Liaison Office

Set up of a Liaison office in France

A foreign company can be established in France by setting up a representation or legal entity whose form can range from the simplest to the most complex, and from the most dependent on the parent entity to the most autonomous. The liaison office in France is the best option to enter the European Market.

How to choose your office structure

Later in the article we will map the characteristics of each way to settle down in France. To help your choice, you will find below a quick decision chart describing the most adapted structure between Liaison Office, Branch and Subsidiaries. It is generally preferred to start with a liaison office, get it changed to a branch and later open a subsidiary.

a simplified version to be customized upon your business specifics ( Logistics / Manufacturing / Service / Employees..)


Filiale, Succursalle ou Bureau de Liaison

What is a representative or liaison office 

A liaison office is a preliminary status before the creation of a stable entity.The liaison office is the least restrictive type of entity for setting up business in France for the first time. It is the most adapted way to investigate, network and build a market presence with marketing and administrative activities.

It thus only plays the role of a relay, preparing the negotiations with stakeholders, partners, suppliers or customers in France. 

Its purpose is not to engage in commercial activity and to conclude contracts in the name and on behalf of the foreign company. If commercial relations are envisaged in France, invoices and contracts must be sent and signed directly by the foreign company.

The liaison office has no independent legal personality and is therefore not required to keep accounts. As it carries out only a preparatory or ancillary activity, it is not considered a stable establishment for tax purposes.

Why a Liaison Office

Paris Liaison Office

Because It is an appropriate observation point that enables a foreign company to make its first contact in France with the various partners (customers, suppliers, banks, investors, etc.), to collect information and provide information on behalf of the foreign company.

It is also the perfect organization to build brand awareness in France or prepare the steps to establish a solid and long term presence.

The Liaison office or representation office presented below is the most basic way to start a business in France. Since January 2023, a unique web portal centralized all proceedings and formalities for the set-up of a liaison or representation office.


Liaison Office Europe and France

France is now the preferred foreign direct investment destination in Europe with considerable benefits for investing companies, the second-largest market in Europe, the leading pool of resources for R&D, start-ups, and the digital environment.

France’s recent changes in regulations and tax levels for corporations combined with the market size and economic environment have made it the most attractive place for investing in Europe.

(EY Rankings 2019 to 2023)

How to open a Liaison Office in France

First step in opening a Liaison Office

The parent company must appoint a local representative who will register for the office with the one-stop -shop company portal , a new provision from Jan. 2023, and, accordingly, with the local social security authorities and with the tax office if required. A mandate of power is required.

Appointing a representative in France to manage formalities

There are different ways of completing formalities 

  • Perform the procedures yourself, acting under the authority vested by the foreign company as the future legal representative of the company’s new establishment in France.
  • Delegate powers to a local representative of trust to represent you.
  • Delegate powers to one of your personnel or a partner in the company to be founded.
  • You will be asked to show proof of authorization or power of representation to complete the formalities when filing your application

Online formalities

Formalities for setting up, changing or closing a company or branches can be completed online. You can also track the progress of your applications on the internet.

Obtaining a Company Identification Number

 A simple declaration of existence to the one-stop-shop companies registration portal (Guichet Unique) is required in order to obtain company identification  numbers called SIREN and SIRET (Siren + 5 digits) : 

Identification Numbers in France

In France, the registration of the office with the Registry of Commerce (RCS)  is not mandatory  as long as no no commercial activity is carried out directly by this liaison office . 

However, to open a bank account, a registration with the Registry of Commerce (RCS) may be necessary in order to benefit from the K-bis extract often required by banking institutions.

If the liaison office has employees, the declaration formalities and the payment of social security contributions must be carried out with the URSSAF (Social Administrations) of the Bas Rhin (Eastern France) Department.

Documents for a application

  • Copy of the foreign parent company’s registration certificate
  • Certified true copy of the parent company’s articles of association
  • Copy of the document nominating the office’s representative
  • Proof of address or domiciliating in France
  • Identity of the representative

The list is not exhaustive and depends on the type of business operated and also the willingness to employ local staff.

Status of the Liaison Office

To summarize the legal, tax and employment status of an liaison office and his representative:


Domiciliation or Business Address of the Liaison Office

Finding a business domiciliating or business address is easy, the cost not exceeding 60€ per month in best cases.

It requests the signing of a three/six months renewable contract with a  business domiciliating specialized company. 

Should you need to lease premises, there are two main kinds of leases in France: commercial leases and professional leases (applicable to the renting of offices only, without reception of customers).

Registering the employees and Staff 

When hiring staff to perform work in France, you need to register them to the French Social Security system and pay related contributions. You register as a non-resident employer.

The registration process 

To declare and pay Social Security contributions, you may sign an agreement to appoint a representative residing in France. This representative will be personally responsible for declaring as well as paying all financial obligations normally incumbent upon the employer.

Whether or not the employer chooses to appoint a representative, she/he can also make all declarations and pay contributions in one go by way of the foreign firm’s slip (« titre firmes étrangères »/ TFE).

Qualifications for the liaison officer

The liaison officer is an “all-rounder” self-starter. He requires a range of skills

  • Communication. This may be one of the most important skills that a liaison officer needs. …
  • Problem-solving. Liaison officers may face problems in their day-to-day tasks that require solving. …
  • Self-motivated and self-starter
  • Language skills. …
  • Organization skills …
  • Conflict resolution.
  • Administrative and Dealing with Paper works
  • At ease with numbers or accounting

Liaison office and Taxes

The liaison office is not subject to income tax in France or VAT. The office may be eligible for local property tax depending upon the choice of set up (domiciliating, renting or owning) but is not subjected by the Territory Economic Tax (CET Contribution Economique Territoriale)

As explained earlier, the purpose of the liaison office is not to engage in commercial activity and therefore there is no tax related to the activity of the office. Nevertheless, if it appears that commercial transactions are performed by a liaison office in France, or by any employees sent out to work for the entity, it may be subject to tax in France.

France applies the principle of territoriality to taxation. — French and foreign companies are only taxed on the earnings generated by the companies they operate in France. Profits made by companies operated abroad are not taxable in France. — This rule applies regardless of whether the company is run as a subsidiary, a branch office or a permanent establishment. 

Grants and Tax credits

Tax credits for R& D expenses

France’s research tax credit is designed for businesses that incur research costs, while the innovation tax credit is an incentive restricted to SMEs, which can receive tax relief amounting to 20% of expenses incurred in designing and/or making prototypes or pilots of new products, as defined in tax regulations. Other innovation and R&D measures include the following: — Operating expenses incurred in connection with scientific and technical research can, at the company’s option, be capitalized (under certain conditions) or deducted in the year in which they are incurred. — France has specific tax rules for revenue from licenses and sublicenses, in the form of a reduced 15% tax rate.

Territory Grants for Foreign Investors

The PAT (Prime Aménagement du Territoire) is a territory development grant for industry and services is a form of direct investment aid to promote the establishment and development of businesses with plans to create sustainable operations and jobs in priority development areas eligible for regional aid (‘AFR’ zoning). — Businesses in the industrial and service sectors located in priority regional development areas. — The business may receive a grant of up to €15,000 per job created.

Sales Agents

If you wish to develop a commercial activity, sales agents. Foreign companies may use the services of a French sales agent for the marketing of their products and/or services on the French market. The sales agent would normally act in their own name and on their behalf as an intermediary between the foreign companies and the French market.

Agents are responsible for negotiating and may also be empowered to sign contracts for sales, purchases, leases and for the provision of services in the name and on behalf of their principals ((i.e. not on their own and behalf). In most cases, they are responsible for a defined geographical area and/or sector of activity. They are paid in part or in full by commission on completed transactions.

Except in cases of professional misconduct, the agent is entitled to compensation based on commissions received (in principle, this will be the equivalent of two years of the same).

They are a flexible and inexpensive means of introducing products to foreign markets, rather than establishing a French-based activity, such as a branch or a subsidiary.

Office ,Branch or Subsidiary in France

Companies can set up a branch or a subsidiary to conduct manufacturing or commercial operations in France through a
permanent principal or secondary establishment.

Branch – a simple option

Foreign firms can use branches to establish a presence in France for business activities. A legal representative leads each branch, much like an agency, and is responsible for relaying information to the main office. Decisions are unrestricted, and the branch can conduct the same operations as an industrial or commercial enterprise. However, branches are not legally distinct entities and the parent company is accountable for any actions taken. If the branch runs into financial difficulty, the parent company is responsible for settling any outstanding obligations.

Branches are permanent establishments with regard to tax laws and must pay corporate tax and VAT. The subsequent conversion
of a branch into a separately incorporated subsidiary is possible, but must comply with rules governing the sale and transfer of
a business, and is subject to taxation.

Setting up a Subsidiary : Benefits of a durable structure

A subsidiary is the most durable and sophisticated legal form for a foreign company wishing to develop its business in another country. By choosing to open a subsidiary in France , a company will become subject to French law and to the French tax system. Once you register your subsidiary, you will benefit from R&D tax credit benefits and will be able to apply for financial support from the state and the regions.

Creating a subsidiary that is registered under French law holds certain advantages; these include limiting the liability of the parent company to subsidiary-related debts, access to various forms of governance support when starting up or growing, and being able to enter into arrangements relating to technical royalties and commission payments (with pertinent fees still owing).

Differences between a branch and a subsidiary

  1. Legal Entity

  • Branch: A branch is not a separate legal entity from its parent company. It is considered an extension or a dependent part of the parent company.
  • Subsidiary: A subsidiary is a separate legal entity from its parent company. It is formed as an independent company with its own legal rights and obligations.
  1. Liability

  • Branch: The parent company holds full liability for the branch’s obligations and debts. Creditors can seek recourse from the parent company in case of financial difficulties.
  • Subsidiary: The subsidiary has limited liability, meaning its obligations and debts are separate from those of the parent company. The parent company’s liability is generally limited to its investment in the subsidiary.
  1. Governance and Control

  • Branch: The parent company retains full control and authority over the branch’s operations and decision-making. The branch operates under the parent company’s policies and management structure.
  • Subsidiary: The subsidiary has its own governance structure, including a board of directors and management team. The parent company may exert control through ownership of shares and representation on the subsidiary’s board.
  1. Taxation

  • Branch: The branch is not considered a separate taxable entity. It is typically subject to the same tax regulations and obligations as the parent company.
  • Subsidiary: The subsidiary is treated as a separate taxpayer. It has its own tax obligations, including corporate income tax and other applicable taxes, based on its profits and activities.
  1. Financial Reporting

  • Branch: The financial statements of a branch are generally consolidated with those of the parent company. The branch’s financial activities and results are reported as part of the parent company’s financial statements.
  • Subsidiary: The subsidiary prepares its own financial statements, which are separate from those of the parent company. The financial statements provide a distinct view of the subsidiary’s financial position, performance, and cash flows.
  1. Name and Branding

  • Branch: A branch typically operates under the parent company’s name and branding. It is associated with the parent company’s reputation and image.
  • Subsidiary: A subsidiary can have its own distinct name and branding, which may or may not include a reference to the parent company. It can establish its own identity in the market.
  1. Capital Requirements

  • Branch: A branch does not have separate capital requirements since it operates as an extension of the parent company.
  • Subsidiary: A subsidiary has its own capital requirements, which vary depending on the legal form chosen for the subsidiary (e.g., SARL, SA, SAS).

It’s important to note that the decision to establish a branch or a subsidiary depends on various factors. It includes legal considerations, tax implications, liability concerns, and operational requirements. Better consult with legal and financial professionals to determine the most suitable option for your specific business needs and objectives.

You have plans to start a liaison office, a branch or company  in France and need guidance and insights on the market ?  Our advisors will be delighted to support the design and implementation of your Business Strategy in France and Europe. Please contact us at Ipanovia 

About Emmanuel Facovi the Founder and Managing Partner

Emmanuel Facovi - Managing PartnerAs former CEO / senior executive (Nokia, Coface, FCI,  Kompass, Schneider, Areva…) his expertise consists in leading tech companies (SaaS, marketplaces, Techs) with ambitious growth objectives in fast-changing environments.
He is a cross-cultural high technology executive passionate about new technology, innovation, disruptive models, and above all, scaling up your business globally. One of the most renowned Experts in Data, Marketing Strategies of Tech and Digital Industries,
As an« all-rounder» entrepreneur with a proven track record of building high-performing teams, he has a wide skill set ranging from Strategy and International Sales performance, also encompassing Finance, Marketing/advertising and legal/HR/culture.
He is an enthusiastic leader, keen on making sure that the office develops every day into an even “Greater Place to work”, gathering professionals of diverse talents who succeed together with a common vision in mind. Contact me :