch in France: registration through the online single counter, corporate tax and VAT, hiring staff, opening a bank account, and finally closing the branch or converting it into a subsidiary. Every French acronym is explained along the way: Kbis is the official company identity extract, the greffe is the registry office of the commercial court, the INPI is the national industrial property office that runs the single counter, URSSAF is the social security collection agency, and BODACC is the official gazette where company events are published.
I. Branch or Subsidiary: the Choice That Shapes Liability, Cost and Speed
A. What a French branch is and how it differs from a French subsidiary
A French subsidiary is a new French company owned by your foreign company. The most popular form is the SAS, the société par actions simplifiée, a flexible joint-stock company that can be formed by a single shareholder. French commercial companies, in the words of the statute, « jouissent de la personnalité morale » from the day they are registered, which means the subsidiary is a separate legal person that owns its assets, signs its own contracts and answers for its own debts (article L210-6 of the Commercial Code). In a SAS, shareholders, in the statutory phrase, bear losses only « qu’à concurrence de leur apport », up to the amount of their contributions (article L227-1 of the Commercial Code). If the French business fails, creditors normally cannot reach the foreign parent, provided the subsidiary was properly funded and managed. The price of that shield is a full incorporation: articles of association, capital deposit in a blocked bank account, publication of a formation notice, registration, and a complete set of annual obligations.
A branch works the opposite way. It is the same foreign company acting in France through a local establishment, not a new person. The Paris Court of Appeal put it plainly in a December 2024 ruling about a German company’s Paris establishment: the establishment was only a branch of the German entity and, as such, it was « dépourvue de personnalité morale nonobstant son immatriculation », without legal personality despite being registered (Paris Court of Appeal, 3 December 2024, RG 23/10450). Registration does not create a person; every French business must register, and foreign commercial companies with a French establishment are expressly listed among those who register on declaration (article L123-1 of the Commercial Code). The practical consequence is direct and serious: contracts signed by the branch manager, debts run up in France, tax bills and court judgments all attach to the foreign head office. There is no minimum capital to deposit for a branch, which makes it cheaper to open, but there is also no wall between the French activity and the rest of your group.
Do not confuse the branch with a third option, the liaison office, or bureau de liaison. A liaison office may only carry out non-commercial tasks such as prospecting, advertising, information gathering or storage, and it has neither its own legal nor tax personality. The Ministry of the Economy explains that this structure is not registered with the trade register and is not subject to French taxation (Bercy guide to setting up a foreign business in France). The moment your Paris team starts selling, invoicing or delivering for profit, you no longer have a liaison office: you have a branch or a subsidiary, with registration and tax to match. Founders who invoice French clients through a so-called liaison office are the classic case of an undeclared stable establishment, and the tax consequences are examined in section II.
Choosing between the two vehicles comes down to four factors: liability, image, speed and cost. A branch wins on speed and cost, often mattering most for a first test of the French market, a single hire, or servicing one large client. A subsidiary wins on liability and image, because French clients, banks and landlords often prefer contracting with a French SAS shown on a Kbis extract, and because the parent stays shielded. Our pillar guide comparing SAS, SARL, branch and liaison office sets out the full comparison; the rest of this article assumes you have chosen the branch and shows how to run it properly.
B. How to register your branch in France while you live abroad
All business formalities in France now go through a single online counter, the guichet unique, operated by the INPI at formalites.entreprises.gouv.fr. The statute provides that every business files its creation, changes and cessation « par le dépôt d’un seul dossier », through one single file submitted electronically to one designated body (article L123-33 of the Commercial Code). Since 1 January 2025, registration filings must be made exclusively on that portal; paper filings at the greffe belong to the past, and the registries publish detailed branch checklists to match (Infogreffe guide to registering a foreign company branch). Your branch will be recorded both in the national business register, the RNE, which covers every business « exerçant sur le territoire français » an independent, commercial, craft or agricultural activity (article L123-36 of the Commercial Code), and in the trade and companies register, the RCS, kept by the greffe of the commercial court where the branch sits.
The statute targets your situation exactly: any commercial company whose registered office is abroad and which « ouvre en France un premier établissement », opens a first establishment in France, must file a copy of its current articles of association with the greffe at the latest when it applies for registration, and must then file every year the accounts it prepares, has audited and publishes in its home state (article R123-112 of the Commercial Code). In practice the file contains four blocks. First, the parent company’s documents: a copy of the articles in force on the filing day, translated into French where needed and certified as true by the branch manager, plus an original extract of the parent’s entry in its home public register, less than three months old, likewise translated. Second, proof of lawful occupation of the branch premises: a commercial lease, a domiciliation contract with an authorised domiciliation firm, or recent utility bills. A branch may be domiciled at its French manager’s home, but if the lease or the law forbids business use there, that solution lasts five years at most. Third, where the activity is regulated, the licence, diploma or authorisation the sector requires. Fourth, the file of the manager in France, the responsable: valid passport or identity card, or a current residence permit whose status allows RCS registration, plus a signed personal declaration of no criminal conviction, which the court clerk verifies with the criminal records office.
Foreign founders trip most often on paperwork from home. Any document in a foreign language needs a translation, and extracts from foreign public registers commonly need an apostille under the Hague Convention or full legalisation before the sworn translation. Names must match exactly across the passport, the parent register extract and the application; a middle name present on one paper and missing on another is a standard ground for rejection. The portal issues requests for correction with short deadlines, and an unanswered request closes the file, forcing a fresh filing. Prepare the chain before you click submit: order a fresh parent extract, have the articles certified, book the sworn translator, and confirm that the person signing as branch manager holds papers that allow registration. Companies from outside the European Union should also check whether their sector falls under foreign investment screening, the IEF procedure, before signing a lease.
Once accepted, the branch receives its SIREN number and its Kbis extract, the official identity card of the French establishment, showing the parent name, the branch address, the manager and the activity. In Paris and the inner suburbs, the competent greffe is the Paris commercial court registry, which handles the country’s heaviest volume; allow several days to a few weeks between a clean filing and the Kbis, longer if corrections are requested. The registry tariff for a branch registration is around sixty euros, but the real budget sits in translations, legalisation and, where used, the domiciliation contract. Keep the Kbis, the filed articles and every filing receipt: French banks, landlords, suppliers and the tax office will ask for them at each step described below.
II. Running the Branch Day to Day: Tax, Staff, Bank Account and Exit
A. Paying French corporate tax and VAT through your branch
Opening a branch means accepting French taxation on the French activity. Corporate tax applies, in the words of the Tax Code, to profits that count as « les bénéfices réalisés dans les entreprises », the profits earned by businesses operated in France, alongside profits attributed to France by tax treaties (article 209 of the General Tax Code). Foreign companies of capital type fall within corporate tax as a matter of principle (article 206 of the General Tax Code). The branch therefore files a French corporate return, pays instalments during the year and the balance after closing, exactly like a French company, but only on the profits attributable to the French establishment. Management fees charged by the head office, shared IT costs and interest on internal funding must be set at arm’s length and documented, because the French tax administration reviews intra-group flows into branches with the same attention it gives to subsidiaries.
The cost of ignoring this was spelled out by the Court of Cassation in February 2023. A Luxembourg company suspected of running its business from France while declaring nothing there challenged tax search-and-seizure orders, arguing discrimination and freedom of establishment. The Commercial Chamber rejected the appeal and held that a foreign company acting « par l’intermédiaire d’un établissement stable », through a stable establishment, is bound by the accounting and declaration duties of articles 54, 209 and 286 of the Tax Code, and that missing declarations support a presumption of deliberately omitted entries (Court of Cassation, Commercial Chamber, 15 February 2023, no. 21-13.288). In plain terms, trading in France without registering and declaring does not avoid tax; it adds dawn raids, penalties and criminal exposure to the bill. Register first, declare from the first euro, and the branch becomes a routine taxpayer instead of a target.
VAT follows the same logic. Anyone liable for VAT must declare the start of operations within fifteen days « du commencement de ses opérations », of starting operations, and file the information the administration requires (article 286 of the General Tax Code). A branch that sells goods or services in France charges French VAT on its invoices, files periodic CA3 returns and pays the balance, or claims refunds where input VAT exceeds output VAT, for example after fitting out Paris offices or buying French equipment. A branch that only buys in France without selling may still need a French VAT number to recover input tax. Distance sales from another European Union state, imports through French ports and subcontracting chains each carry their own registration and reverse-charge mechanics, so map your flows before the first invoice: the VAT number, the return calendar and the invoicing mentions must be right from day one, because corrections a year later are slow and attract audits.
Accounting duties run on two tracks. Under company law, every trader must keep an « enregistrement comptable des mouvements », a chronological record of movements affecting the business assets, checked by yearly inventory and closed into annual accounts (article L123-12 of the Commercial Code). Under tax law, the branch must produce all books, inventories and supporting documents on any request, and where the books are kept in a foreign language, « une traduction certifiée par un traducteur juré », a certified translation by a sworn translator, must be produced on demand (article 54 of the General Tax Code). Add the yearly filing of the parent company’s home-state accounts at the French greffe under article R123-112, cited above, and the discipline is clear: run French books in French or English with translation capacity, close them yearly, and file both the branch return and the parent accounts on time. Branches that keep only the head office accounts in another language learn this rule during their first audit, at the worst possible moment.
B. Hiring staff, opening a bank account, and closing or converting the branch
A branch hires under French employment law like any French employer. No hire may start work until the employer has completed the prior hiring declaration, since employment « qu’après déclaration nominative accomplie par l’employeur », may only begin after the employer’s nominative declaration to the social protection bodies (article L1221-10 of the Labour Code). That declaration, the DPAE, goes to URSSAF before the first day of work. From there the routine is monthly: French-format pay slips, monthly DSN social declarations, withholding of income tax at source, complementary health cover, known as mutuelle, and supplementary pension with Agirc-Arrco. Dismissals follow French procedure with notice, severance and proof requirements, and the branch manager signs on behalf of the foreign company, which is the legal employer shown in disputes. Founders abroad often discover the cost structure late: gross salary is only the starting point, employer charges add roughly forty to forty-five percent, and the branch has no lighter regime than a subsidiary here.
Groups that move their own people into France face a mirror rule worth knowing. Where an employee hired by a parent is seconded to a foreign subsidiary and signs with it, the parent must secure repatriation on dismissal by the subsidiary and offer a comparable job, since the statute provides that the parent « assure son rapatriement en cas de licenciement », ensures repatriation on dismissal (article L1231-5 of the Labour Code). Time abroad counts for notice and severance. The provision technically addresses French parents and foreign subsidiaries, but it shows the mindset of French courts: employee movement inside a group never strips the worker of protection, and branch staff hired locally enjoy the full French dismissal and trial-period regime from the start.
Banking deserves its own plan. A branch needs a French business account to receive clients, pay salaries and be debited for VAT and social charges, yet foreign-owned structures are the clients banks check longest: parent documents, translated articles, Kbis, manager identity and proof of address, sometimes the parent’s accounts. Where a company with a French presence is refused an account, the law gives a second door: the right to a deposit account with the bank of one’s choice, in the statutory words « à l’ouverture d’un compte de dépôt », to the opening of a deposit account (article L312-1 of the Monetary and Financial Code). After refusals, the Banque de France designates a bank that must open the account. File refusals in writing, keep every letter, and start the banking process in parallel with registration rather than after the Kbis: founders who wait lose a month of invoicing.
Paris and the Ile-de-France region add practical specifics founders should price in. The Paris commercial court registry processes the country’s largest branch volume, so a clean file moves fast but an incomplete one waits in the longest queue. Disputes follow the branch: the Paris commercial court opened secondary liquidation proceedings for a German company’s Paris establishment at the request of its French employees, a reminder that Paris judges are fully equipped to deal with foreign-company branches on their soil. Office rents and salary levels run well above the national average, which changes the branch-versus-subsidiary maths, and regulated sectors from finance to security to health add licensing steps before any registration. None of this blocks a project; it simply means the Paris setup budget and calendar should be built on Paris figures, not national averages.
Closing a branch is a formal process, not a disappearance. File cessation through the same single counter, settle the final corporate tax and VAT returns, close payroll with final DSN filings and employment certificates, terminate or transfer the lease, and apply for removal, the radiation, from the registers. Keep all books and employment records for the statutory retention periods, because audits routinely arrive after closure. Where the test succeeded and the group wants a French company after all, the usual path is to incorporate a SAS, transfer the business, and move contracts and staff across: employment contracts in progress transfer automatically to the new employer, since « tous les contrats de travail en cours » survive a change in the employer’s legal situation (article L1224-1 of the Labour Code). Run the incorporation first, then the transfer, then the branch radiation, so clients and staff never face a gap.
The same Paris insolvency case from section I carries the closing lesson for managers. After the German company’s Paris branch entered secondary liquidation, prosecutors sought a three-year management ban against the man presented as head of the French establishment for allegedly incomplete accounts. The Court of Appeal refused: a branch manager is not one of the « dirigeants de droit ou de fait », de jure or de facto managers of a legal person, exposed to personal insolvency sanctions (article L653-1 of the Commercial Code), precisely because the branch has no personality of its own, and action against the head of the German company belonged to the German court running the main proceedings. The shield works both ways: creditors of a branch look to the foreign parent, and the parent’s home insolvency governs the group, while French courts protect local employees and local assets through secondary proceedings.
Conclusion
A branch lets a foreign company test and serve France quickly: one filing, no capital to lock up, and the parent’s full weight behind every French commitment. That weight is also the risk, because branch debts are the parent’s debts, French tax applies to French profits from the first year, and staff, VAT and accounts follow the same rules as for any French business. Choose the branch for speed and reversibility, choose the subsidiary where liability and local image matter most, and in both cases register before trading, declare from the first euro, keep French books with translation capacity, and file the parent accounts yearly. Done in that order, the branch becomes what it should be: a light, lawful bridgehead that can grow into a French subsidiary when the market answers.