Foreign companies have several choices when deciding to establish their operations in France. Considering each company has its own needs and purpose, they can set up liaison or representative offices if they want to test the local market first. Our representatives for setting up a company in France can offer extended information on the main differences between branches, subsidiaries, and liaison offices.
| Quick Facts | |
|---|---|
| The purpose of a liaison office in France | – for promoting the activities of a foreign company in France, – great for getting in touch with potential local partners and collaborators |
How is the liaison office also known in France? | Representative office |
How can a representative office be registered in France? | By presenting the documents of the foreign company in question: – Articles of Association, – Certificate of Incorporation. Other standard forms can be solicited. |
| Can a liaison office in France have commercial activities? (YES/NO) | NO |
| Contracting potential clients and partners (YES/NO) | YES |
| Local agent required (YES/NO) | YES |
| Attributes of a liaison officer | – developing market research, – carrying out business advertising, – contracting local customers, – communicating with the company from abroad |
| Bank account for a liaison office in France | Required for the expenses of the liaison office in France |
| Allowed to invoice local customers | Not available |
| Registration conditions for liaison office in France | Not required with the French Trade Register |
| The costs of opening a representative office in France | Supported by the foreign company represented in France |
| Travel requirements | Not mandatory, but recommended |
| Company identification number for a liaison office in France | SIRET and SIREN numbers |
| Time frame for opening a liaison office in France | A few days or months, depending on the formalities |
| Why choose our company formation agents in France? | We can provide: – assistance in preparing the documents for opening a liaison office in France, – support with the registration authorities, – complete services at affordable prices. |
The characteristics of a French representative office
Under the French Company Law, the liaison office is not recognized as a legal entity, even if it is acknowledged by it. The representative office, in fact, is considered an extension of a foreign company in France, just like the branch office, but with a few differences which consist of:
- the liaison office in France cannot undertake any type of commercial activity in France or abroad;
- the representative office in France cannot conclude contracts on behalf of the parent company with French clients;
- the liaison office in France can act as a contact point, meaning potential clients and associates can find out information about the parent company from the French liaison office;
- the representative office can engage in marketing and promotion activities in France;
- the representative office in France can also complete market research and various studies on the French market.
Another important aspect that needs to be considered upon the establishment of a liaison office is that the parent company will have full liability over it, just like in the case of a French branch office.
The main reason for a foreign company to open a representative office in France is to verify if the French market suits their interests and if their products or goods can meet the requirements of potential clients here.
Our French company formation specialists can offer more information on the advantages connected to opening a liaison office. Below is an infographic on this subject:
Requirements for opening a French liaison office
It is important to know that the liaison office is not to be registered with the Trade Register in France, however, it will need to be taken into the evidence of the Companies Formalities Center which is administered by the Chamber of Commerce in the city the representative office will activate.
The Companies Formalities Center will issue the tax identification number – SIREN number. This number can be used for opening a bank account for the liaison office. We would also like to mention that the opening of a bank account is not mandatory, however, it can be of help to foreign companies interested in converting the liaison office into a branch or a subsidiary.
As mentioned above, our company formation advisors in France can help you set up branches and subsidiaries here. We also invite you to watch our video presentation about liaison companies in France:
Hiring employees for a French liaison office
Even if it is not a mandatory requirement to have employees, the liaison office is allowed to hire one or more individuals. It must be noted that the number of employees depends on the activity of the parent company and the main reason the office was created.
Even if the liaison office is not registered with the French Trade Register, at the moment it will hire employees, it needs to register them with the authorities for social security and health and pension insurance purposes. For this, it will need to obtain a SIRET number which is issued together with the SIREN number.
The foreign company will be required to pay the social contributions related to the employment of local or foreign citizens in the French liaison office.
Taxation of representative offices in France
Considering the liaison office will not conduct any taxable activity, it will not be subject to the corporate tax in France, therefore it does not need to register for taxation with the authorities here. However, if the parent company rents office space for the liaison office to complete its activities, it will be subject to the council tax.
Another important aspect to consider is that the French liaison office will not be subject to the value added tax.
Our company registration consultants in France can also advise on various tax regulations applicable in this country.
Why open a representative office in France?
The representative or liaison office, bureau de liaison in French, is the best option when deciding to verify if the French market suits one’s goals. The French liaison office does not need to be registered with the Companies Registrar, which will reduce the time spent on the opening of the entity. Foreign entities may use their representative offices in France to carry out research activities.
Representative offices in France are restricted from undertaking any commercial activity, therefore it cannot sign contracts on behalf of the parent company or be considered a separate legal entity from the foreign company.
FAQ on the liaison office in France
Here are some of the most frequently asked questions on the French liaison office:
No, it is not. As a matter of fact, the registration of a liaison office in France can be completed in a few days.
Yes, the representative must be a French resident.
Yes, the employees of the parent company can be sent to the liaison office.
No, there are no share capital requirements for the opening of a liaison office.
If you are looking for extra services for your firm, our accountants in France can help you with the registration for the payment of taxes in the company and can offer you the payroll, bookkeeping, audits, preparation, and submission of annual financial statements, among others. For assistance in opening a representative office, do not hesitate to contact our company registration agents in France.