You run a company in London, New York, Dubai or Singapore, your customers are increasingly French, and a distributor, a platform or a public buyer now asks for a French Kbis (the official registration certificate issued by the commercial court clerk, the greffe, which proves that a business is registered and who may sign for it), a French VAT number, or simply an invoice with French VAT. The question that follows is always the same: should the foreign company open a branch in France, the succursale (a permanent French establishment of the foreign company, with no legal personality of its own), or create a French subsidiary, the filiale (a separate French company, most often a SAS, the société par actions simplifiée, the flexible joint-stock company foreign founders use by default), while you keep living abroad? The answer shapes everything that matters afterwards: who is liable for French debts, how profits are taxed, who pays French social contributions, and what happens when the tax office or a creditor comes knocking. French practice shows that founders who choose quickly and cheaply often discover the price years later, in a reassessment, a frozen account, or a summons served directly on the French premises. The administration guide for foreign investors states the divide bluntly: a branch has no separate legal existence, since a branch has no legal autonomy or patrimony of its own apart from the parent company, while a subsidiary is a full legal entity in its own right (official investor guide of the Ministry for the Economy). This article explains, for a business reader managing from abroad, how each route is registered, taxed and run, which director status and social charges apply, and how to close the gaps that trigger personal liability.
I. Running the French operation as a branch: registration, tax and hard limits
A. How a foreign company registers a branch in France and what the Kbis proves
A branch is the fastest way to show a French face, and the registration runs through the commercial court clerk of the place where the French premises sit. Article L123-1 of the Commercial Code requires registration for “Les sociétés commerciales dont le siège est situé hors d’un département français et qui ont un établissement dans l’un de ces départements”, which is exactly the situation of a British, American or Gulf company opening an office, a shop or a warehouse in Paris, Lyon or Lille. Since the 2023 reform of business formalities, the filing passes through the single online window, the guichet unique operated by the INPI (the Institut national de la propriété industrielle, the French intellectual property and business-registry office), and feeds the national business register, the RNE (the registre national des entreprises, the single national register that replaced the separate trade and companies register entries), as well as the trade and companies register, the RCS (the registre du commerce et des sociétés, kept by each commercial court clerk). For a first French establishment of a company headquartered abroad, Article R123-112 of the Commercial Code sets a precise documentary duty: “Toute société commerciale dont le siège est situé à l’étranger et qui ouvre en France un premier établissement est tenue de déposer au greffe du tribunal de commerce dans le ressort duquel est situé cet établissement, au plus tard en même temps que la demande d’immatriculation, une copie de ses statuts en vigueur au jour du dépôt”. In practice the foreign parent must therefore produce its current articles, translated into French by a sworn translator, designate the person running the French establishment, and then file every year “les documents comptables qu’elle a établis, fait contrôler et publier dans l’Etat où elle a son siège”, with the filing due within the deadline of the parent’s home law. A founder who treats the branch as a light representative office and files nothing exposes the company from day one: the establishment exists commercially but is undocumented, and every later control starts with that gap.
The Kbis the branch receives looks reassuring, and it is genuinely useful: it carries a SIREN number (the unique nine-digit business identifier issued by the statistics office), it lets the branch open a bank account, sign a commercial lease and appear in tenders. But it proves registration, not separation. The Paris Court of Appeal stated this with full clarity for the French establishment of a German company, holding that it “ne constituait qu’une simple succursale de l’entité de droit allemand. En tant que telle, elle était dépourvue de personnalité morale nonobstant son immatriculation au registre du commerce et des sociétés”, decision of the Paris Court of Appeal, commercial chamber 8, 3 December 2024, RG 23/10450, published on the official record of the Court. Three consequences follow for a founder living abroad. First, every contract signed by the branch binds the foreign parent directly, with no corporate veil between the Paris office and the head office balance sheet. Second, a creditor or a court can serve and seize in France for the parent’s debt, because the branch’s assets are the parent’s assets. Third, the person presented as the head of the French establishment is not the director of a French company: in that same case the court refused to punish the French-based manager as the director of a legal person, ruling “Déboute le ministère public de sa demande de sanction personnelle à l’encontre de M. [L] [E]”, precisely because a branch manager is not the director of a company with its own personality. The branch is therefore quick and cheap, but it leaves the foreign company fully exposed in France, and it gives the manager a hybrid status that courts analyse case by case. Founders who want the full formation sequence for a French company, bank account, Kbis, VAT and first hire, can use our hub guide Setting Up a Company in France as a Foreign Founder alongside this comparison.
Two practical warnings complete the registration picture. The lighter form, the liaison office or bureau de liaison (a non-commercial representative presence that may prospect and promote but may not conclude business), is only safe while it truly does no commercial business: the moment the Paris team negotiates and closes deals, invoices, or holds stock it controls, the administration reclassifies it as a branch or a permanent establishment with retroactive tax and social consequences. And operating with no registration at all is the worst option: a company that in fact does business in France without declaring its activity or filing returns can see its activity treated as concealed, with the recovery period stretched to ten years. The Nîmes Court of Appeal confirmed this mechanism against a company taxed in France, noting “Etant établi ici que la société [29] n’a ni fait connaître son activité exercée en réalité en France à un centre de formalités des entreprises ou un greffe de tribunal de commerce, ni déposé dans le délai légal les déclarations qu’elle était tenue de souscrire, cette activité est réputée occulte”, decision of the Nîmes Court of Appeal, 9 January 2025, RG 23/02221, published on the official record of the Court. Register the branch properly or create a company; the middle ground of quiet trading is where the heaviest reassessments grow.
B. How the branch is taxed and charged in France: corporate tax, VAT and payroll without a legal shield
Once registered, the branch pays French tax on its French activity like a permanent structure, and the official investor guide of the Ministry for the Economy confirms that a branch, as a permanent structure of the foreign company, is subject to the French tax regime. The corporate income tax, the IS (the impôt sur les sociétés, the French corporate income tax levied on company profits), applies to the profits made in France. Article 206 of the General Tax Code lists the persons liable, providing that “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 n’ayant pas opté pour le régime fiscal des sociétés de personnes”, and foreign companies operating in France fall into the tax net through the territoriality rule of Article 209 of the General Tax Code, under which taxable profits are determined “en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”. In plain terms, the French branch files and pays corporate tax on the profits attributable to its French activity, at the standard French rate with instalments during the year, while the parent’s foreign profits stay outside French tax unless a treaty assigns them to France. A double-tax treaty usually prevents the same profit being taxed twice, by allocating taxing rights between the two States, but it does not exempt the branch from declaring and paying in France. The branch must therefore keep books capable of isolating the French result, hold transfer-pricing documentation for its dealings with the head office, and expect the tax office to test whether the margin left in France matches the functions performed, the staff employed and the risks assumed in Paris rather than abroad.
VAT follows the same logic of French presence, with sharper deadlines. Article 256 of the General Tax Code provides that “Sont soumises à la taxe sur la valeur ajoutée les livraisons de biens et les prestations de services effectuées à titre onéreux par un assujetti agissant en tant que tel”, and the branch, acting as a taxable person in France, charges French VAT on its local sales and recovers VAT on its French purchases through the standard returns. Article 259 of the General Tax Code locates services where the business customer sits, stating “Le lieu des prestations de services est situé en France : 1° Lorsque le preneur est un assujetti agissant en tant que tel et qu’il a en France : a) Le siège de son activité économique”, which is why services the head office bills to the French branch, or the branch bills to French clients, need a correct French VAT treatment with a French VAT number, the numéro de TVA intracommunautaire (the individual VAT identification number issued by the French tax office to each taxable business). Where a supplier established outside France sells to a French taxable customer, Article 283 of the General Tax Code shifts the burden, since “est effectuée par un assujetti établi hors de France, la taxe est acquittée par l’acquéreur, le destinataire ou le preneur qui agit en tant qu’assujetti et qui dispose d’un numéro d’identification à la taxe sur la valeur ajoutée en France.” The branch then declares through Article 287 of the General Tax Code, under which “Tout redevable de la taxe sur la valeur ajoutée identifié conformément aux dispositions combinées des articles 286 ter et 286 ter A est tenu de remettre au service des impôts dont il dépend et dans le délai fixé par arrêté une déclaration conforme au modèle prescrit par l’administration.” Missed registrations, late returns and undeclared intra-group flows are the classic triggers of branch reassessments, and a foreign company suspected of running an undeclared French establishment can face coercive investigation: in the Orefa case, the commercial chamber of the Cour de cassation (the French supreme court for civil and commercial matters) upheld tax search-and-seizure operations authorised against a Luxembourg company suspected of tax fraud through its presumed French presence, rejecting the company’s challenge, decision of the Cour de cassation, commercial chamber, 15 February 2023, pourvoi 21-13.288, published in the bulletin and available on the official record of the Court. The lesson for founders is operational: activate the French VAT number before invoicing, file monthly or quarterly returns through the business tax office, the SIE (the service des impôts des entreprises, the tax office handling business tax), reconcile intra-group invoices with the VAT returns, and never let the branch trade for months on the parent’s foreign VAT number.
Payroll completes the branch cost picture, and distance changes nothing. Staff hired by the branch are French employees under French employment law, declared to the URSSAF (the union de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the body collecting social contributions) through the pre-hiring declaration, the DPAE (the déclaration préalable à l’embauche, filed before any hire takes effect), with monthly social data sent through the single payroll return, the DSN (the déclaration sociale nominative, the monthly digital payroll report). The manager running the branch is typically an employee of the foreign company posted or hired locally, affiliated to the French general social scheme, while the foreign founder who only owns the parent has no French social status at all. That asymmetry surprises many owners: the branch pays full French employer charges on its team, its manager accrues French rights, but the non-resident shareholder takes nothing out through salary unless a genuine employment or mandate is set up and charged. Where a branch operates staff without declarations, the exposure is criminal as well as financial, through concealed work and contribution evasion, and our companion guide explains how an URSSAF control runs and how to challenge it from abroad: Your French Company Is Audited by URSSAF and You Live Abroad. For Paris and Île-de-France branches, the competent commercial court is the Paris commercial court, the local URSSAF is the Île-de-France fund, and proceedings and filings run in French, so powers of attorney, translations and a local correspondent must be arranged before the first control, not after.
II. Creating a French subsidiary from abroad: the SAS, the director and long-term control
A. Why a SAS subsidiary shields the foreign parent and how to form it from abroad
A subsidiary is a different legal animal: a French company in its own right, owned by the foreign parent, with its own assets, its own debts and its own liability shield. The vehicle foreign groups choose in the large majority of cases is the SAS, because it combines limited liability with almost total contractual freedom in governance. Article L227-1 of the Commercial Code states the foundation: “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 foreign parent, as sole or majority shareholder, therefore risks only the capital and current-account advances it puts into the French company, while the subsidiary signs leases, hires staff and faces customers in its own name. The alternative, the SARL (the société à responsabilité limitée, the limited liability company with a more rigid statutory framework), offers the same limited liability under Article L223-1 of the Commercial Code, which 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”, but its manager, the gérant, follows stricter rules on appointment, dismissal and social regime, and its shares transfer less freely. For a foreign founder who wants to keep full control from abroad, bring in investors later, and pay the director as an executive rather than as a self-employed person, the SAS with a tailored set of articles, the statuts (the company’s constitutional document filed with the registry), plus a shareholders’ agreement where needed, is almost always the better instrument. Companies whose seat is in France are then governed by French law in full, since Article L210-3 of the Commercial Code provides that “Les sociétés dont le siège social est situé en territoire français sont soumises à la loi française.”
Formation from abroad is entirely feasible without flying to Paris, provided the sequence is followed in order. First, the foreign parent resolves to create the French company, approves the draft articles, and appoints the president, the président (the legal representative of a SAS, who alone binds the company towards third parties), who may be the foreign founder herself, a trusted manager, or a professional director. Second, the share capital is deposited with a French bank or notary, which issues the funds certificate, the certificat de dépôt des fonds (the bank certificate proving the capital was paid before registration), and this is the step where foreign founders most often stall, because banks apply strict anti-money-laundering checks to non-resident shareholders and directors. Third, the company is registered through the single window with its articles, the capital certificate, the lease or domiciliation contract proving a registered office, the siège social (the legal address that determines the competent court and appears on the Kbis), and the identity and criminal-record documents of the president. Fourth, the registry issues the subsidiary’s own Kbis, the tax office assigns the SIRET number (the fourteen-digit identifier of each business premises) and the VAT number is activated, and the beneficial owners, the bénéficiaires effectifs (the individuals ultimately owning or controlling more than twenty-five percent), are declared to the register, the RBE (the registre des bénéficiaires effectifs, the confidential register of ultimate owners). Each announcement of creation appears in a legal notices bulletin, the BODACC (the bulletin officiel des annonces civiles et commerciales, the official gazette publishing company registrations and insolvency proceedings). From that point the subsidiary lives its own life: it holds its own bank account, builds its own credit history, and can later receive subsidies, hire at scale and be sold without touching the foreign parent. The parent’s exposure stays limited to its investment, except where it gives guarantees, mixes assets, or directs the subsidiary so closely that a court finds mismanagement or fraud, which is why intra-group services must be documented with written agreements and arm’s-length pricing from the start.
Tax-wise the subsidiary is a French taxpayer like any French company, which is both simpler and stricter than a branch. It pays corporate tax on its worldwide-France result under the same Articles 206 and 209, files VAT under Articles 256, 259, 283 and 287, deducts salaries and intra-group charges that are genuine and documented, and distributes dividends to the foreign parent subject to withholding tax, the retenue à la source (the levy collected at payment on dividends leaving France), reduced or removed by the applicable double-tax treaty and, inside the European Union, by the parent-subsidiary directive. The subsidiary must also track the annual legal calendar that branches partly escape: approve the accounts within six months of year-end, file them with the clerk, hold the shareholder meeting, and renew filings, failing which fines and personal exposure for the president accumulate quietly. Our annual-calendar guide details each deadline and how to meet it from abroad: Your French Company Has a Legal Calendar. The strategic trade-off is therefore clear: the branch is faster and cheaper to open but leaves the parent naked, while the subsidiary costs more to form and run but contains French risk inside a French limited-liability envelope. Groups that test the market for a few months may start with a branch and convert, but groups that hire, sign multi-year leases or handle customer funds should form the subsidiary before the exposure, not after the first dispute.
B. Paying a director who lives abroad: social security, remuneration and personal liability for tax debts
The director’s social status is where foreign founders lose the most money through misunderstanding, because the French answer depends on the exact office held, not on where the person lives. The president of a SAS who is paid for the mandate is affiliated to the general social scheme as an executive without an employment contract, the assimilé salarié (the director treated like an employee for social security, paying full contributions but without unemployment cover), which means French social contributions on the remuneration, health cover, pension points and family benefits, but no Pôle emploi unemployment insurance unless a genuine separate employment contract exists alongside the mandate. The Cour de cassation polices the boundary strictly: “Selon l’article L. 311-3, 23°, du code de la sécurité sociale, dans sa rédaction applicable au litige, sont obligatoirement affiliés aux assurances sociales du régime général les présidents et dirigeants des sociétés par actions simplifiées”, while members of a supervisory board, the conseil de surveillance (the body that oversees management without running the company), stay outside “ayant pour seule mission de contrôler les organes de direction de la société sans en assumer la gestion”, since “les membres du conseil de surveillance ne sont en principe pas affiliés aux assurances sociales du régime général, sauf à démontrer qu’ils exercent en réalité une fonction de direction”, decision of the Cour de cassation, second civil chamber, 5 June 2025, pourvoi 23-13.887, available on the official record of the Court. The full reasoning is grounded in Article L311-3 of the Social Security Code. For a founder living in London or Dubai who takes the presidency of the French SAS and draws pay, the consequence is direct: French contributions are due on that pay even without French residence, and the URSSAF can reassess years of unpaid remuneration with penalties. Conversely, a founder who takes no remuneration owes no contributions on the mandate, but also accrues no French social rights, and any money taken out must then come through dividends or a genuine service arrangement, each with its own tax treatment. The manager of a SARL, by contrast, follows the self-employed scheme, the TNS (the travailleur non salarié, the independent-worker social scheme with lower contributions and lighter cover), when holding the majority, which changes the cost comparison between SAS and SARL materially at equal drawings.
Residence adds a second layer that must be settled before the first euro is paid. A non-resident director remains taxable in France on French-source remuneration for French duties, subject to treaty allocation, and European social-security coordination or bilateral agreements decide whether contributions stay in France or move to the State of residence; an A1 posting certificate or a certificate of coverage is the document that proves it during a control. Paying the director from the foreign parent for French work without a French payroll entry is one of the most common reassessment paths: the URSSAF treats the amounts as French wages, adds employer charges and penalties, and the income-tax office follows. The clean routines are threefold: either the subsidiary pays and declares the remuneration in France through the DSN; or the director works under a documented secondment or posting with the right certificate and recharge invoices; or the director genuinely performs the duties from abroad with board minutes, travel records and time allocation proving it, accepting that the tax office will test that story against emails, calendars and decision trails. What never works is the informal mix of a French title in the Kbis, a foreign payroll, and no certificate anywhere: every register points to France while every payment points elsewhere, which is exactly the file a controller opens first.
The final warning concerns personal liability for the company’s tax debts, which follows the person who actually runs the business, including from abroad. Article L267 of the Tax Procedures Book allows the courts to declare a director jointly liable, and the Nîmes Court of Appeal recalled its terms: “lorsqu’un dirigeant d’une société est responsable des manoeuvres frauduleuses ou de l’inobservation grave et répétée des obligations fiscales qui ont rendu impossible le recouvrement des impositions et des pénalités dues celle-ci, ce dirigeant peut, s’il n’est pas déjà tenu au paiement des dettes sociales en application d’une autre disposition, être déclaré solidairement responsable du paiement de ces impositions et pénalités par le président du tribunal judiciaire”, decision of the Nîmes Court of Appeal cited above, published on the official record of the Court. In that case the manager was condemned jointly with the company for 223,204 euros of corporate tax and VAT after repeated filing failures. Emails, bank powers and management decisions prove effective direction even when the director’s chair sits in another country, so a founder who pilots the French company day to day from abroad cannot hide behind distance or behind a local nominee. Keep filings current, answer the tax office within deadlines, never let VAT and corporate-tax arrears accumulate while distributing cash, and mandate a French-based adviser with written authority to file and pay: the director who can show diligent compliance has little to fear from Article L267, while the director who discovers the arrears at the seizure stage pays twice, once as shareholder value destroyed and once from personal assets.
Conclusion
A branch puts the foreign company itself on French soil: registration is fast, the Kbis arrives quickly, and French corporate tax, VAT and payroll apply to the French activity, but every debt, every reassessment and every lawsuit reaches the parent directly, because the branch has no personality and no patrimony of its own. A subsidiary, normally a SAS, costs more to form, with capital deposit, bank checks, registered office, beneficial-owner declaration and yearly accounts, but it confines French risk inside a French limited-liability company and gives the group a sellable, financeable French asset. In both structures the director question decides the real cost: a paid SAS president joins the general scheme even from abroad, unpaid mandates accrue nothing, foreign payroll for French duties invites reassessment, and repeated tax failures can make the effective director personally liable for the company’s taxes under Article L267. Choose the branch to test, choose the subsidiary to last, register and declare from the first month, and run French payroll, VAT and accounts as if the controller were already appointed. Distance is then a management detail; neglected, it becomes the evidence.