Opening a branch or subsidiary in France

Establishing a branch in France ? Or a subsidiary ?

How to make you choice ?

When expanding abroad, the first question to ask clearly concerns the best legal structure and whether to opt for a branch or subsidiary. What are the differences between the two?

A branch is a permanent secondary establishment but is not a separate legal entity from the foreign parent company.  Accordingly, the assets are not separate and the parent company is fully liable for the branch financially.

From a tax perspective, the branch is subject to corporation tax in France on the income recorded in its own books. 

In contrast, a subsidiary is a company under French law and is legally separate from its foreign parent company; it has its own assets and is fully responsible for its affairs. 

The choice of legal structure 

A number of criteria require consideration when determining the most appropriate legal structure for your French presence: the number of partners required and their respective liability (unlimited or limited by contributions); the minimum level of share capital; the management and governance of the company; the employment status of the management; etc. To help you choose the right structure, have a look at our guide on setting up business in France, where we examine the two main structures available to business in France: LINK