Setting up in France: the foreign founder's roadmap

Quick answer. To set up your business in France, you register a subsidiary (SAS, SARL) or a branch through the INPI one-stop shop, mandatory since 1 January 2023. A subsidiary has its own legal personality and is subject to French corporate income tax; a branch binds the foreign parent company directly.

Setting up in France is not only a question of market or talent: it starts with a legal-structure decision that drives your taxation, your liability and the weight of your accounting obligations. A foreign founder who gets this step wrong pays dearly to correct it later. This roadmap describes the real path, step by step, as we see it in the files of foreign companies opening a French operation.

The form of establishment shapes everything that follows. A foreign company has three main options, and they carry neither the same liability, nor the same taxation, nor the same formalities.

A subsidiary is a fully fledged French company (SAS, SARL or other) with its own legal personality. It limits the parent company's liability to its contributions and is subject to French corporate income tax. A branch has no separate legal personality: it is an extension of the foreign parent company, which it binds directly. A liaison office may not carry out any commercial activity; it serves only to represent, prospect or observe the market, and is therefore not subject to corporate income tax.

Our reading. In most projects aiming at lasting growth in France, the subsidiary wins: it protects the parent's assets, reassures clients, banks and partners, and draws a clear tax line between the two countries. A branch still makes sense for a temporary presence or a market test with accepted liability. A liaison office only fits a strictly non-commercial phase.

For a deeper comparison, see our dedicated analysis of subsidiary, branch or liaison office and, if you are structuring several entities, the French holding and EU subsidiary setup.

No. A foreign director can run a French company without residing there, for example as president of a SAS. The director's nationality and place of residence do not block the company's registration.

The distinction matters: running a company remotely falls under company law, while physically carrying out an activity on French soil falls under residence law. A non-EU national who wishes to come and work in France must therefore hold a residence permit suited to the project, for instance a talent passport. An EU national moves and settles freely.

The underestimated risk. Many founders confuse the two questions and believe they must reside in order to incorporate. They needlessly delay their project, or conversely neglect the residence side when they actually intend to settle. From the outset, separate governance (who runs the company, from where) from residence (who lives and physically works in France).

The procedure follows a logical sequence. Each step conditions the next, and some, such as opening the bank account, take longer than expected for a structure with foreign ownership.

1. Choose the structure: decide between a subsidiary (SAS or SARL) and a branch depending on your need for limited liability and local autonomy.
2. Draft the bylaws and gather the documents: prepare the bylaws and collect the foreign representative's supporting documents (identity, proof of address, translations where applicable).
3. Register the company: file the registration application on the INPI one-stop shop, which forwards it to the National Business Register.
4. Open a business bank account: deposit the share capital and obtain the certificate of deposit of funds, a step often lengthened by beneficial-owner identity checks.
5. Register for VAT: obtain the intra-EU VAT number to invoice and report correctly.
6. Set up payroll and appoint a chartered accountant: declare the first employees through the DSN and secure accounting, VAT and year-end closing.

The full detail of incorporation is in our guide on creating a French company as a non-resident, in English in set up a French company as a foreigner, and the branch-specific procedure in opening a French branch for a foreign company.

Since 1 January 2023, all business formalities go exclusively through the INPI one-stop shop, available at formalites.entreprises.gouv.fr. This applies to registration, amendments, cessation and the filing of annual accounts.

The one-stop shop feeds the National Business Register (RNE), which now centralises legal information. The former routes, business formality centres and direct counters at the commercial court registry, are no longer the entry point. For a foreign director, this simplifies the administrative path but requires a complete, correctly translated digital file.

What the authorities look at. A registration file is rejected when the corporate purpose is vague, when the foreign representative's documents are incomplete or untranslated, or when the beneficial owner is not clearly identified. Prepare these elements upstream rather than reacting to a rejection, which pushes back the whole timeline.

On paper, opening a business account is a formality. In practice, it is the step that slows foreign-owned projects the most. Banks apply enhanced checks on the origin of funds and the identification of beneficial owners, especially when the parent company is foreign.

A common case. A North American software publisher consulted us while hesitating between a branch and a subsidiary for its arrival in France. It had underestimated one point: opening the account and depositing the capital of its future subsidiary required several weeks of bank verifications, the time needed to document the US ownership structure. Anticipating this file as early as the structure decision spared it from holding up the first salary payments.

Prepare upstream the parent company's bylaws, the ownership chart, the directors' identity documents and proof of the origin of funds. The clearer the ownership chain, the faster the account opens.

A French subsidiary is subject to corporate income tax. The standard rate is 25%. A reduced rate of 15% applies to the share of profit up to or equal to 42,500 euros for small and medium-sized companies whose pre-tax turnover is below 10 million euros and whose fully paid-up capital is held at least 75% by individuals (French Tax Code, article 219, I-b).

This reduced rate deserves attention for a foreign group: the condition of 75% ownership by individuals is rarely met when the subsidiary is held by a foreign parent company. In that case, the profit is taxed at the standard rate of 25% from the first euro. This is a point we check systematically when structuring the setup.

Sending profits back up to the parent raises another question, that of withholding tax on dividends: we address it in dividends paid to a foreign parent company. For US structures, see also US LLC and French subsidiary.

Any company established outside the European Union and liable for VAT in France must in principle appoint a fiscal representative, that is, a taxable person established in France (French Tax Code, article 289 A). A company established within the European Union is exempt and simply registers or appoints an agent.

Trade-off. Creating a French subsidiary is precisely how you avoid this fiscal-representative constraint: the subsidiary, a French company, registers for VAT directly and obtains its intra-EU number. Conversely, a non-EU company carrying out taxable transactions in France without a subsidiary must deal with the fiscal representative, its joint liability and its cost. This is one of the concrete arguments in favour of a subsidiary for a non-European group.

On thresholds, the VAT exemption stands at 37,500 euros for services and 85,000 euros for sales of goods. The single threshold of 25,000 euros, considered for a time, was abandoned by Law no. 2025-1044 of 3 November 2025. The fiscal-representative topic is detailed in fiscal representative in France for a foreign company.

Once registered, the subsidiary keeps its accounts under the General Chart of Accounts (ANC regulation 2014-03). It draws up annual accounts, files a tax return (form 2065 for corporate income tax) and must be able to provide its accounting entries file (FEC) in the event of an audit (Tax Procedure Code, article L. 47 A, I).

Electronic invoicing is entering a new phase. Receiving electronic invoices becomes mandatory for all taxable businesses from 1 September 2026. On the issuing side, the obligation starts on 1 September 2026 for large companies and mid-sized companies, then on 1 September 2027 for SMEs, very small businesses and micro-enterprises.

2026 watch points. A subsidiary starting up in 2026 must be able to receive electronic invoices from 1 September, regardless of its size. The issuing schedule, later for small structures, must not overshadow the receiving obligation, which applies to everyone immediately.

Some situations significantly change the roadmap.

• EU national versus non-EU national: an EU national settles and works freely; a non-EU national who wants to work physically in France needs a suitable residence permit, even though they can run the company remotely without one.
• Parent company in the EU versus outside the EU: the fiscal-representative exemption applies to companies established within the Union; companies outside the EU liable for VAT in France must in principle appoint one.
• Pure service provider: if the activity is exclusively services and stays below the 37,500-euro threshold, the basic exemption may apply for a time, but it closes the right to deduct VAT, which often penalises an investing structure.
• E-commerce and distance selling: the VAT rules on distance selling and dedicated one-stop schemes overlap with the establishment choice and call for a separate review.

Before launching any formality, gather the following. A complete file upstream avoids most delays.

• Bylaws of the foreign parent company, translated if needed.
• Ownership chart showing the beneficial owner.
• Identity documents and proof of address of the director or directors.
• Draft bylaws of the French subsidiary and a precise definition of the corporate purpose.
• A French registered-office address for the head office.
• Proof of the origin of the funds intended for the capital.
• A plan of first hires to anticipate payroll and the DSN.

For full support on incorporation, see our business creation in Paris service. English-speaking directors can rely on our English-speaking accountant in Paris and, more broadly, on our international desk.