Foreign companies have several choices when deciding to establish their operations in France. Considering each company has its own needs and purpose, they can choose subsidiaries and branches if they intend to carry out commercial activities in France, or they can set up liaison or representative offices if they want to test the local market first.
Our company formation representatives in France can offer extended information on the main differences between branches, subsidiaries and liaison offices. We can also help the representatives of foreign companies interested in setting up a presence in France to open a liaison office. Later, we can also help them set up branches or subsidiaries in France.
Under the French Company Law, the liaison office is not recognized as a legal entity, even if it is acknowledged by it. The representative office, in fact, is considered an extension of a foreign company in France, just like the branch office, but with a few differences which consist of:
Another important aspect which needs to be considered upon the establishment of a liaison office is that the parent company will have full liability over it, just like in the case of a French branch office.
The main reason for a foreign company to open a representative office in France is to verify if the French market suits their interests and if their products or goods can meet the requirements of potential clients here.
Our French company formation specialists can offer more information on the advantages connected to opening a liaison office.
It is important to know that the liaison office needs not to be registered with the Trade Register in France, however, it will need to be taken into the evidence of the Companies Formalities Center which is administered by the Chamber of Commerce in the city the representative office will activate.
The Companies Formalities Center will issue the tax identification number – SIREN number. This number can be used for opening a bank account for the liaison office. We would also like to mention that the opening of a bank account is not mandatory, however, it can be of help to the foreign companies interested in converting the liaison office into a branch or a subsidiary.
As mentioned above, our company formation advisors in France can help you set up branches and subsidiaries here.
In order to open a liaison office in France, one must appoint a local representative who will register the office with the local social security authorities and with the tax office. The liaison office is not required to register for VAT, as it cannot carry out any income-generating activity, however, the social security registration is required as the parent company may have an employee or send a delegate from the main offices to handle the French representative office’s operations.
The documents required to set up a liaison office in France are the same as when opening a branch office. For this purpose, the Certificate of Incorporation and the Articles of Association of the parent company and a resolution for the establishment of the liaison office are required. The passport or other identification papers of the person registering the office are also required.
Even if it is not a mandatory requirement to have employees, the liaison office is allowed to hire one or more individuals. It must be noted that the number of employees depends on the activity of the parent company and the main reason the office was created for.
Even if the liaison office is not registered with the French Trade Register, at the moment it will hire employees, it needs to register them with the authorities for social security and health and pension insurance purposes. For this, it will need to obtain a SIRET number which is issued together with the SIREN number.
The foreign company will be required to pay the social contributions related to the employment of local or foreign citizens in the French liaison office.
Considering the liaison office will not conduct any taxable activity, it will not be subject to the corporate tax in France, therefore it does not need to register for taxation with the authorities here. However, if the parent company rents office space for the liaison office to complete its activities, it will be subject to the council tax.
Another important aspect to consider is that the French liaison office will not be subject to the value added tax.
Our company registration consultants in France can also advise on various tax regulations applicable in this country.
The representative or liaison office, bureau de liaison in French, is the best option when deciding to verify if the French market suits one’s goals. The French liaison office does not need to be registered with the Companies Registrar, which will reduce the time spent on the opening of the entity. Foreign entities may use their representative offices in France to carry out research activities.
Representative offices in France are restricted from undertaking any commercial activity, therefore it cannot sign contracts on behalf of the parent company or be considered a separate legal entity from the foreign company.
Here are some of the most frequently asked questions on the French liaison office:
1. Is it hard to register a liaison office in France?
No, it is not. As a matter of fact, the registration of a liaison office in France can be completed in a few days.
2. Does the representative of the parent company in the liaison office have to be a French resident?
Yes, the representative must be a French resident.
3. Can I detach employees from the parent company to the liaison office in France?
Yes, it is possible for the employees of the parent company to be sent to the liaison office.
4. Is the liaison office subject to any share capital requirements?
No, there are no share capital requirements for the opening of a liaison office.
For assistance in opening a representative office, do not hesitate to contact our company registration agents in France.