You have a commercial or industrial activity and want to develop your activity in France ? You will face two types of structure which must be registered for the French Trade and Companies Register (RCS) : the branch and the subsidiary.

It is essential to dissociate these two types of setting-up because they can meet different types of objectives that you have set for yourself.  Do you want to develop a new activity ? Extend the existing one? Keep a close eye on the operation of your business ? Allow a great deal of autonomy ?

It is from the precise analysis of your project that you will have to make a choice between these two options available.

In order to help you and make this decision easier, we suggest you discover the pros and cons of these two forms of setting-up.


Branch Subsidiary
Pros • There are less administrative formalities for a branch than for the creation of a subsidiary :

  • Creating a branch only required the filing of the by-laws of the company on which it depends, the publication of a legal notice in a relevant newspaper, the filling of the registration file with the Registry.
  • The branch is not required to file the annual accounts with the Registry of the Commercial court.
  • It is not subject to the statutory audit of its accounts in France.

• Low cost of setting up.

• The branch allow you to “test” the market before thinking about setting up a subsidiary.

• The branch’s dependence on the parent company simplifies the management of the entity.

• Enables better management of a business growth.

• Generates savings : the subsidiary reduces the expenses incurred by an entire group.

• Optimizes the fiscal framework. Creating a subsidiary makes it possible to benefit from the tax group system and the parent-subsidiary system.

  • The tax group system can reduce the amount of income tax.
  • The parent-subsidiary system implies the absence of tax on dividends in France. Dividends are taxed only in the country of the parent company, i.e. in the United States.

• Low cost of setting up.

• It has legel autonomy.

Cons • As with a French company, the branch is subject to all commercial taxes.

• The branch must keep accounts, although it does not own any asset separate from the foreign company to which it is attached.

• In the event of economic or commercial failure, the parent company is fully liable. The risk is therefore fairly high for a group to set up a branch for an activity involving financial or commercial risks.

• Creating a subsidiary involves more administrative formalities :

  • Registration of your business.
  • Choosing the by-laws.
  • Deposit of share capital.

• Inability to perceive the legal and social consequences to which a foreign company is exposed in France, which can create confusion. The rules in the United States are not the same in France.


Defining the type of company structure best-suited to the project requires serious consideration and tailor-made support.

For more information and if you want the best support from our experts in your project, do not hesitate :

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