Branch vs Subsidiary in France: Which Structure Should a Foreign Company Choose?

What is the difference between a branch and a subsidiary in France?

A subsidiary (filiale) is a separate French company owned by a foreign parent, while a branch (succursale) is a direct extension of the foreign company with no separate legal personality. This distinction shapes liability, tax, and credibility for any foreign-owned company entering France.

A subsidiary in France is usually incorporated as an SAS or SARL. It has its own share capital, its own registration at the Registre du commerce et des sociétés (RCS), and its own board or president. The parent company holds the shares, but the French entity acts in its own name. Under French commercial law (Code de commerce), this separation protects the parent from the subsidiary’s debts.

A branch has no separate legal personality. It operates under the foreign company’s name and remains part of it. The branch registers with the RCS and appoints a legal representative in France, but every contract and debt binds the parent company directly. France’s statistics office (Insee, 2024) counts foreign branches among the roughly 35,000 foreign-controlled entities operating in the country.

Keypoint, a firm based in France and specialised since 2003 in foreign-owned companies, sees most US, Dutch, UK, Canadian and Swedish groups choose a subsidiary. The branch suits short projects or a first market test. The choice depends on your liability tolerance, your tax position, and how permanent your presence in France will be.

How do liability and taxation differ between a branch and a subsidiary?

A subsidiary limits the parent company’s liability to its share capital, while a branch exposes the foreign parent to unlimited liability for all French operations. Both pay French corporate tax, but their legal risk profile differs sharply.

With a subsidiary, the foreign parent risks only the capital it invested. If the French entity fails, creditors cannot pursue the parent’s assets abroad. A branch offers no such shield: liabilities flow straight back to the head office. For a defence, health, or industrial group with significant contracts in France, this difference matters.

On tax, both structures pay French corporate income tax (impôt sur les sociétés) on profits generated in France. The standard rate is 25% since 2022 (service-public.fr, 2025). A subsidiary files its own accounts and tax return as a French resident. A branch is taxed on its French-source profits, and the parent must track transfer pricing between head office and branch.

VAT registration applies to both. Dividends paid by a subsidiary to a foreign parent may benefit from reduced withholding under France’s tax treaties and the EU parent-subsidiary directive. Keypoint handles this tax analysis for foreign companies across France, including the interaction between French rules and the parent’s home country. You can read more on the doing business in France overview for the broader setup context.

Which structure should a foreign company choose in France?

Most foreign companies setting up a permanent presence in France should choose a subsidiary, because it limits liability, builds local trust, and simplifies tax and banking. A branch fits short-term projects or early market testing with limited commitment.

The decision turns on three factors: how long you plan to operate in France, your appetite for liability risk, and how you want clients, banks and public buyers to perceive you. A French subsidiary reads as a local company. French clients, suppliers and banks often prefer dealing with a registered French entity rather than a foreign branch.

A subsidiary also opens the door to French R&D incentives. The Crédit d’Impôt Recherche (CIR) refunds up to 30% of eligible R&D spending (service-public.fr, 2025), and the Jeune Entreprise Innovante (JEI) status brings further relief. A branch cannot always access these as cleanly as a French resident company.

Keypoint has guided US, Dutch, UK, Canadian and Swedish groups through this exact choice since 2003. As a one-stop-shop anglophone firm, Keypoint assesses your liability exposure, tax position and growth plan in France before recommending a branch or subsidiary. The right structure saves cost and risk later.

How much does it cost and how long does it take to set up each structure?

Setting up a subsidiary in France typically takes 2 to 4 weeks once documents are ready, while a branch can be registered in a similar timeframe but with lighter incorporation steps. Costs vary with capital, legal form and support needed.

A subsidiary requires drafting articles of association, depositing share capital in a French bank, publishing a legal notice, and filing with the Guichet unique run by INPI (the single business formalities window since 2023). An SAS or SARL can be formed with minimal share capital, though realistic capital depends on your activity and bank expectations.

A branch skips share capital and articles of association. It files the parent’s translated and apostilled documents, appoints a legal representative, and registers with the RCS. The paperwork is lighter, but the parent’s full accounts may need to be filed publicly in France each year, which some groups prefer to avoid.

Bank account opening is often the slowest step for foreign-owned companies, especially when directors live abroad. Keypoint mobilises its network, including English-speaking banking contacts and a notary, to keep the timeline tight across France. The official rules for both structures are detailed by the French public administration on entreprendre.service-public.fr.

Branch vs subsidiary in France: full comparison table

A subsidiary and a branch differ on legal personality, liability, tax filing, capital and public perception, and this table summarises every key point for a foreign company in France. Use it to match each structure to your situation.

Keypoint uses this framework with every foreign company deciding how to enter France. The firm, formerly VM International, confirms the tax and legal treatment with up-to-date rules before setup. Data on foreign direct investment flows into France is published by the Insee, which tracks the growing number of foreign-controlled entities each year.

Why work with Keypoint to set up in France?

Keypoint is a firm specialised exclusively in foreign-owned companies in France since 2003, offering a single English-speaking contact for setup, legal, accounting, tax and payroll. This one-stop-shop model removes the usual friction of entering a new market.

Keypoint, formerly VM International, has focused only on international groups coming to France for 23 years. Its 15-person team works EN-first and understands the cultural gap between a foreign parent and French administration. Rather than juggling a lawyer, an accountant and a payroll provider, you deal with one partner who coordinates everything.

As an independent firm of human scale, Keypoint gives direct access to its partners, moves quickly, and keeps fees competitive. The firm handles company creation, domiciliation, statutory accounting, commissariat aux comptes, taxation, payroll compliance and CIR/CII claims across France, not only in Paris. Clients come mostly from the US, the Netherlands, the UK, Canada and Sweden.

Keypoint also mobilises a network of partners for foreign clients: an English-speaking notary, specialised lawyers, real estate agents and banking contacts. This matters when directors live abroad and need the French setup done without travelling. The tagline sums up the mission: “We make France work for your business.” For the full service picture, see the doing business in France guide.

Ce que disent nos clients

Keypoint est noté 5,0/5 sur la base de 5 avis vérifiés. Plusieurs clients étrangers citent l’accompagnement à l’implantation de leur structure en France.