Setting up a subsidiary company in France is a strategic move for businesses seeking to expand into the European market. France, as the second-largest economy in Europe, offers numerous advantages for foreign companies, such as access to a skilled workforce, a strong legal framework, and government incentives for international investors. Below is a step-by-step guide to help you establish a subsidiary in France.

1. Understand the Structure of a Subsidiary

A subsidiary in France is typically a separate legal entity from the parent company, meaning it has its own legal identity and is governed by French law. There are two common types of subsidiaries in France:

• Société par Actions Simplifiée (SAS): This is a flexible form of business that is commonly used for subsidiaries, allowing multiple shareholders and the ability to raise capital easily.

• Société à Responsabilité Limitée (SARL): A limited liability company that is often used for smaller subsidiaries. It requires at least one shareholder and is suitable for those seeking limited liability.

2. Choose the Right Business Structure

Before you proceed with registering the subsidiary, it’s crucial to decide which type of entity you want to form. The choice depends on several factors, such as:

• SAS: Provides flexibility, particularly for managing the governance structure. It’s often preferred by larger companies or when you want the ability to issue shares.

• SARL: Preferred for smaller businesses or where a more straightforward and less flexible structure is needed.

3. Register the Subsidiary

The process of setting up a subsidiary in France includes several key steps:

1. Prepare Articles of Association (Statuts)

The first step is drafting the company’s Articles of Association (statuts), which should include:

• Company name

• Legal form (SAS or SARL)

• Business address

• Corporate purpose (objet social)

• Shareholder details and capital contributions

• Governance structure (directors, powers, etc.)

These articles must be signed by the company’s founders and must comply with French legal requirements.

2. Deposit Share Capital

For the subsidiary to be legally recognized, you will need to deposit the share capital in a French bank account. The amount of share capital depends on the chosen legal structure:

• For an SAS: The minimum capital required is €1, though a higher amount is often recommended to ensure credibility.

• For a SARL: The minimum capital requirement is also €1, but, again, higher capital is preferred to establish trust with clients and investors.

You will receive a certificate of deposit, which is necessary for the registration process.

3. Choose a Business Address in France

The subsidiary must have a physical address in France. This can be an office, a shared office space, or a co-working space. You cannot register a subsidiary without a French address.

4. Register with the Centre de Formalités des Entreprises (CFE)

You must submit the necessary documents to the Centre de Formalités des Entreprises (CFE), the official body for company registration in France. The following documents are required:

• Articles of Association

• Proof of share capital deposit

• Proof of business address

• Valid identification of the directors and shareholders

• Completed registration form (available from CFE)

• Legal notice published in a French newspaper

Once the CFE processes the registration, you will receive a Kbis extract, which is the official registration certificate for the company.

4. Tax Registration

Upon registration with the CFE, your subsidiary will be automatically registered for corporate taxes. Additionally, you will need to register for:

• VAT (TVA): If your subsidiary will be providing taxable goods or services in France, it must be registered for VAT.

• Social Security Contributions: If you will be hiring employees, you will also need to register with URSSAF for social security and payroll taxes.

• CFE Contributions: As a French business, you will also be liable for the local CFE (Cotisation Foncière des Entreprises) tax, which is a local business tax.

5. Set Up Bank Accounts

Your subsidiary will need to open a French business bank account. This is essential for conducting transactions, paying taxes, and handling day-to-day operations. Typically, you will need the following documents to open a bank account in France:

• Kbis extract (company registration)

• Proof of identity and address of the company directors

• Company’s Articles of Association

• Proof of deposit of share capital

6. Hire Employees

If you plan to hire employees for your French subsidiary, you will need to:

• Register with URSSAF for employee contributions and payroll taxes.

• Set up health insurance, retirement contributions, and other social benefits for employees in line with French labor laws.

• Comply with French labor laws regarding employment contracts, working hours, wages, and benefits.

7. Ongoing Compliance and Reporting

Once the subsidiary is established, you must adhere to French regulations and compliance requirements, which include:

• Annual Financial Reporting: The subsidiary is required to file annual financial statements with the French authorities and undergo regular audits if applicable.

• Tax Reporting: The company must file annual tax returns and pay any applicable taxes, including VAT, corporate tax, and local taxes.

• Employee Compliance: If employing staff, ensure compliance with French labor laws, including health and safety regulations, working hours, and employee rights.

8. Consider Hiring a Local Advisor

Given the complexity of the legal, tax, and regulatory environment in France, it’s advisable to work with a local legal and financial advisor. They can assist with the subsidiary’s formation, ensure compliance with local laws, and provide ongoing support with administrative processes.

Conclusion

Setting up a subsidiary company in France offers immense opportunities for expanding into the European market. With a strategic location, strong legal protections, and a supportive business ecosystem, France is an attractive destination for foreign businesses. By following the steps outlined above, you can successfully establish and operate your subsidiary in France while ensuring compliance with all local regulations.

• Meta Title: How to Set Up a Subsidiary Company in France: A Step-by-Step Guide
• Meta Description: Discover the essential steps to set up a subsidiary company in France, including choosing the right structure, registration, tax compliance, and more for successful business expansion.
• Meta Tags: start a business in France, how to start a business in France in 2025

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