You run a company in London, New York, Dubai or Singapore, and somewhere in the story of your expansion into France there is a branch, a succursale, registered with the French company register, holding a French Kbis, the official registration certificate issued by the greffe, the registry office of the commercial court, possibly employing staff and invoicing French clients. Many foreign owners set one up years ago because it looked simpler than creating a French company, then left it ticking over while they lived abroad. That quiet branch is not a dormant letterbox. Under French law it has no legal personality of its own, which means your foreign parent company answers directly for everything the branch signs, owes and forgets to file. It pays French corporate tax on its French profits, it must declare and pay French VAT, its employees are fully French employees, and every year paperwork must be filed with the registry. This guide explains, for a foreign owner managing from abroad, what your branch really is next to the two alternatives, the liaison office and the subsidiary, what it costs you in filings and tax while it trades, and how to close it cleanly or convert it into an SAS, the société par actions simplifiée, the flexible French company form most foreign founders end up choosing, without leaving liabilities behind in Paris or anywhere else in the Île-de-France.
I. What is your French branch really: no company of its own, but full French obligations?
A. Branch, subsidiary or liaison office: which structure do you actually hold?
France offers a foreign business three doors, and the official guide of the Ministry of the Economy describes all three in one place. At the lightest end sits the bureau de liaison, the liaison or representative office, used to explore the French market. It has no legal or tax personality of its own and it may only carry on strictly non-commercial work such as prospecting, advertising, information gathering or storage, or any other activity of a preparatory or auxiliary nature. The guide states that this structure is subject neither to the foreign-investment authorisation procedure, nor to registration with the Registre du commerce et des sociétés, the RCS, nor to French taxation. The moment your Paris presence starts negotiating and signing contracts, delivering goods or billing services, you have walked out of that door, and the tax administration may treat the office as something heavier, as the case law below shows.
The middle door is your succursale, the branch. The ministerial guide defines it as one step further into the French market: it runs a business, a fonds de commerce, distinct from the head office by its own premises and material organisation, yet it has no legal autonomy, no personality of its own, and no patrimony, no assets or capital, separate from the parent company. It is managed by a legal representative, most often an employee, and works like an agency attached to the head office without particular formalities for decision-making. The passage that matters most for you reads as a warning disguised as a definition: as a permanent structure of the foreign company, the branch is subject to the French tax regime, while its profits escape double taxation in the home country only if that country has signed a double-tax treaty with France. In plain terms, the branch gives you speed and simplicity at the price of exposure: every contract it signs and every debt it runs up is a contract and a debt of the parent company, enforceable against the parent’s assets, because there is no corporate veil between them.
The third door is the filiale, the subsidiary, described by the same guide as the most complete way to enter the French market. Unlike the branch, the subsidiary is a company in its own right: although majority-controlled by the parent, it owns its assets and acts in its own name. If you want limited liability, a French balance sheet your banks and partners understand, and a vehicle you can one day sell, that is the subsidiary, most often an SAS. Readers who have not yet chosen can start from our complete guide to setting up a company in France as a foreign founder, from bank account to Kbis, VAT and first hire, which walks through the subsidiary route step by step. But if the branch is what you already have, the question is no longer which door to open. It is what the door you opened obliges you to do every year, and how to walk back through it cleanly.
One practical consequence follows immediately from the absence of personality. The branch acts through its responsable en France, its representative in France, whose identity is registered. Counterparties, employees, landlords and the tax office all deal with that person, yet legally they deal with your foreign company. Powers of attorney, employment contracts, leases and tax filings signed at the branch bind the parent. If the representative leaves, is dismissed or loses capacity, you must update the registration from abroad without delay, because a branch whose registered representative no longer matches reality accumulates unenforceable filings and disputed signatures. Keep the registered details exact at all times; the registry punishes inaccuracy, as shown below.
B. Registration, Kbis extract and the yearly filings a branch owes the registry
Every branch of a foreign company trading in France must be registered. Article L. 123-36 of the Commercial Code provides that the Registre national des entreprises, the RNE, the single national business register, records on declaration all businesses operating on French territory, and it expressly covers foreign businesses. Since the reform of the formalities, there is only one door for the paperwork: Article L. 123-33 of the Commercial Code requires every business to declare its creation, any change in its situation or the cessation of its activity through a single file lodged electronically with the single body designated for that purpose, the Guichet unique operated by the INPI, the French intellectual-property and business-formalities institute, which then forwards the file to the registries, tax and social bodies. From abroad you complete the whole registration, and later every modification and the radiation, the removal from the register, through that portal; the clerks of the commercial courts no longer accept paper files for these steps.
The greffes, the court registries, publish exactly which supporting documents a branch file must contain, and the list is worth reading before you start, because most rejections of foreign files come from missing or untranslated papers. According to the Infogreffe guide for registering a branch of a foreign company, you must attach a copy of the parent company’s articles, current on the day of filing and translated into French where needed, certified as true by the head of the branch; an original extract of the parent’s registration in a foreign public register, less than three months old, translated where needed; proof of lawful occupation of the branch premises such as a lease, a domiciliation contract or a utility bill; and for the representative in France a valid passport, identity card or residence permit whose status allows RCS registration, plus a signed original declaration of non-conviction showing parentage, which the supervising judge verifies with the criminal-records office. Domiciliation, the registered address, follows the general rule of Article L. 123-11-1 of the Commercial Code, which authorises a legal person to set its seat at its legal representative’s home, with a five-year limit where legislation or a contract clause forbids it. Take this paperwork seriously: Article L. 123-38 of the Commercial Code punishes knowingly giving inaccurate or incomplete information for registration, modification or radiation with a fine of 4,500 euros and six months’ imprisonment.
Registration produces the branch’s Kbis extract, the same evidentiary certificate French counterparties demand before signing, opening a bank account or hiring. Founders who struggled to open or keep a French corporate account from abroad will recognise the pattern described in our guide to a French bank refusing your corporate account, capital deposit and the right to an account: banks check the Kbis, the representative’s identity and the parent’s documents before moving. But the Kbis is only the beginning of the registry relationship. Like any company, the branch must keep its registration current and file accounts. Article L. 232-23 of the Commercial Code requires companies to file their annual accounts, management report and auditors’ report with the clerk within one month of approval by the shareholders, or within two months where filing is electronic, and Article R. 123-111 of the Commercial Code confirms that one-month deadline, extended to two months for electronic filing. For a branch of a foreign company, the documents filed are those of the foreign parent, translated where required, so the Paris registry effectively monitors the parent’s yearly accounts through the branch. Miss these filings year after year and the branch drifts into non-compliance visible to every partner who orders a company search, while fines and court injunctions to file accumulate.
II. How do you run, close or convert your French branch from abroad?
A. Corporate tax, VAT and staff: what the branch owes France while it trades
The most expensive misunderstanding about branches concerns tax. Because the branch has no personality, some foreign owners assume profits belong to the parent and are taxed only at home. French law says the opposite. Article 209, I of the General Tax Code provides that corporate-tax profits are determined taking into account only profits made in businesses operated in France, as well as profits whose taxation is attributed to France by a double-tax treaty. A branch trading in Paris or anywhere in the Île-de-France is a business operated in France, so its French profits bear French impôt sur les sociétés, the corporate tax, currently at the standard rate with instalments and a balance, under the same calendar as French companies. Our guide to French corporate-tax instalments, balance and deficits for owners living abroad details that calendar, and everything it says applies to your branch.
The leading court decision on foreign structures in France makes the accounting duty explicit, and its wording deserves quotation because tax inspectors rely on it. In a ruling concerning a Luxembourg company suspected of operating in France without declaring anything, the Commercial Chamber of the Court of Cassation held: « Une société de droit étranger est tenue, lorsqu’elle exerce une activité en France par l’intermédiaire d’un établissement stable, aux obligations résultant des articles 54, 209 et 286, I, 3°, du code général des impôts, qui exigent la passation d’écritures comptables permettant de justifier des opérations imposables en France » (Cass. com., 15 February 2023, No. 21-13.288). In English: a company governed by foreign law, where it carries on an activity in France through a stable establishment, is bound by the obligations under those tax articles, which require accounting entries that evidence the transactions taxable in France. The Court added that where such a company has breached its filing duties, it may be presumed to have knowingly omitted to record entries, or to have knowingly recorded inaccurate or fictitious entries, in accounts whose keeping is required by the tax code. For your branch, the message is direct: keep French books that stand alone, record every French transaction, and file the corresponding returns, because the absence of books is itself treated as evidence of concealment and opens the door to tax searches and assessments.
VAT follows the same logic of territorial presence. Article 286 of the General Tax Code, in force at the date of writing, requires every person liable to VAT to declare the start of operations within fifteen days to the designated office, to supply all information about the professional activity, and to keep books or records that determine turnover as defined by the VAT chapter, adding that a declaration is equally required when the business ceases. Your branch therefore needs its French VAT number, files French VAT returns, the CA3 monthly or quarterly returns or the annual CA12 under the simplified scheme depending on turnover, charges French VAT on its domestic supplies, and declares intra-Community movements where relevant. Since the rollout of electronic invoicing, the branch must also fit into the e-invoicing and e-reporting circuit according to the phased timetable, a subject covered in our guide to French electronic invoicing, platforms, deadlines and fines for companies run from abroad. Closing the branch without filing the cessation declaration keeps VAT returns due and penalties running, which is why the closure checklist below starts with tax.
Staff complete the picture. A branch that hires in France becomes a French employer with no adjustment period and no expatriate privilege. 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 », meaning no hiring before the nominative declaration to the social-protection bodies, the déclaration préalable à l’embauche, the DPAE filed with URSSAF, the social-security collection agency. French employment contracts, the 35-hour working week and overtime rules, payslips, monthly DSN social declarations, occupational health, and the full dismissal procedure all apply to branch employees exactly as to subsidiary employees. Foreign owners who hired quickly and dismissed hastily will find the detailed procedures and costs in our guides to dismissing your first French employee from abroad and to contractors reclassified as employees. Budget accordingly: a branch with three Paris employees carries the same payroll cost and the same labour-court risk as an SAS with three employees, with the added feature that the parent answers for awards without limit.
B. Closing the branch or converting it into an SAS subsidiary from abroad
There are two clean exits, and one false exit to avoid. The false exit is abandonment: stop trading, stop filing, keep the Kbis alive and hope the registry forgets you. The registry does not forget, it strikes off automatically, and automatic striking-off settles nothing. Article R. 123-131 of the Commercial Code provides for automatic radiation of a legal person after mention of its dissolution at the end of the period set by the articles for the liquidation, or failing that after three years, with possible extensions at the liquidator’s request. That mechanism winds up dissolved companies; it does not pay your tax arrears, social debts, supplier balances or employee claims, all of which remain enforceable against the foreign parent, and it leaves the directors exposed to the same liability actions as after any messy closure. A branch that simply rots on the register also keeps generating filing defaults, late penalties and an unreliable record that poisons your next French project, because every future bank, partner and registry check starts with your history.
A clean closure follows the reverse of creation, and each step can be instructed from abroad through a representative or counsel with powers of attorney, translations and apostilles where required. First, decide and document the cessation at parent level, set the effective date, and revoke or redefine the French representative’s powers so nobody can still bind the company. Second, file the cessation with the Guichet unique for radiation of the branch, and mirror it with the VAT cessation declaration required by Article 286, the final corporate-tax return covering the branch’s last period, settlement of outstanding VAT, corporate-tax balances and the cotisation foncière des entreprises, the CFE local business tax, plus the employer’s social account closures: final DSN returns, certificates and balances for each employee, and termination or transfer paperwork. Third, terminate or assign the premises lease or domiciliation contract, close or repurpose the branch bank account once direct debits for tax and social bodies have cleared, collect the final Kbis showing radiation, and keep the full file, because French limitation periods for tax reassessment and employee claims run for years after the branch disappears. Where the branch employed staff, dismissals, settlement agreements or transfers must be completed before radiation, not after, since a struck-off employer that still owes wages or severance invites litigation against the parent in the Paris labour courts.
Conversion into a subsidiary is usually the better exit where the French business has a future but the structure is wrong. The standard path runs in three stages. Stage one, create the SAS alongside the branch: Article L. 227-1 of the Commercial Code allows an SAS to be formed by one or more persons whose liability is limited to their contributions, and a single-member SAS, the SASU, lets your foreign company hold one hundred percent. The new company, whose registered office in France submits it to French law under Article L. 210-3 of the Commercial Code, gets its own Kbis, bank account, VAT number and employer accounts. Stage two, transfer the business: sell or contribute the branch’s fonds de commerce, stock, contracts and equipment to the SAS with proper valuation, assign or sublet the premises, and move the employees, whose contracts transfer automatically by law where an autonomous economic entity is transferred, since Article L. 1224-1 of the Labour Code provides: « Lorsque survient une modification dans la situation juridique de l’employeur, notamment par succession, vente, fusion, transformation du fonds, mise en société de l’entreprise, tous les contrats de travail en cours au jour de la modification subsistent entre le nouvel employeur et le personnel de l’entreprise ». Notify clients, suppliers and the tax office of the change of operator so invoices, VAT and payments switch cleanly from branch to SAS on an agreed date. Stage three, radiate the empty branch as above, leaving a French subsidiary with limited liability, saleable shares and a clean register. Run the two structures side by side only for the short overlap the transfer needs; running both permanently doubles filings, fees and confusion for no benefit.
Owners based in Paris part of the year, or anywhere in the Île-de-France, gain nothing by travelling for these steps, but gain a lot from sequencing them correctly. The Paris commercial-court registry handles high volumes and rejects incomplete foreign files without discussion, so lodge one complete Guichet unique file rather than three corrected ones. Time the VAT and corporate-tax final returns to the actual end of trading, not to the radiation date months later, to avoid a dead period that still produces taxable events such as a lease indemnity or a stock sale. And before choosing between closure and conversion, quantify: the branch’s accumulated losses, if any, belong to the parent’s French taxable result and generally cannot be sold with the business the way a subsidiary’s carried-forward deficits sometimes can, while the subsidiary offers the limited-liability shield and the cleaner exit, a share sale, that the branch structurally cannot provide. Put those numbers next to the cost of one more year of branch filings, and the decision usually makes itself.
Conclusion
A French branch is a paradox that punishes inattention: it is nothing in law, a mere extension of your foreign company without personality or patrimony, yet it owes France almost everything a French company owes, registration and yearly filings at the registry, corporate tax on its French profits with standalone French accounts, VAT declarations from the fifteenth day, and full employer duties from the first hire. The Court of Cassation says expressly that a foreign company operating through a stable establishment must keep the French accounting records that evidence its taxable transactions, and the absence of those records counts against it. From that core, your duties as an owner living abroad are straightforward. If the branch trades, file every year, declare and pay every tax, and keep the registered representative and address exact. If it no longer has a purpose, close it through the formal cessation circuit, tax, social and registry together, rather than letting it rot into automatic striking-off that settles no debt. And if the French business deserves a future, convert the branch into an SAS subsidiary, transfer the business and the employees in good order, then radiate the branch, so tomorrow’s growth, financing or sale happens inside a French company with limited liability instead of on the bare balance sheet of the parent. Handled in that order, the branch becomes what it was meant to be: a stepping stone into France, not a liability left behind.