How to Set Up a Subsidiary Company in France: A Comprehensive Guide

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Nov 18, 2025 - 16:47
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How to Set Up a Subsidiary Company in France: A Comprehensive Guide

Expanding into Europe? France offers a highly attractive business environment — and establishing a subsidiary company in France is often the smartest way for a foreign company to build its presence there. Unlike a branch, a subsidiary (filiale) is a fully independent legal entity under French law. This gives you limited liability, greater operational freedom, and clear separation between the parent company and the French entity. 

Below, we walk you through the key steps, obligations, and strategic considerations for setting up a subsidiary in France.

1. Choosing the Right Legal Structure

Before incorporation, you’ll need to pick the optimal legal form for your French subsidiary. Commonly used structures include:

  • SARL (Société à Responsabilité Limitée) – Similar to an LLC. Good for small to medium-sized operations. 

  • SAS / SASU (Société par Actions Simplifiée) – Offers flexibility in governance, ideal for investors. 

  • SA (Société Anonyme) – Suitable for substantial capital, large teams, or high-growth ambitions. 

The choice depends on your long-term plans, how much autonomy you want in France, and how integrated the subsidiary will be with your parent company.

2. Preparing Documents and Incorporation

Once you decide on the legal form, you need to prepare key documents:

  • Articles of Association (“statuts”) that define the subsidiary’s purpose, shareholding, and governance. 

  • Founding minutes, documenting how the subsidiary is being formed. 

  • Proof of registered office (you’ll need a French address — often using a domiciliation service at first is very common). 

  • Identity documentation for directors and shareholders. 

  • Bank deposit certificate, confirming that the share capital has been deposited in a French bank account.

As of January 2025, all company registration formalities must go through the Guichet Unique, a centralized portal that streamlines submissions to trade registers, tax offices, and social authorities.

3. Opening a Bank Account & Capitalizing the Company

To complete the incorporation process, you need to open a business bank account in France. This is where you'll deposit the initial share capital. French banks often require rigorous KYC checks, especially for non‑EU shareholders or directors. 

Once the funds are deposited, your bank will issue a capital deposit certificate — a mandatory document for the Guichet Unique filing. 

4. Registering with French Authorities

After preparing and filing all documentation via Guichet Unique, your subsidiary must be registered with the Centre de Formalités des Entreprises (CFE) or the local Chamber of Commerce. 

Upon successful registration, you will receive:

  • A SIRET number (business identification)

  • An extrait Kbis, which is a legal “birth certificate” for your company with all key details.

At this time, you’ll also need to publish a legal announcement (“annonce légale”) in a recognized publication, as required for many company types.

5. Tax, Accounting & Compliance Obligations

Once your subsidiary is operational, you’ll need to manage a range of regulatory and tax obligations in France:

  • Corporate Income Tax (Impôt sur les Sociétés IS): The standard rate is around 25%.

  • Value Added Tax (VAT): Usually 20%, with certain reduced rates for specific sectors.

  • Local business taxes:

  • CFE (Cotisation Foncière des Entreprises): based on the real estate value used. 

  • CVAE (Cotisation sur la Valeur Ajoutée des Entreprises): applies if revenue exceeds certain thresholds.  

  • Financial reporting: Prepare annual financial statements (balance sheet, profit & loss, notes) and file them with the Trade Register.

  • Audit requirements: If certain thresholds are exceeded (e.g., assets > €4M, revenue > €8M), you may need a statutory auditor (“commissaire aux comptes”). 

  • Transfer pricing: All intercompany transactions should follow “arm’s length” principles. Detailed documentation may be required during tax audits. 

6. Strategic Advantages of a French Subsidiary

Why go through all this effort to set up a subsidiary in France rather than a simpler branch or liaison office?

  • Limited liability: The parent company’s exposure is limited; debts of the subsidiary typically don’t automatically become the parent’s burden. 

  • Legal personality: A subsidiary acts in its own name (contracts, assets, liabilities), giving more flexibility and credibility.

  • Tax benefits: Under certain conditions, you may benefit from dividend participation exemptions, R&D credit, or regional tax incentives. 

  • Local presence: Building a local organization, hiring employees, and gaining client trust becomes much easier with a formal French entity.

7. Common Pitfalls & Key Considerations

While setting up a subsidiary is highly beneficial, it’s not without challenges. Here are a few strategic considerations:

  • Time & cost: Although the Guichet Unique streamlines the process, banking checks and documentation delays can slow things down.

  • Pre-incorporation agreements: If you sign contracts before the company is legally formed, you must ensure these are validly ratified after incorporation to avoid legal issues. 

  • Sector restrictions: Some sensitive sectors (e.g., defense, certain technologies) may require prior approval for foreign investment. 

  • Social compliance: Hiring staff means navigating French social security, labor law, and payroll obligations — these can be complex and rigid compared to other jurisdictions.

8. Practical Tips for Smooth Execution

To make your subsidiary setup efficient and risk‑free:

  1. Plan as a project: Treat incorporation, banking, accounting, and compliance as parallel workstreams. Assemble a cross-functional team from legal, finance, and operations.

  2. Use local experts: Work with French advisors — lawyers, notaries, accountants — familiar with foreign investments.

  3. Choose the right corporate form: SAS gives governance flexibility; SARL is simpler and familiar; SA works for capital-intensive operations.

  4. Consider a domiciliation service: To provide a registered address, especially if you don’t yet have property in France. 

  5. Prepare rigorously for documentation: Make sure shareholder and director IDs, proof of address, certificates, and contractual drafts are ready before you file.

  6. Track deadlines: Financial statements, tax returns, and statutory obligations have strict timelines.

Conclusion

If you’re serious about establishing a long-term business presence in Europe, setting up a subsidiary company in France is one of the most powerful and strategic approaches. While it requires more effort upfront than a liaison or branch office, the legal protection, autonomy, and tax structuring benefits make it highly worthwhile.

By following the steps above — from choosing the right legal form to managing compliance — and by partnering with local advisors, you can turn your French subsidiary into a strong foothold for European growth.