Liaison office

Are you looking to expand your business to France? Do you want to test the French market before considering incorporation? Setting up a Liaison Office may be the perfect option for you.

A liaison office allows non-resident employers to hire employees in France. It first requires the firm to register as a non-resident employer with URSSAF and then as a liaison office with the French companies register. The set-up can take up to a month maximum.

A liaison office does not run on a profit, as no commercial activity is carried out in it. This makes it useful for employing people in marketing, research or IT. This helps to facilitate a better understanding of French markets, thus reaping benefits for the future of your business.

There are several tax benefits when it comes to a liaison office. Incorporated businesses must pay corporate tax, VAT and CET (property tax), as well as be subject to bureaucratic French systems. In contrast, liaison offices are only subject to local property tax. There are also lower compliance costs. This is because a liaison office is not a separate legal entity.

To summarise the advantages of a liaison office:

No VAT or corporate tax
Quick and easy to set up
Lower compliance cost as it is not a separate legal entity
Easy liquidation procedure
No taxability issues as there is no income accrual
A liaison office is not required to follow many compliances
Low-risk means of testing business success in France
Opportunity to meet prospective clients and network

To note:

Cannot trade or generate revenue
Unlimited liability on the parent organization
Still subject to social security contributions, payroll tax and ongoing professional training