France Branch Office - Opening a French Branch of a Foreign Company

The disadvantages of a branch office are:

• The branch needs to present annual accounts to the Commercial Court in the same way as a normal company.
• It is often difficult and problematic to open a French bank account
• The branch needs to legalise its books of account in the same way as the company incorporated abroad
• The parent company is fully liable for the liabilities of the branch
• The branches representatives may be held jointly and severely liable for tax debts
• Financial statements of the parent must be lodged at the Companies Registry
• The branches obligations are the same as the parent, including filing VAT returns, employees returns and corporation tax returns, so there are few savings in administering a branch
• Banks and clients may prefer dealing with a French company rather than a foreign branch
• A branch is rarely ideal for substantial projects because the parent company runs the entire risk
• With the introduction of the European Company, there will be less need to establish branches
• Upon registration of a branch, evidence has to be provided of the legal existence of the parent
• Any public act by the branch, is likely to need ratification by the board of the foreign parent. A company that signs contracts in front of a notary on a regular basis, should incorporate for administrative ease
• The Gérant is required to validate any acts with the directors of the foreign company, such as buying property, because a French notary will always be uncertain of the gérant’s mandate.

The advantages are few:

• Branches can use the name of the foreign company (for example if it is a registered trade mark)
• Liability lies with the central company and not the branch

Requirements for registering a branch of a foreign company in France

• A company must have a place of business, thus an address, in France. Evidence of which must be supplied in form of a lease or certificate from an authorised domiciliation company.
• Parent companies must designate a representative for the branch office, who is responsible for over-seeing any duties carried out there.
• A representative of the parent company in its country of incorporation will need to be specified in the french company registry
• Needs a good standing certificate with the statutes translated into French
• A certified translation, in Fench, of the Certificate of incorporation.
• A certified translation, in French, of the Memorandum and Articles of Association of the mother company
• Needs the Act of the Company (with Directors) naming a representative in France
• The statutes need to be legalised
• A document, such as a rates bill, stating that the company has the right to use the premises intended.

Registration of a foreign company in France

Registering a foreign company in the French registry offers the appearance of a presence in France, however:

• The branch has no legal capacity, meaning that contracts must be entered into between the parent company and its co-contractors, even if the person signing the contract is the representative of the French branch office.
• Liabilities of the branch office are liabilities of the company itself.

From a tax and labour law perspective, the France branch office will have the status of an establishment in France and accordingly obtain its own VAT and SIRET (French registration code for businesses) numbers.

Opening such a branch office has the advantage of being a simple process. It does not, however, protect the company from possible liabilities in France, as the branch office does not have a distinct legal personality.

Registration is made at the company registry that has jurisdiction over the area in which the branch office will be located.

Documents required to register a branch

Registration is required for branches. The registration application must include:

• Two copies of the parent company’s articles of incorporation (two originals and two translated into French by a court-approved translator)
• Proof of address
• Certificate of good standing from the foreign company register
• Documents relating to the person empowered to act on behalf of the company (including declaration to the prefecture or commercial residence permit as appropriate).