S.A.S Société par action simplifiée
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. If it does, the parent company may be exposed to a tax reclassification as a permanent establishment in France.
2. Liaison Office / Representative Office
This legal form no longer exists as a separate legal status under French law.
Although a foreign company may lease office premises in France, it cannot obtain a SIRET number or a KBIS solely on the basis of a representative office. A SIRET number is generally issued only when employees are registered in France, thereby creating an official administrative presence.
Any commercial activity exceeding a purely representative role may lead to 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 registered share capital is partially or wholly owned by the foreign parent company (see: How to Form a SARL/SAS).
A subsidiary 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 registered share capital in France.
A branch is subject to:
French accounting regulations (French GAAP).
French corporate income tax.
Tax Representation
5. Fiscal Representative / Fiscal Agent
A Fiscal Representative (or Fiscal Agent) represents 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 registration, VAT registration, or the filing of French tax and VAT returns.
SARL / SAS
Types of Limited Liability Companies in France
In France, the two principal forms of limited liability companies are the SARL (Société à Responsabilité Limitée) and the SAS (Société par Actions Simplifiée).
SARL
In a SARL, each shareholder’s voting rights at General Meetings are proportional to the number of partnership interests (parts sociales) held.
SAS
An SAS offers greater flexibility by allowing the creation of different classes of shares, including shares with or without voting rights.
This flexibility may be useful when the company wishes to:
Introduce employee profit-sharing schemes.
Open the share capital to external investors.
Create different categories of shareholders with specific rights.
Unlike a standard employment contract, the status of Legal Director (Gérant in a SARL or Président in an SAS) does not provide entitlement to the French unemployment insurance scheme.
However, private income protection insurance, such as GSC (Garantie Sociale des Chefs d’Entreprise), may be purchased to cover this risk.
Incorporation Requirements
Shareholders
Minimum: 1 shareholder (SASU – Single-Member SAS).
Maximum: Unlimited number of shareholders.
Share Capital
The minimum registered share capital is €1.
Although the legal minimum is very low, banks, customers, suppliers, and investors often expect a more substantial level of paid-up capital for commercial credibility and financial stability.
It is therefore advisable to consider the capital structure carefully and, where appropriate, compare the paid-up capital of competitors operating in the same sector.
Share capital also 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 for the incorporation of an SAS:
Publication of the mandatory legal incorporation notice.
Signed Articles of Association (Bylaws), generally drafted by a lawyer.
Minutes of Incorporation appointing the President and, where applicable, the Managing Director(s) (Directeurs Généraux).
Proof of the registered office, including either:
A commercial lease agreement; or
A domiciliation agreement.
A bank or CARPA certificate confirming that the share capital has been deposited prior to registration.
Documents relating to the President and any Managing Directors, including:
A certified copy of a valid passport.
Proof of residential address.
A sworn declaration (affidavit).
Declaration of the Ultimate Beneficial Owner (UBO) (equivalent to the Person with Significant Control (PSC) register in the United Kingdom).
Key Registration Documents and Information
Following incorporation, the company will receive the following official documents and registration numbers:
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 (TVA).
Applicable Collective Bargaining Agreement (Convention Collective Nationale – CCN), where relevant.
Annual Accounting and Tax Compliance
The company must prepare and file its annual:
Financial Statements.
Annual Accounts.
Corporate Tax Return (Liasse Fiscale).
These filings must be submitted to:
The French Tax Authorities (Service des Impôts).
The Commercial Court Registry (Greffe du Tribunal de Commerce).
They are generally due within four to six months after the end of the financial year.
Statutory Auditor (Commissaire aux Comptes – CAC)
In addition to appointing a Chartered Accountant (Expert-Comptable), a company must appoint a Statutory Auditor (Commissaire aux Comptes – CAC) if at least two of the following three thresholds are exceeded:
Total Balance Sheet: more than €5 million.
Annual Turnover: more than €10 million.
Average Number of Employees: more than 50.
Shareholding
Shareholders of an SAS hold shares (actions) rather than partnership interests (parts sociales), which are used in a SARL.
Shares are allocated according to each shareholder’s contribution to the share capital.
Shareholder contributions may take several forms:
Cash Contributions.
Contributions in Kind (assets).
Contributions in Industry (labour, expertise, or know-how).
One of the principal advantages of an SAS is the possibility of creating different classes of shares.
These may include:
Shares with voting rights.
Shares without voting rights.
Shares carrying specific financial or governance rights.
As a result, certain shareholders may not participate in major corporate decisions, depending on the rights attached to their shares.
The President
The President of an SAS may be either:
A natural person; or
A legal entity (another company).
The President is generally appointed by the General Meeting of Shareholders for either a fixed or an indefinite term.
The President represents the company in all dealings with third parties and has full authority to manage the company’s day-to-day operations.
However, significant decisions—particularly those affecting the company’s assets, strategic direction, or corporate structure—generally require prior approval from the shareholders in accordance with the Articles of Association.
Liability and Income Protection
The President and any Managing Directors (Directeurs Généraux) should ensure that appropriate insurance coverage is in place, including:
Directors’ and Officers’ Liability Insurance (D&O Insurance).
Private Income Protection Insurance, where appropriate, as their corporate office does not automatically provide entitlement to French unemployment insurance benefits.
