A foreign company that wants to test the French market does not always need to incorporate a French subsidiary or register a full commercial branch on day one. A liaison office, also called a representative office, can provide a local presence for market research, product information, meetings and preparation. It is not a French company, it has no separate legal personality and it is not meant to invoice French customers or sign sales contracts.

That simplicity has a strict limit. The legal label “liaison office” does not protect a group whose French team negotiates the essential terms of contracts, accepts orders, provides services, stores stock for delivery or habitually binds the foreign head office. Those facts can create a French establishment, a French tax presence or an obligation to register a different form of business. The consequences may include corporation tax, value added tax, accounting records, employer obligations and a dispute over where the company’s commercial activity is actually carried on.

This guide answers the practical questions a foreign founder or general counsel should resolve before renting premises or hiring a French representative: what the office may do, which filings produce a SIREN or SIRET number, when a Kbis or RCS registration is needed, how the first employee changes the analysis, and when a branch or subsidiary is safer. It also gives a documented way to assess permanent-establishment risk and request a French tax ruling before the model is launched.

For the wider incorporation and corporate-structuring context, see the firm’s French company formation and corporate structuring guidance. This article focuses on the narrower decision between a liaison office, a branch and a subsidiary.

I. Can a foreign company open a liaison office in France without a subsidiary?

A. What can a French liaison office do before it becomes commercial?

A liaison office is a local extension of the foreign company, not a new legal person. It normally has no share capital, no separate corporate assets and no independent authority to contract. The foreign head office remains the party that sells, invoices, supplies, warranties and bears the commercial liability. The office is useful when the business wants information before it commits to a permanent operating structure.

The permitted work is usually described as preparatory or auxiliary. In practical terms, the office may:

• study French demand, competitors, prices and distribution channels;
• present the foreign company, its products or its services to potential partners;
• attend trade fairs, conferences and professional events;
• collect non-binding market feedback and report it to the foreign head office;
• organise meetings, demonstrations or information sessions without accepting an order;
• coordinate local market research or communication providers;
• prepare a later branch, subsidiary, acquisition or distribution project; and
• provide a local contact address for administrative and commercial introductions.

The Ministry of Economy’s guide to implanting a foreign company in France describes the liaison office as a structure for non-commercial activities such as prospecting, advertising, information and other preparatory or auxiliary work. Current CCI Paris Île-de-France guidance, updated on 25 June 2026, gives the same practical orientation: the office can explore the market and conduct negotiations, but the foreign company must sign the commercial contract and handle the order.

The distinction is functional rather than cosmetic. A slide deck, email, business card or website may describe the local presence as a “bureau de liaison”, but the administration and a court will look at what the people in France actually do. A French representative may explain a product and pass a customer’s requirements to the head office. The representative should not accept the order, confirm the price, promise delivery, issue the invoice or make a binding commitment on behalf of the parent.

The public registration rules also distinguish an operating establishment from a foreign company that has no French permanent establishment. Article L. 123-1 of the French Commercial Code provides, in the official wording, « 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 provision is the starting point for a foreign company that has crossed the line into a French establishment subject to the commercial register. It should not be used to assume that every low-intensity liaison office must automatically have a French subsidiary.

Since the reform of the French business registers, the National Register of Enterprises, or RNE, is also important. Article L. 123-36 of the French Commercial Code expressly includes « Les entreprises étrangères sans établissement stable en France ». This means that an overseas company can have a French identification and formalities record for a limited purpose without becoming a French legal entity and without necessarily being treated as a branch in the commercial sense. The registration route must be chosen from the facts, not from the word used by the founder.

A useful internal test is to separate “information” from “execution”. Information includes describing the group, identifying prospects, explaining technical features and reporting feedback. Execution includes taking an order, accepting a price, managing delivery, providing a paid service, collecting money or deciding whether the foreign company will perform. The more the French office performs execution, the harder it becomes to defend a purely auxiliary role.

The following matrix helps a board approve the operating model:

Activity in France	Liaison-office position	Risk or next step
Market research and competitor analysis	Normally compatible	Keep the research reports and the head-office instructions.
Product presentations and trade fairs	Normally compatible	Use non-binding materials and route commercial offers to the head office.
Negotiating commercial terms	Possible only as preparation	Do not give the French representative authority to accept or bind.
Signing contracts or accepting orders	Not compatible with a purely auxiliary office	Assess a branch, subsidiary or another registered operating model.
Stock held for French customer delivery	High-risk fact	Review warehouse, VAT, customs and permanent-establishment consequences.
French employees carrying out sales or services	Possible but fact-sensitive	Register the foreign employer and reassess the tax and social position.

The office should also avoid presenting itself as a separate French company. The French address can identify the foreign company’s local contact point, but invoices, quotations and contracts should state the legal name, registered office and governing law of the foreign head office. The signature block should identify the representative’s limited authority. A separate French bank account may be commercially convenient, but it does not create legal personality and it may lead the bank to request a SIRET, a Kbis or an RCS registration.

The CCI and Bpifrance materials are useful, but they should be read with the actual project documents. Their guidance confirms that the office cannot conclude contracts and that sales and services remain the responsibility of the foreign head office. It also explains an important operational point: if the office employs people covered by French social security, the foreign company must obtain the French identifiers needed to manage those obligations.

For a foreign founder, the safest document is a short “authority and activities memorandum” approved by the head office. It should list authorised activities, prohibited acts, approval levels, signatories, invoicing responsibility, customer-contact rules, data-storage rules and the trigger for a legal review. The memorandum should be communicated to the French representative and reflected in employment contracts, powers of attorney, emails, sales tools and CRM permissions. That evidence will matter if the tax administration later asks whether the office was genuinely auxiliary.

B. When does a liaison office become a French permanent establishment?

A permanent establishment is a French taxable presence of a foreign company. It is not the same thing as a French subsidiary. A subsidiary has its own legal personality and normally files its own accounts and tax returns. A permanent establishment is a factual connection through which the foreign company conducts business in France. A branch can be the visible legal form of that connection, but an unregistered office, a warehouse or a dependent representative can also create risk.

The French tax administration describes three non-cumulative routes for an activity to be treated as an enterprise operated in France: a French establishment, operations carried out through a dependent representative, or operations forming a complete commercial cycle in France. Its official permanent-establishment guidance also states that a fixed place of business with its own activity or a dependent agent with power to bind the company is the usual pattern. The relevant tax treaty must be checked because treaty wording can govern the allocation of taxing rights.

Article 209, I of the French General Tax Code links French corporate tax to « les bénéfices réalisés dans les entreprises exploitées en France ». The French wording is concise, but the factual question is not: which French activities generated the profit, which resources performed them, and where did the commercial cycle take place? A foreign company cannot answer those questions solely by pointing to a foreign invoice or a foreign place of signature.

Article 164 B, I, d of the same Code identifies as French-source income « Les revenus tirés d’activités professionnelles, salariées ou non, exercées en France ou d’opérations de caractère lucratif au sens de l’ article 92 et réalisées en France ». This provision is not a substitute for the applicable treaty analysis, but it shows why the location of people and operations matters. A liaison office that develops a complete sales cycle can create French-source consequences even if the foreign head office signs the final document.

The Supreme Court’s commercial chamber made the accounting consequence clear in its decision of 15 February 2023, no. 21-13.288, ECLI:FR:CCASS:2023:CO00134, published in the Bulletin. The Court wrote: « Une société de droit étranger est tenue, lorsqu’elle exerce une activité en France par l’intermédiaire d’un établissement stable ». The decision concerned a foreign company’s French taxable activity and accounting evidence. It does not mean that every representative office is a permanent establishment; it does mean that a company that operates through one must be able to justify the French transactions and records.

There are several recurring red flags:

• the French representative can accept a purchase order or make the final commercial decision;
• the foreign head office routinely rubber-stamps contracts negotiated to completion in France;
• the French team performs the core service or manages the product delivery;
• stock is held in France for regular fulfilment of French customer orders;
• the French office has a dedicated sales target and its employees are paid by reference to closed French sales;
• the French representative signs quotations, order confirmations or customer amendments;
• the office holds itself out as the operational French branch of the group; or
• the French location is where the essential decisions, records and personnel are concentrated.

No single fact automatically decides the case. A small office may still be a permanent establishment if its people have decisive authority. Conversely, a substantial research team may remain auxiliary if it does not perform the foreign company’s core business and the evidence supports that position. The analysis should be repeated when the team grows, when a French customer asks for local contracting, when the company rents a warehouse or when a new service is delivered from France.

The office’s tax exposure can also arise without a traditional corporation-tax branch. For example, French employees may be subject to payroll and social-security rules, local premises may create a contribution foncière des entreprises (CFE) question, and transactions may create value added tax (VAT) or invoicing obligations. The board should distinguish the question “is there a permanent establishment for profit tax?” from the separate questions “is there an employer?”, “is there a fixed establishment for VAT?” and “does the company have French-source income?”

If the facts are uncertain, a foreign company can prepare a written rescript request. Article L. 80 B, 6° of the Book of Tax Procedures protects a good-faith taxpayer that asks the administration, on the basis of a precise and complete presentation, for « l’assurance qu’il ne dispose pas en France d’un établissement stable ou d’une base fixe ». The provision refers to a three-month response period where its conditions are met. The request must describe people, premises, contracts, authority, services, stock, customer contacts, payroll and the relevant tax treaty; a generic question will not protect the intended model.

The rescript should be treated as a governance project, not as a formality delegated to the office manager. Prepare an organisation chart, the foreign company’s articles or registry extract, the French lease, the draft employment contracts, powers of attorney, sample sales correspondence, website language, customer journey, order-routing process and accounting flow. Identify the country of residence of the company, the applicable treaty, the proposed start date and any French subsidiaries or branches already in the group. Keep the facts consistent between the rescript and the actual launch.

A foreign founder should also ask whether the liaison office is being used to postpone a decision that has already been made in substance. If the business plans to sell French customers, employ a sales team, maintain stock and provide after-sales service from France, a branch or subsidiary may be the honest structure from the outset. Trying to keep a commercial operation inside a liaison-office label can create back-tax, interest, penalties, accounting and reputational exposure that is more expensive than registering the correct structure.

II. How should a foreign company create and operate a French liaison office?

A. What registration, tax and employment steps are required?

There is no single “liaison-office incorporation” comparable to the formation of an SAS or SARL. The first step is to document the foreign company and the intended activities, then determine which French formalities are required for that specific model. The French business formalities portal and the INPI explanation of the Guichet unique should be used for the current filing route. INPI means the French National Institute of Industrial Property; the Guichet unique is the one-stop portal for business formalities, not a new corporate entity.

Start with a classification table:

French presence	Main identity	Typical consequence
Pure market-research office, no French employee and no operating establishment	Foreign company’s liaison contact	Keep evidence of auxiliary activities; confirm whether any declaration is useful or required.
Liaison office with staff covered by French social security	Foreign company without a French permanent establishment, with French employer obligations	Obtain the SIREN/SIRET identifiers required for URSSAF and payroll management.
Permanent French commercial establishment	Foreign company’s branch or secondary establishment	Assess RNE, RCS, Kbis, tax, accounts, VAT and representative requirements.
Separate French entity	SAS, SASU, SARL or another subsidiary	Incorporate, appoint officers, file beneficial-owner information and run a French company.

The SIREN is the nine-digit identifier of the legal entity or foreign enterprise recorded in France. The SIRET identifies a particular establishment and adds a location number. The RNE is the National Register of Enterprises. The RCS is the Register of Commerce and Companies maintained through the competent commercial court registry. A Kbis is the official extract evidencing a company’s registration in the RCS; it is not a universal identity document for every foreign employer or every liaison office.

This distinction matters in practice because a bank, landlord, payment provider or public body may ask for a Kbis even though the intended legal model only produces a SIREN or SIRET. Article L. 123-36 of the Commercial Code provides that the RNE covers « Les entreprises étrangères sans établissement stable en France ». A company that is not a French subsidiary can therefore still need a French formalities record. The right response to a Kbis request is to explain the status and ask which official certificate or identification extract is accepted, not to register a branch automatically without reviewing the consequences.

If the office is treated as a permanent secondary establishment, the RCS rules become central. Article R. 123-40 of the Commercial Code defines a secondary establishment as « tout établissement permanent, distinct du siège social ou de l’établissement principal ». A permanent French office led by a person who can bind the company can fit that definition even if the foreign parent keeps its registered seat abroad. Article R. 123-63 then addresses the application for secondary registration by an already registered legal person. The precise filing must be checked against the company’s country, form and French activity.

The document file usually includes the foreign company’s registry extract, constitutional documents, proof of the registered office, a decision approving the French presence, identity and authority documents for the representative, proof of premises, translations where required, and a description of the activity. Some documents may need an apostille or legalisation, depending on the country and the authority receiving them. Keep a version history and ensure that the foreign company’s name, legal form, registration number and representative’s authority are identical across the portal, lease, bank file and employment documents.

The first French employee changes the analysis even when the office makes no sales. A foreign company can be an employer in France without creating a French subsidiary. Article L. 1221-10 of the Labour Code states: « L’embauche d’un salarié ne peut intervenir qu’après déclaration nominative accomplie par l’employeur auprès des organismes de protection sociale désignés à cet effet ». This is the DPAE, the prior hiring declaration. It must be planned before the employee starts work, not after the liaison office receives its first customer.

URSSAF means the Union for the Recovery of Social Security Contributions and Family Allowances, the body that collects many French social contributions. Bpifrance explains that an overseas company employing staff in a liaison office may need a SIRET for the foreign-employer service of URSSAF. The company should set up payroll, workplace insurance, occupational-health arrangements, paid-leave records, payslips, social declarations and a French contact for employee questions. The office’s no-sales status does not remove those employer duties.

The social-security rule is also clear for a person working in France. Article L. 111-2-2 of the Social Security Code includes « Qui exercent sur le territoire français : a) Une activité pour le compte d’un ou de plusieurs employeurs, ayant ou non un établissement en France ». Treaties, European coordination rules and certificates such as the A1 can alter the result for a temporary posting, but the foreign company should obtain the certificate before relying on an exception. An overseas payroll provider’s assumption is not enough.

Tax registrations should be separated by tax:

• Corporate income tax: IS, or impôt sur les sociétés, applies to taxable profits allocated to France when the facts and treaty permit France to tax them. A pure auxiliary office may have no profit-tax base, but the conclusion should be documented.
• VAT: TVA, or taxe sur la valeur ajoutée, depends on the nature and place of the supply, the customer and the establishment used to provide it. A liaison office should not invoice services merely because it has a French address.
• Local business tax: CFE, or cotisation foncière des entreprises, may arise when a professional activity and premises are present. Do not assume that an office is exempt once it has employees and a SIRET.
• Payroll taxes: remuneration paid to employees may trigger social contributions and, depending on the situation, tax on salaries, apprenticeship or training contributions.

For the CFE calendar, Article 1478 of the General Tax Code provides that « La cotisation foncière des entreprises est due pour l’année entière par le redevable qui exerce l’activité le 1er janvier » and contains the creation-year rule. The wording does not decide whether a particular liaison office is carrying on a taxable professional activity; it explains why the date of activity and the status of the premises belong in the launch file. Ask the local tax office, or SIE (Service des impôts des entreprises), to confirm the position where the facts are unusual.

The foreign company should also decide who will access the French professional tax account, who receives correspondence from the SIE, who approves payroll and who signs any response to the tax administration. A power of attorney can allow a French accountant or lawyer to communicate with the authorities, but it does not transfer the company’s legal responsibility. Keep the mandate, its scope, expiry date and revocation process.

Finally, review data protection and employment records. A liaison office may process prospect names, professional contact details, product requests and employee information. The foreign group should identify the controller, data flows, retention period, security measures and any transfer outside the European Economic Area. This is not a substitute for the corporate classification, but it is part of operating a real French presence responsibly.

B. When should the company convert it into a branch or subsidiary?

The conversion question should be answered before the office signs its first binding contract. A branch is the foreign company’s French establishment without separate legal personality. A subsidiary is a new French legal person, commonly an SAS, SASU or SARL, with its own officers, accounts, contracts, assets and liabilities. The best structure depends on control, liability, tax, financing, employment, regulatory permissions, customer expectations and the group’s exit plan.

A branch may be appropriate where the parent wants direct control, is prepared to recognise French taxable activity and does not need a liability ring-fence. It normally requires a commercial registration, a French representative, local accounting and tax compliance, and publication or filing of information about the foreign company. The parent remains exposed to the branch’s obligations. A subsidiary may be preferable where French contracts, staff, premises, inventory or regulated activity will be substantial, or where investors and customers expect a French contracting entity.

The French company’s corporate interest must also be considered where the subsidiary is asked to support its foreign parent. Article 1833 of the Civil Code states: « La société est gérée dans son intérêt social, en prenant en considération les enjeux sociaux et environnementaux de son activité ». A French subsidiary should not give a guarantee, transfer assets, provide services for no consideration or accept an uneconomic instruction merely because the parent controls it. The board or president should record the business rationale, price, benefit, risk and approvals.

The office should be converted when one of the following practical triggers occurs:

• French staff need to sign or accept customer contracts;
• the French team carries out the essential service or delivery;
• customers require a French invoice, French warranty or French contracting party;
• stock is regularly imported, stored and delivered from French premises;
• the representative receives a sales commission tied to completed French contracts;
• the foreign parent’s management decisions are made in France;
• the group needs a French bank account, financing or commercial insurance that cannot be documented through a liaison status; or
• the office’s budget and headcount no longer correspond to a limited market-entry phase.

Do not wait for a customer or the tax administration to force the choice. Prepare a transition plan with a cut-off date. Map contracts, employees, leases, stock, equipment, data, insurance, IP licences and customer notices. Decide whether contracts should be novated to a subsidiary, signed by the branch or kept with the foreign head office. Identify the tax consequences of moving assets or inventory. Close or update the old formalities record rather than leaving a liaison office and a new branch with inconsistent descriptions.

Where the group keeps the liaison model, maintain quarterly controls. Review a sample of quotations, customer emails, meeting notes, CRM rights, invoices, bank statements, payroll, travel records and powers of attorney. Ask whether the French representative accepted any term, whether a French employee delivered a paid service, whether stock was used to satisfy a customer and whether the head office actually approved the final deal. Record the answer in a compliance log signed by the responsible director.

The log should distinguish commercial activity from preparation. It can record the number of prospects, meetings and research projects, but it should not be used to disguise completed sales as “market testing”. If a prospect became a customer, identify who negotiated, who accepted, who invoiced, who delivered and which entity earned the margin. The purpose is not to eliminate all French business; it is to ensure that the legal and tax structure matches the business actually carried out.

Related-party arrangements deserve special attention during the transition. A French liaison office may receive a cost recharge from the parent for rent, staff, marketing or travel. If the office becomes a branch, the allocation of profit and supporting accounting entries must be reviewed. If the group incorporates a subsidiary, services, trademark licences, shareholder loans and guarantees need written agreements. Describe the service, pricing method, approval, VAT treatment, payment terms and termination rights. A single unexplained “management fee” is a poor substitute for an intercompany file.

Keep the public description accurate. A French website that states “our French office sells and services customers” may conflict with a claim that the office is only auxiliary. Employment advertisements, LinkedIn profiles, email signatures and trade-show materials can be evidence of the office’s real function. Use a description that is commercially clear but legally accurate: “French market liaison office of [foreign company], responsible for market intelligence and non-binding business development; contracts are concluded by [foreign company].” Update it when the model changes.

Where the company is unsure whether a permanent establishment exists, the rescript route remains available. In addition to the wording of Article L. 80 B, 6° of the Book of Tax Procedures, the tax administration’s official permanent-establishment page explains that the request must be based on a written, accurate, complete and good-faith presentation. The file should contain the facts that could make the office operational, not only the facts that support the desired conclusion.

A rescript is not a substitute for a treaty review or for compliance with employment, VAT, customs or corporate-registration rules. It is a tool to reduce uncertainty on the question presented. If the company later gives the representative wider powers, adds a warehouse, changes the product or starts delivering services, the prior answer may no longer cover the new facts. Set a review date and a change-control rule.

For a general counsel, the decision can be reduced to four questions:

1. Does the French team only prepare and inform, or does it execute the foreign company’s business?
2. Does anyone in France have authority, in law or in practice, to bind the foreign company?
3. Are there French employees, premises, stock, services, revenue or a complete commercial cycle?
4. Can the group produce consistent documents proving the answer and update them when facts change?

If the answers point to preparation, a liaison office can be an efficient first step. If the answers point to execution, the office should be treated as a potential branch or permanent establishment and the group should decide whether a French subsidiary offers better liability and governance protection. That decision should be made with a written tax and corporate analysis, not by relying on a label copied from an overseas template.

Conclusion

A liaison office can let a foreign company test the French market, meet prospects and prepare a later launch without immediately incorporating a French subsidiary. Its protection depends on its actual limits: it must remain non-commercial, auxiliary and unable to bind the foreign head office. The office should not invoice French customers, accept orders, deliver the core service, manage regular stock fulfilment or present itself as a French operating company.

The practical file should explain the business model, authority limits, premises, staff, RNE/RCS position, SIREN and SIRET, payroll, URSSAF, VAT, CFE and corporation-tax analysis. When the French presence begins to execute the business, the group should move to a branch or subsidiary and align contracts, tax registrations, accounts and public descriptions. Where the permanent-establishment question remains uncertain, a precise rescript request under Article L. 80 B, 6° can provide a documented answer.

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