Do you want to set up a company in France, but need some help getting to know the different legal structures? The following article will make it clear for you. We will review each and every existing structure so you can identify which type of company you should create depending on your expansion project for France.
Remember that it is important to follow two steps. The first one is to decide whether to set up a liaison office, a branch office or a subsidiary office. And then, you need to focus on choosing one of five specific legal forms.
Setting up a Liaison office / Branch office / Subsidiary Office in France
Option 1: a liaison office
Setting up a liaison or representative office in France is a good option for companies that are looking to test the French market or verify if it is a good fit for their business.
A French liaison office is a simple structure without autonomy, and considered to be an extension of the foreign company in France. Liaison offices cannot for example sign contracts independently of their international parent company.
It is not necessary to register a representative or liaison office with the trade register in France, although you will need to register it with URSSAF (social security) if you have employees. Liaison or representative offices do not need to pay taxes in France.
Option 2: a branch office
Setting up a branch office in France is relevant if you are looking for an uncomplicated long-term solution.
A French branch office is an entity of the foreign company with autonomy, so it can sign sales contracts and make decisions independently as the company’s official representative in France. Transactions are therefore legally binding for the foreign company.
French branch offices are not separate legal entities but they are required to pay taxes in France.
Option 3: a subsidiary
You may consider establishing a subsidiary in France if you want to set up a long-term, more independent French operation.
A French subsidiary is a company subject to French law which can conduct all types of business. It Is a fully autonomous legal entity, even if wholly owned by a foreign shareholder.
French subsidiaries have their own asset bases which are independent from that of their associates.
Establishing a company in France: the different legal forms
SAS / SASU / SARL / EURL / SA
What is the difference between these types of French company?
Option 1: SAS/SASU
A SAS or SASU legal form is a flexible solution for creating your company in France as it does not require a legal auditor. An SAS requires a president and one shareholder, they may also be the same person in which case the company’s legal form will be a SASU – a “Société par Actions Simplifiées Unipersonnelle.”
There is no minimum starting capital required to create a SAS or SASU company in France, you just need €1. This legal company form is ideal if you are looking to raise capital in France, such as private equity.
Creating a SAS or SASU is a popular solution for foreign investors setting up subsidiaries in France.
Option 2: SARL/EURL
A SARL is the French equivalent of a Limited Liability Company. A SARL is the most common type of French company, as it is simple to set up and run, and does not require a legal auditor. A EURL is a limited company that is owned by one sole trader.
No minimum starting capital is required to establish a SARL or EURL company in France, just €1. A SARL may have 1 or more managers and up to 100 partners. There are also no issues regarding equity or securities for companies that plan on raising funds.
Setting up a SARL or an EURL is the simplest solution for investors planning on creating a company in France.
Option 3: SA
Creating an SA company in France is a sophisticated solution, popular among investors that want to have many shareholders or go public on the stock exchange. An SA company requires a minimum of 2 shareholders, and is eligible for IPO.
French SA companies have 1 chairman & CEO or 1 chairman & 1 CEO, as well as a board of directors.
Establishing an SA is a good option for investors establishing a joint venture in France as a legal auditor is required. The operating rules for an SA are established by law, and this type of company required a minimum starting capital of €37,000.
Now you know everything there is to know about setting up a business in France! Feel free to visit our website to find out more about the current opportunities and the support we can offer. Our company is sponsored by regional governments throughout France to facilitate your French expansion and support you in setting up your business in the country. As a full-funded service, Invest-HUB is here to help at any moment. If you have any other questions, don’t hesitate to contact us.
Your contact: Poppy Newall, expansion project manager, +33 434 083 095, email@example.com