{"id":2147398,"date":"2026-10-14T01:55:58","date_gmt":"2026-10-13T23:55:58","guid":{"rendered":"https:\/\/kohenavocats.fr\/2026\/10\/14\/foreign-company-france-branch-vs-subsidiary-register-liability-tax-abroad\/"},"modified":"2026-10-14T01:55:58","modified_gmt":"2026-10-13T23:55:58","slug":"foreign-company-france-branch-vs-subsidiary-register-liability-tax-abroad","status":"publish","type":"post","link":"https:\/\/kohenavocats.fr\/en\/2026\/10\/14\/foreign-company-france-branch-vs-subsidiary-register-liability-tax-abroad\/","title":{"rendered":"Branch vs Subsidiary in France: What a Foreign Parent Must Register, Risk and Pay Before Choosing"},"content":{"rendered":"

You run a company in London, New York, Dubai or Singapore, and France is next: a first French client to invoice, a salesperson to hire in Paris, or a warehouse outside Lyon. Your lawyer or accountant then asks the question that decides everything else: will you enter France with a branch or with a subsidiary? In French law the branch is called a succursale, an extension of your existing foreign company with no legal personality of its own, while the subsidiary is called a filiale, usually a SAS (soci\u00e9t\u00e9 par actions simplifi\u00e9e, a flexible joint-stock company) or a SARL (soci\u00e9t\u00e9 \u00e0 responsabilit\u00e9 limit\u00e9e, a private limited-liability company), which becomes a brand-new French legal person. The two vehicles look similar on a business card, and both can hire, invoice with French VAT (TVA, taxe sur la valeur ajout\u00e9e) and appear on the trade register, yet they differ on the three points that matter to a foreign founder: who pays when something goes wrong, what the French tax administration expects, and how heavy the registration file is. This article explains both routes step by step, with the exact statutes and court decisions behind each statement, so you can choose from abroad with full knowledge of the consequences. It assumes you have already read the general road map for foreign founders, Setting Up a Company in France as a Foreign Founder: Bank Account, Kbis, VAT and Your First Hire<\/a>, which covers the bank account, the Kbis extract (the official identity card of a French business, issued by the greffe, the registry office of the commercial court) and the first hire; here we go one level deeper into the vehicle choice itself.<\/p>\n

I. Branch or Subsidiary in France: What Changes for a Foreign Company<\/h2>\n

Before comparing costs and risks, you need a clear picture of what each vehicle is in French law and what you must file to create it without travelling to France. Both filings now go through the same electronic one-stop portal, but the documents inside the envelope are very different.<\/p>\n

A. How to Open a Branch (Succursale) in France From Abroad<\/h3>\n

A branch is not a new company. It is your existing foreign company acting in France under its own name, through premises and a representative established on French soil. Because no new legal person is created, there are no articles of association (statuts) to draft and no share capital to deposit: the branch lives entirely on the legal existence of its parent. The practical consequence is immediate for contracts, invoices and court papers: everything is signed in the name of the foreign parent, and the branch address in France is simply where that parent operates locally.<\/p>\n

That simplicity at birth has a procedural price. Since 1 January 2023, every business filing in France passes through a single electronic portal, the guichet unique (one-stop shop) operated for the INPI (Institut national de la propri\u00e9t\u00e9 industrielle, the French intellectual-property and business-formalities office). The statute provides that “Ce dossier est d\u00e9pos\u00e9 par voie \u00e9lectronique aupr\u00e8s d’un organisme unique d\u00e9sign\u00e9 \u00e0 cet effet. Ce d\u00e9p\u00f4t vaut d\u00e9claration aupr\u00e8s du destinataire d\u00e8s lors que le dossier est r\u00e9gulier et complet \u00e0 l’\u00e9gard de celui-ci.” (article L123-33 of the Commercial Code<\/a>). In plain English: one electronic file, filed once, counts as the declaration to every administration concerned, provided the file is complete. For a branch, completeness means proving that the parent company genuinely exists abroad. In practice the registry (the greffe of the competent commercial court, or the Paris Commercial Court registry for a Paris address) asks for an up-to-date certificate of existence of the parent issued by its home register, the parent’s constitutional documents with a certified French translation by a sworn translator (traducteur asserment\u00e9), the resolution of the competent parent body deciding to open a French branch, the French business address with a title of occupation (lease, sublease or domiciliation contract), and the identity and powers of the person who will permanently represent the parent in France (repr\u00e9sentant en France, sometimes called fond\u00e9 de pouvoir). That representative is the face of the branch toward banks, suppliers and the URSSAF (Unions de recouvrement des cotisations de s\u00e9curit\u00e9 sociale et d’allocations familiales, the agency that collects French social-security contributions): choose someone who can actually sign, because their signature binds the foreign parent directly.<\/p>\n

Once the file is accepted, the branch receives its own SIREN number (Syst\u00e8me d’identification du r\u00e9pertoire des entreprises, the nine-digit business identifier) and SIRET number (SIREN plus five digits identifying the premises), and it appears on the trade and companies register, the RCS (registre du commerce et des soci\u00e9t\u00e9s), as a French establishment of a foreign company. A Kbis extract is issued for the branch, which satisfies banks and landlords, and the registration is advertised so third parties can check it. The Paris route deserves a practical note for foreign founders: a branch address in Paris or anywhere in \u00cele-de-France (the Paris region) is registered with the Paris Commercial Court greffe, one of the busiest registries in France, where incomplete translations are the most common cause of rejection. File the sworn translations, the parent certificate dated less than three months earlier, and a clean proof of address from the start, and answer any registry query within days, because the file can be closed if you let it sleep. Opening a branch is therefore fast when the parent’s paperwork is in order, and slow only when the foreign documents arrive piecemeal.<\/p>\n

Two warnings complete the picture. First, the branch must keep French business records capable of justifying its taxable operations in France, a point the tax section below develops with a 2023 Court of Cassation decision. Second, the branch does not shield the parent: every French debt of the branch is a debt of the foreign company, enforceable against the parent’s assets, as Part II explains. Founders who open a branch to test the French market for six to twelve months, invoice a first client and hire one salesperson should do so knowing that the branch is a shop window with the parent’s balance sheet behind the glass.<\/p>\n

B. How to Incorporate a French Subsidiary (SAS or SARL) From Abroad<\/h3>\n

A subsidiary is the opposite construction: instead of stretching your foreign company into France, you create a new French company that your foreign company owns, alone or with partners. The standard vehicles are the SAS and the SARL, and the foreign parent is simply the shareholder (associ\u00e9 or actionnaire). The decisive legal event is registration: “Les soci\u00e9t\u00e9s commerciales jouissent de la personnalit\u00e9 morale \u00e0 dater de leur immatriculation au registre du commerce et des soci\u00e9t\u00e9s.” (article L210-6 of the Commercial Code<\/a>). In plain English, the French company becomes a legal person only when the RCS registration is granted, and acts signed beforehand remain the personal responsibility of those who signed them unless the new company formally takes them over after registration. Never sign a French commercial lease or an employment contract “for the future SAS” without a written takeover clause (reprise des engagements) in the articles: the same article warns that persons who acted for a company in formation are jointly and indefinitely liable until the company adopts their commitments.<\/p>\n

The choice between SAS and SARL matters more to foreign shareholders than most formation agents admit. The SAS is built by its articles: “Une soci\u00e9t\u00e9 par actions simplifi\u00e9e peut \u00eatre institu\u00e9e par une ou plusieurs personnes qui ne supportent les pertes qu’\u00e0 concurrence de leur apport.” (article L227-1 of the Commercial Code<\/a>). One or more persons, losses limited to contributions, and almost total freedom to organise management, share transfers and investor rights. The SARL follows the same limited-liability principle, “La soci\u00e9t\u00e9 \u00e0 responsabilit\u00e9 limit\u00e9e est institu\u00e9e par une ou plusieurs personnes qui ne supportent les pertes qu’\u00e0 concurrence de leurs apports.” (article L223-1 of the Commercial Code<\/a>), but inside a stricter statutory frame: regulated approval clauses for share transfers (agr\u00e9ment), tighter rules on managers (g\u00e9rants), and less room for tailor-made investor preferences. A foreign parent that plans to raise funds, grant different share classes or bring in managers with bespoke powers almost always prefers the SAS; a small family-owned operating company with two identified partners can live very well as a SARL. Either way, the shareholder’s losses stop at its contributions, which is the whole point of the subsidiary when compared with the branch.<\/p>\n

The incorporation file, filed from abroad through the same one-stop portal, contains what the branch file does not: draft articles of association in French, the list of subscribers with the amounts subscribed, the bank certificate proving that the cash contributions are frozen on a blocked capital account (certificat de d\u00e9p\u00f4t des fonds), the appointment of the first president (for a SAS) or manager (for a SARL), the legal announcement of formation published in an authorised gazette (annonce l\u00e9gale, whose reference number the portal requires), the proof of the registered office (si\u00e8ge social), and the declaration of the beneficial owners for the RBE (registre des b\u00e9n\u00e9ficiaires effectifs, the register of natural persons who ultimately own or control the company). On that last point the statute is direct: covered companies must declare “au registre du commerce et des soci\u00e9t\u00e9s, par l’interm\u00e9diaire de l’organisme mentionn\u00e9 au deuxi\u00e8me alin\u00e9a de l’article L. 123-33 du code de commerce, les informations relatives aux b\u00e9n\u00e9ficiaires effectifs” (article L561-46 of the Monetary and Financial Code<\/a>). A foreign parent that ultimately sits above the French subsidiary must therefore trace the chain up to the real human beings who hold, directly or indirectly, more than 25 percent or exercise control by other means, and keep that declaration updated whenever the chain moves. Founders sometimes discover at this stage that their offshore holding structure, designed for other purposes, becomes transparent in France: budget for that disclosure before choosing the subsidiary, because the registry blocks the file while the RBE declaration is missing or inconsistent.<\/p>\n

Once registered, the subsidiary receives its own SIREN, its own Kbis in its own French name, and its own BODACC record (Bulletin officiel des annonces civiles et commerciales, the official gazette where company registrations and insolvency openings are published for all to see). It opens its own bank account, signs its own contracts and hires in its own name. The Paris practical note applies here as well: a si\u00e8ge social in Paris or the inner suburbs means registration with the Paris greffe, publication costs for the annonce l\u00e9gale at Paris rates, and, very often, a domiciliation company as the first address while the founders look for real offices. None of this requires the foreign shareholder to be resident in France or to hold a French visa for the company itself, but the appointed president or manager must be reachable, identified and able to produce a criminal-record or sworn-declaration document according to their nationality and residence. Incorporation from abroad is therefore entirely possible by power of attorney and electronic signature; it is simply a heavier file than a branch, typically counted in weeks rather than days, in exchange for a legal person that stands on its own feet.<\/p>\n

II. Branch vs Subsidiary in France: Liability, Tax and Daily Compliance<\/h2>\n

Registration is only the entrance ticket. The choice pays off, or hurts, when a creditor knocks, when the tax office writes, and when payroll runs every month. This is where the branch and the subsidiary truly diverge.<\/p>\n

A. Who Pays the Debts: Parent Liability, Creditors and French Courts<\/h3>\n

With a branch, the answer is short: the foreign parent pays everything. A Paris Court of Appeal decision of 27 May 2026 concerning the French branch of an Irish company applies the premise that every practitioner works with daily: in its decision of 27 May 2026 (Paris Court of Appeal, Pole 6, Chamber 4, RG 17\/13039, on the French branch of an Irish company placed under secondary liquidation), the Court treats as undisputed that a French branch has neither legal personality nor legal capacity of its own, so claims must be directed against the foreign company, which can be sued in France through its branch where the branch is the local establishment of the employer or contracting party. The same case shows the insolvency side of that unity: the Bobigny Commercial Court opened secondary liquidation proceedings against the French branch while the main proceedings ran in Ireland, and the effects of those French proceedings were limited to the debtor’s assets located on French territory. For a foreign founder, the lesson is concrete. A branch keeps you within one single estate: French creditors can reach the parent abroad, and a French insolvency judge can freeze what the branch holds in France, while the parent’s foreign insolvency follows the parent everywhere else. Do not open a branch with the idea that French losses will stay in France; they will not, because there is no separate person to contain them.<\/p>\n

With a subsidiary, the starting point is the reverse: the French company pays its own debts, and the foreign shareholder loses at most its investment. Suppliers, landlords and employees of a French SAS sue the SAS, seize the SAS’s accounts, and stop there. French courts pierce that screen only in narrow, fact-heavy situations that a careful group never approaches: personal fault of the parent committed in France, a parent that signed as guarantor (caution) or comforted the debt in writing, or a confusion of estates where the subsidiary had no autonomous management, no separate accounts and no will of its own. Routine group management, shared branding, cash-pooling agreements documented at arm’s length, and a parent that appoints the subsidiary’s president do not, by themselves, make the parent liable for the subsidiary’s debts. That separation is why banks lending to a young French subsidiary routinely ask the foreign parent for an explicit guarantee: the bank knows the screen holds, so it prices the loan accordingly.<\/p>\n

One famous exception must be read exactly for what it is, because founders often over-read it. In competition law, the Court of Cassation recalls that “le comportement d’une filiale peut \u00eatre imput\u00e9 \u00e0 la soci\u00e9t\u00e9 m\u00e8re notamment lorsque, bien qu’ayant une personnalit\u00e9 juridique distincte, cette filiale ne d\u00e9termine pas de fa\u00e7on autonome son comportement sur le march\u00e9, mais applique pour l’essentiel les instructions qui lui sont donn\u00e9es par la soci\u00e9t\u00e9 m\u00e8re” (Court of Cassation, Commercial Chamber, 7 June 2023, decision No. 412 FS-B, appeals S 22-10.545 and others, Lactalis<\/a>). In plain English, a subsidiary’s anti-competitive conduct can be attributed to a parent that decisively influenced it, even though the subsidiary is a distinct legal person. This is a competition-fines mechanism, built on European case law, not a general rule that French creditors can invoke to collect an unpaid invoice from the foreign shareholder. Keep the two registers apart: separate personality protects the parent against ordinary business creditors, while regulatory liability follows economic control in the specific fields, such as antitrust, where the statute or the case law says so. A group that gives its French subsidiary real autonomy, documented board decisions and market-rate intra-group contracts is protected on the first register and has nothing to fear on the second.<\/p>\n

The litigation geography also differs in ways that matter from abroad. A branch is sued where it operates, in the name of the parent, with service possible at the French premises; judgments then travel against the parent’s assets under European or treaty enforcement rules. A subsidiary is sued in its own name before the court of its registered office, for Paris companies the Paris Commercial Court (Tribunal de commerce de Paris) in business matters or the Paris judicial court in civil ones, and enforcement stays inside the subsidiary’s estate unless a guarantee says otherwise. Founders who expect disputes with a French distributor or a departing executive should weigh this early: the branch exposes the group balance sheet to a French judgment, while the subsidiary ring-fences it, at the cost of capitalising the subsidiary seriously enough that it can actually face its own litigation.<\/p>\n

B. Corporate Tax, VAT, Accounts and Staff: What Each Vehicle Must File and Pay<\/h3>\n

French corporate income tax (IS, imp\u00f4t sur les soci\u00e9t\u00e9s) follows territory, not legal form. The rule is that taxable profits are computed “en tenant compte uniquement des b\u00e9n\u00e9fices r\u00e9alis\u00e9s dans les entreprises exploit\u00e9es en France” (article 209, I of the General Tax Code<\/a>): only profits earned through an enterprise operated in France are taken into account. A French subsidiary is fully inside that net on all its French profits, at the standard rate the statute fixes plainly: “Le taux normal de l’imp\u00f4t est fix\u00e9 \u00e0 25 %.” (article 219, I of the General Tax Code<\/a>). A branch is inside the same net whenever its French activity amounts to an enterprise operated in France, and founders consistently underestimate how quickly that line is crossed: a Paris salesperson who negotiates and concludes contracts, a technician who installs and maintains equipment, or a warehouse that delivers to French customers can each anchor French taxation of the corresponding profits, with or without a formal branch on the register. Registration does not create the tax; the activity does.<\/p>\n

The Court of Cassation drew the practical consequence in a 2023 decision that every foreign group with French operations should read. It holds that “Une soci\u00e9t\u00e9 de droit \u00e9tranger est tenue, lorsqu’elle exerce une activit\u00e9 en France par l’interm\u00e9diaire d’un \u00e9tablissement stable, aux obligations r\u00e9sultant des articles 54, 209 et 286, I, 3\u00b0, du code g\u00e9n\u00e9ral des imp\u00f4ts, qui exigent la passation d’\u00e9critures comptables permettant de justifier des op\u00e9rations imposables en France” (Court of Cassation, Commercial Chamber, 15 February 2023, decision No. 134 FS-B, appeal C 21-13.288, Orefa<\/a>). A foreign company operating in France through a stable establishment must keep accounting records capable of justifying its taxable French operations, and a company that ignored its French filing duties could be presumed to have knowingly omitted entries. The case concerned a Luxembourg company accused of running its effective management and professional activity from France, and the lesson travels far beyond luxury assets: keep French books for the French activity from day one, file the corresponding returns with the DGFIP (Direction g\u00e9n\u00e9rale des finances publiques, the French tax administration), and never assume that a clean set of accounts in the home country exempts the French operation. For a branch, this means stand-alone French accounting even though the branch is not a separate company; for a subsidiary, it means the ordinary French package of annual accounts, tax return and, above the thresholds, audit. Tax treaties then decide which country ultimately taxes what and how double taxation is relieved, but no treaty relieves you from documenting the French side in France.<\/p>\n

Value-added tax follows the same activity-first logic. A branch that sells goods or services in France charges French VAT, files French VAT returns and can recover input VAT under the same rules as any French business; a subsidiary does exactly the same in its own name. The practical trap for foreign founders is the period before registration, when the parent incurs French expenses, such as a Paris office deposit, a French lawyer’s fees or exhibition costs, without a French VAT number to recover the tax: keep every invoice and discuss the recovery route with the tax office early, because late claims face strict time limits. E-invoicing adds a second trap on the horizon, with France phasing in mandatory electronic invoicing between taxable businesses, so whichever vehicle you choose should be set up from the start with invoicing software that handles French structured formats rather than simple PDFs.<\/p>\n

Staff is where the two vehicles converge most. Whether you hire through a branch or a subsidiary, the French employee gets a French employment contract, French social-security registration and French payroll: the prior declaration of hiring (DPAE, d\u00e9claration pr\u00e9alable \u00e0 l’embauche) goes to the URSSAF before the first day of work, monthly payroll slips follow French mandatory items, and social charges are withheld and paid in France. The branch registers itself as an employer in France and hires in the parent’s name; the subsidiary hires in its own name. Either way, the 35-hour week, overtime premiums, payslip rules and termination procedures apply identically, and the foreign manager who supervises from abroad discovers that French labour courts judge the French paperwork, not the home-country habits. Budget realistically: employer social charges typically add roughly forty to fifty percent on top of gross salary depending on the level and the schemes, and the first payroll should be run by a French payroll provider before you improvise.<\/p>\n

Accounts, finally, close the yearly loop. A French subsidiary approves its annual accounts in a shareholders’ meeting, files them with the greffe and faces late-filing fines that accumulate quietly. A branch has lighter formalities but must still produce French accounts for its activity and keep the parent’s information current on the register, including any change of representative or address. Both vehicles receive the local business tax bill (CFE, cotisation fonci\u00e8re des entreprises) in their first full year at the French address, Paris rates included, and both must keep the RBE declaration accurate as ownership moves. The compliance calendar is therefore not meaningfully lighter with a branch; it is only organised differently, around one foreign person present in France rather than one French person owned from abroad.<\/p>\n

Conclusion<\/h2>\n

Choose the branch when you want speed and reversibility: a tested parent, a first French client or two, one hire, and an activity you can describe, tax and insure as an extension of home. Choose the subsidiary, almost always a SAS for a foreign investor, when you want a French legal person that borrows, leases, hires and litigates in its own name while your exposure stops at your investment. The branch files lighter and binds the parent totally; the subsidiary files heavier and shields the shareholder, provided you capitalise it, document its autonomy and keep its books, tax returns, VAT filings and payroll genuinely French. Either vehicle needs French accounting from the first euro earned in France, a representative or officer who can actually sign, and a Paris-region address strategy that survives the registry’s checks. Get those three right, and the branch-versus-subsidiary choice becomes what it should be: a business decision about risk and growth, not a surprise discovered in a tax audit or a court summons.<\/p>\n","protected":false},"excerpt":{"rendered":"

Succursale or filiale? 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