How to Set Up a Subsidiary Company in France: A Step-by-Step Guide for Global Businesses
Expanding your business into France is a strategic move for many international companies. With access to the European Union, a skilled workforce, and a strong legal framework, France is one of the top choices for businesses looking to grow in Europe. One of the most effective methods to establish a long-term presence in the French market is to set up a subsidiary company in France. In this article, we’ll walk you through what a subsidiary is, why you should choose France, and the complete process of setting up a subsidiary company.
What Is a Subsidiary Company?
A subsidiary is a legally independent company controlled by a parent company. Unlike a branch office, a subsidiary has its own legal identity, can enter into contracts, sue or be sued in its own name, and is taxed separately from the parent company. In France, subsidiaries are typically established as Société à Responsabilité Limitée (SARL) or Société par Actions Simplifiée (SAS) — equivalent to private limited companies.
Why Set Up a Subsidiary in France?
Here are some compelling reasons:
- Strategic Location: France serves as a gateway to the European market with access to over 500 million consumers.
- Favorable Business Environment: France offers government incentives for foreign investors, including tax credits and innovation grants.
- Skilled Talent Pool: With world-class education and training systems, you can hire highly skilled employees.
- Legal Protection: French commercial law protects both companies and investors, making it a safe environment for long-term investment.
- Corporate Independence: A subsidiary allows you to operate independently, reducing risk to the parent company.
Types of Subsidiary Structures in France
Depending on your objectives, you may choose from:
- SARL (Private Limited Company): Ideal for small to medium-sized businesses.
- SAS (Simplified Joint Stock Company): More flexible structure, suitable for larger companies or those needing investor input.
Both structures offer limited liability, but SAS is often preferred for its flexible governance and ease of adapting to international corporate frameworks.
Steps to Set Up a Subsidiary Company in France
1. Define Your Business Plan and Structure
Start by deciding:
- The subsidiary’s legal form (SARL or SAS)
- The business activities it will perform
- The initial capital
- The company address in France
- Shareholders and directors
2. Draft Articles of Association
You’ll need to prepare the Articles of Association (“Statuts”), which define how the company operates, rights and duties of shareholders, capital contributions, and profit-sharing mechanisms.
3. Open a Bank Account in France
Deposit the minimum required share capital (usually €1 for SARL and SAS, but practically around €1,000–€4,000). The bank will provide a certificate of deposit, which is needed for registration.
4. Publish a Legal Notice
You must publish a notice in an authorized local newspaper (Journal d’Annonces Légales) that announces the formation of your subsidiary.
5. Register with the French Commercial Court (Greffe)
Submit the required documents to the Centre de Formalités des Entreprises (CFE) or directly to the commercial court:
- Articles of Association
- Proof of capital deposit
- Proof of company address
- ID of directors and shareholders
- Publication certificate from the legal notice
- Declaration of non-conviction by the director(s)
After review, you’ll receive your K-bis certificate – the official company registration document.
6. Register for Tax and Social Security
Once the K-bis is issued, register the company with the local tax authorities (Service des Impôts des Entreprises) and social security bodies to handle payroll, VAT, and other compliance needs.
7. Hire Employees (Optional)
If you plan to hire staff, register with the URSSAF for social contributions and ensure compliance with French labor laws, including employment contracts, insurance, and employee benefits.
Taxation and Compliance
A subsidiary in France is subject to:
- Corporate Income Tax (CIT): 25% flat rate as of 2025
- VAT (Value Added Tax): Standard rate is 20%
- Annual Accounts: Must be filed with the commercial court
- Audit Requirements: May apply if you exceed certain size thresholds
Ensure ongoing compliance with French commercial, tax, and labor laws by working with a local accountant or legal advisor.
Challenges and Considerations
While France offers many advantages, setting up a subsidiary also comes with certain challenges:
- Language Barrier: All legal documents must be in French
- Regulatory Complexity: French bureaucracy can be slow
- Payroll Costs: Social charges are relatively high compared to other EU countries
Working with local consultants or a legal firm familiar with French corporate law can simplify the process.
Conclusion
To set up a subsidiary company in France is to unlock vast opportunities within the European market. Whether you’re aiming to serve French consumers directly, establish an R&D base, or use France as a hub for wider European operations, a French subsidiary offers credibility, operational flexibility, and legal independence.
With the right guidance and a well-prepared strategy, your business can establish a strong and lasting presence in one of Europe’s most dynamic economies.
Need Help Setting Up a Subsidiary in France?
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