Expanding your business to Europe can open doors to new markets, better infrastructure, and significant growth opportunities. Among European nations, France stands out as a strategic location for international businesses. If you’re considering a long-term presence in France, choosing to set up a subsidiary company in France can be a smart move.
A subsidiary provides autonomy, branding flexibility, and tax advantages while giving you access to France’s skilled workforce and vast European customer base. This guide covers everything you need to know to successfully establish a subsidiary in France.
Why Set Up a Subsidiary Company in France?
Here are a few strong reasons why companies choose France for subsidiary expansion:
- Strategic Location in Europe
France is at the crossroads of major European economies like Germany, Italy, Spain, and the UK. - Access to EU Market
Once registered in France, your subsidiary can operate throughout the EU with fewer trade barriers. - Skilled Workforce
France boasts a highly educated and skilled labor force, especially in sectors like tech, manufacturing, luxury goods, and pharmaceuticals. - Government Incentives
The French government offers incentives for foreign investors, including tax credits for R&D and job creation. - Reputation and Stability
Operating in France adds credibility to your global brand due to its business-friendly legal system and economic stability.
What is a Subsidiary Company?
A subsidiary is a legally independent entity owned fully or partially by a parent company. In France, the most common structure for a subsidiary is the SARL (Société à Responsabilité Limitée) or SAS (Société par Actions Simplifiée), both of which offer limited liability and flexibility.
A subsidiary differs from a branch:
- A branch is not legally independent and is fully tied to the parent company.
- A subsidiary is a separate legal entity with its own liabilities, rights, and obligations.
Step-by-Step Guide to Set Up a Subsidiary Company in France
1. Define the Business Structure
The two most suitable legal structures for a subsidiary in France are:
- SARL (Private Limited Company)
Ideal for small to medium-sized businesses. Requires at least one director and one shareholder. - SAS (Simplified Joint Stock Company)
Offers greater flexibility in management and shareholder structure. Preferred by larger businesses and tech firms.
Choose based on your business size, goals, and industry.
2. Appoint a Local Director (if required)
While there’s no strict requirement for directors to be French residents, appointing a local representative can ease communication, legal compliance, and banking procedures.
3. Reserve a Company Name
You must choose a unique company name and reserve it through the INPI (National Institute of Industrial Property). It should not conflict with existing trademarks or registered company names.
4. Draft the Articles of Association
This legal document defines your company’s internal rules and governance structure. It should include:
- Company name and purpose
- Share capital
- Directors and shareholder details
- Voting rights and profit-sharing
You may want legal assistance to ensure this complies with French commercial law.
5. Open a Business Bank Account
Before incorporation, you must deposit the share capital (minimum €1, though higher amounts are recommended) into a business bank account in France. The bank will issue a certificate of deposit, which is required for registration.
6. Register the Subsidiary
Once all documentation is ready:
- Submit your application to the Centre de Formalités des Entreprises (CFE) or through the online business registration portal (Guichet Unique).
- The registration must include:
- Articles of Association
- Proof of share capital deposit
- Proof of business address (lease or ownership)
- ID of directors and shareholders
Your subsidiary will be officially registered with the Registre du Commerce et des Sociétés (RCS) and receive a SIRET number (company registration number).
7. Register for Taxes and Social Contributions
After registration, your subsidiary must:
- Register for corporate tax (Impôt sur les sociétés)
- Get a VAT number (if applicable)
- Register with URSSAF for social security contributions
- Comply with payroll and employee regulations
It’s highly recommended to engage a local accountant to manage taxes, payroll, and compliance.
8. Set Up an Office or Virtual Address
You must have a registered address in France. Options include:
- Renting a commercial space
- Using a business center or virtual office
- Sharing premises with a partner or affiliate
Make sure the address is acceptable for registration purposes and listed in your incorporation documents.
Ongoing Compliance and Reporting
Once your subsidiary is operational, the following obligations apply:
- Annual Financial Statements: Must be prepared and submitted within six months of the fiscal year-end.
- Tax Filings: Quarterly or annual VAT and corporate tax returns.
- Payroll and Labor Laws: Must comply with French labor standards, minimum wage, employee benefits, and contracts.
- Commercial Insurance: Certain types of business must maintain liability or professional insurance.
Hiring a Local Partner: Why It Helps
If you’re unfamiliar with French regulations, consider working with a business consultancy or incorporation service that specializes in helping foreign companies.
They can:
- Speed up documentation and legal compliance
- Help you choose the right structure
- Assist with hiring, office setup, and tax filings
- Represent your company locally if needed
Final Thoughts
Setting up a subsidiary company in France is a strategic move for businesses aiming to scale across Europe. With a solid plan, professional guidance, and local support, the process becomes far less daunting. A subsidiary allows you to build a long-term, legally compliant presence in one of the world’s most robust economies.
Whether you’re a tech company, manufacturer, exporter, or service provider, France offers a welcoming business climate — and a well-established subsidiary is your key to unlocking its potential.
Looking to Set Up a Subsidiary in France?
Get in touch with experts who understand the French legal and business landscape. A local consulting firm can make your expansion faster, smoother, and fully compliant.
If you’d like a version tailored to a specific consultancy or your own services, let me know and I can add branding or promotional content accordingly.
Read More: Who Are the Top-Rated Pellet Stove Repair Experts in Arcadia?
