S.A.R.L. société à responsabilité limitée
Filiale (Subsidiary)
SEVERAL OPTIONS TO DEVELOP YOUR ACTIVITY ABROAD
Non-Stable Establishments (Representation Purposes Only)
1. Representative Foreign Entity (RFE)
The Representative Foreign Entity (RFE) acts on behalf of the foreign parent company and refers all business development matters to the parent company for validation.
The RFE cannot manage the entire commercial cycle. Otherwise, the parent company may be exposed to a tax reclassification as a permanent (stable) establishment in France.
2. Liaison Office / Representative Office
This legal form no longer exists as a separate legal status in France.
Although a foreign company may lease office premises in France, a SIRET number and official proof of existence (such as registration) are generally obtained only when employees are registered in France.
Any commercial activity exceeding a purely representative function may result in a tax reclassification as a permanent establishment.
Stable Establishments (Subject to French GAAP Compliance)
3. Subsidiary
A Subsidiary is a fully incorporated French company whose share capital is partially or wholly owned by the foreign parent company (see: How to Form a SARL).
It is subject to:
French accounting regulations (French GAAP).
French corporate income tax.
4. Branch
A Branch is a permanent establishment of a foreign company operating in France without share capital in France.
It is subject to:
French accounting regulations (French GAAP).
French corporate income tax.
Tax Representation
5. Fiscal Representative / Fiscal Agent
The Fiscal Representative (or Fiscal Agent) acts on behalf of the foreign parent company for French tax and VAT matters.
This arrangement is generally required when the foreign company does not have a registered permanent establishment in France but carries out transactions that require French tax and VAT registration, reporting, or compliance.
SARL / SAS
Types of Limited Liability Companies in France
In France, the two main forms of limited liability companies are the SARL and the SAS.
SARL (Société à Responsabilité Limitée)
In a SARL, each shareholder’s voting rights at the General Meeting are proportional to the number of shares held.
SAS (Société par Actions Simplifiée)
An SAS offers greater flexibility by allowing the creation of different classes of shares, including shares with or without voting rights.
This structure may be particularly suitable when the company’s legal representatives wish to:
Involve employees in the company’s profits.
Open the share capital to external investors.
Create different categories of shareholders with specific rights.
Incorporation Requirements
Shareholders
Minimum: 1 shareholder (Single-Member SARL – EURL)
Maximum: 100 shareholders (SARL)
Share Capital
The minimum share capital is €1, following the Dutreil Law (August 2003).
However, banks, investors, and suppliers often expect a higher level of paid-up capital for commercial and financial credibility, regardless of the legal minimum.
It is also important to note that share capital serves as a financial buffer to absorb potential losses.
Under French company law, shareholders’ equity must remain above 50% of the registered share capital. If equity falls below this threshold, the company may be required to recapitalise within two years and may be classified by the Banque de France as a financially at-risk company.
Incorporation Documents
The following documents are generally required to incorporate a French company:
Publication of the mandatory legal incorporation notice.
Three original signed copies of the Articles of Association (Bylaws).
Three signed copies of the Incorporation Minutes appointing the Legal Director(s).
Proof of the registered office, including either:
A commercial lease agreement; or
A domiciliation agreement.
A bank certificate confirming that the share capital has been deposited before registration.
Documents relating to the Legal Director (Gérant), including:
A certified copy of a valid passport.
Proof of residential address.
Two sworn declarations (affidavits).
Form M0 together with the applicable registration fees payable to the Commercial Court Registry (Greffe du Tribunal de Commerce).
Declaration of the Ultimate Beneficial Owner (UBO) (equivalent to the Person with Significant Control (PSC) register in the United Kingdom).
Time Required for the Registration of a SARL
The average registration timeline for a SARL is as follows:
KBIS (Certificate of Incorporation) and INSEE registration: approximately 3 weeks.
VAT registration: approximately 1 month.
Key Registration Documents and Identification Numbers
Once the company has been incorporated, the following documents and registration numbers are issued:
KBIS – Certificate of Incorporation.
INSEE Registration Certificate.
Welcome Letter from the French Tax Authorities (Service des Impôts).
RCS Number (Registre du Commerce et des Sociétés – Commercial Register).
SIRET Number.
APE Code (Business Activity Code).
French VAT Number.
Shareholding
The shareholders of a SARL hold partnership interests (parts sociales) rather than ordinary shares (actions).
These partnership interests are allocated according to each shareholder’s contribution to the share capital and in proportion to the nominal value of each interest.
Shareholder contributions may take several forms:
1. Cash Contributions (Apports en Numéraire)
Capital contributed in cash.
2. Contributions in Kind (Apports en Nature)
Contributions of tangible or intangible assets, including:
Real estate.
Land.
Machinery and equipment.
Vehicles.
Goods and inventory.
Goodwill.
Trademarks and brands.
Patents.
Designs and models.
Lease rights.
Other business assets.
3. Contributions in Industry (Apports en Industrie)
Contributions consisting of:
Labour.
Technical expertise.
Professional know-how.
Services or specialised skills.
The Legal Director (Gérant)
The Gérant must be a natural person and is generally appointed by the General Meeting of Shareholders for either a fixed or an indefinite term.
The Legal Director represents the company in dealings with third parties and has full authority to manage the company’s day-to-day operations.
However, certain strategic decisions—particularly those affecting the company’s assets or long-term interests—require prior approval from the General Meeting of Shareholders.
Social Status of the Legal Director
The company’s shareholding structure directly determines the Legal Director’s social security status.
Depending on the level of share ownership, the Gérant may be classified as either:
Self-employed (Travailleur Non Salarié – TNS); or
Employee-equivalent (Assimilé Salarié).
The applicable status has significant implications for social security contributions and employee benefits.
It is also strongly recommended to verify the Legal Director’s entitlement to unemployment benefits with France Travail (formerly Pôle emploi), as eligibility depends on the specific circumstances of the appointment and the existence of a genuine employment relationship.
