Are you running a Spanish company and looking to expand into the French market? Set up a business in France successfully and you gain access to major opportunities, but careful planning is essential when it comes to legal, tax, employment and administrative matters. From setting up a subsidiary and dealing with taxation to recruitment, payroll and day-to-day management, here are seven key steps to consider before starting your business operations in France.
1. Set up a business in France by defining your project
Before completing any administrative formalities, the first step is to determine exactly what you intend to do in France.
Do you simply want to sell products or services to French customers from Spain? Hire an employee based in France? Temporarily post Spanish employees to carry out a project? Open a sales office? Or establish a fully fledged French business structure?
Each of these situations may result in different obligations.
A foreign company can carry out certain economic activities in France without immediately incorporating a French company. This does not necessarily mean, however, that it has no administrative or tax obligations in France.
Permanent establishment: a key consideration
When a Spanish company begins conducting business in France on an ongoing basis, it is particularly important to determine whether its activities constitute a permanent establishment.
This classification can have significant tax consequences and depends on the nature of the activities, the way they are organised and the company’s presence in France.
The issue should therefore be examined before operations begin rather than discovering later that certain French formalities should have been completed.
2. Choose the right structure to set up a business in France
There is no single legal structure for companies wishing to set up a business in France.
Depending on your activities, objectives and the importance of France within your international strategy, several options may be available.
In some circumstances, the Spanish company may continue operating directly from Spain, open an establishment or branch in France, or incorporate a French company owned by the Spanish parent company.
Subsidiary or branch?
A subsidiary is legally separate from its parent company. It has its own legal personality and operates as a French company, even if its shares are owned by a Spanish company.
A branch, by contrast, is an extension of the foreign company and does not have a separate legal personality.
The decision should therefore not be based solely on which option appears to involve fewer formalities. Taxation, liability, group structure and future development plans should also be considered.
3. Plan your French administrative procedures
Once you have selected the appropriate structure, the administrative process begins.
Incorporating a company or opening an establishment in France involves preparing the necessary documents, completing registration formalities and obtaining the identifiers required to operate.
For a foreign company, the challenge often lies not in any individual procedure but in knowing the correct sequence and identifying the appropriate authorities and professional contacts.
Business creation, amendment and closure formalities in France are now centralised through the Guichet unique des formalités des entreprises.
Prepare your documentation in advance
To set up a business in France efficiently, it is advisable to prepare documents relating to the Spanish company, its directors and the proposed French activities in advance.
Depending on the chosen structure, additional documentation may be required, including articles of association, proof of registered address, details of company officers, beneficial ownership information and documents relating to share capital.
Good preparation can prevent unnecessary delays.
4. Consider taxation and VAT before starting operations
The tax treatment of business activities in France depends heavily on how those activities are structured.
A Spanish company without a permanent establishment in France may nevertheless have certain French tax obligations.
VAT is particularly important. Certain transactions carried out in France may require French VAT registration even when the company remains legally established in Spain.
Do not wait until you issue your first invoice
Tax implications should ideally be considered before signing your first contracts and issuing your first invoices.
This makes it possible to determine which entity should invoice the customer, which VAT number should be used, where VAT is due and which returns may need to be filed in France.
Since 2026, businesses must also take account of the phased introduction of France’s new electronic invoicing and e-reporting requirements.
5. Prepare for recruitment and employee administration
Business development often leads a Spanish company to hire its first employee in France.
This is an important step when you set up a business in France, as employing staff entails a range of French obligations, including pre-employment declarations, employment contracts, payroll, social security contributions, occupational health requirements, health insurance and social security reporting.
In certain circumstances, a Spanish company can employ someone in France without first incorporating a French subsidiary. The absence of a subsidiary does not, however, remove the employer’s obligations under French employment and social security rules.
Hiring and posting workers are not the same
It is also important to distinguish between hiring an employee in France and temporarily posting an employee who normally works for the company in Spain.
Under an EU posting arrangement, the employee remains employed by the sending company, although specific rules apply regarding employment conditions, declarations and social security.
Subject to the relevant conditions, posted employees may remain covered by the social security system of their home country. This status is documented using the portable A1 certificate.
6. Organise banking, business address and local partners
To set up a business in France successfully for the long term, legal and administrative arrangements are only part of the process. The company also needs the right operational environment.
Depending on the project, this may involve arranging a registered business address, opening a bank account, finding premises, arranging insurance and identifying suitable suppliers and business partners.
Establishing a banking relationship may require extensive documentation relating to the Spanish company, its beneficial owners, directors and the source of funds.
Preparing these documents in advance helps prevent banking issues from delaying the start of operations.
Build a professional network in France
Having access to the right professionals from the outset can also make a significant difference.
Accountants, lawyers, banks, insurers, property professionals, HR specialists and operational service providers can all play a role. A reliable local network can save considerable time for a company entering the French market.
7. Plan for day-to-day management after setup
Company registration is not the end of the process. In many ways, it is only the beginning.
Once operations have started, the company must keep track of its administrative, employment and tax obligations, manage employees, coordinate service providers and deal with requests from the French authorities.
Any plan to set up a business in France should therefore consider day-to-day management from the outset.
A well-organised administrative structure allows directors and their teams to focus on what really matters: developing the business.
Get the right support to set up a business in France
France and Spain are both part of the European single market, but their administrative, tax and employment practices remain significantly different.
A procedure that is straightforward in Spain may not have an exact equivalent in France. Similarly, French requirements can sometimes be difficult to identify when entering the market for the first time.
DA Communication supports Spanish companies setting up and developing their business in France, from company formation and administrative procedures to recruitment, employee management, payroll, posted workers and coordination with a network of specialist partners.
Planning a project in France? Let’s discuss your needs and find the right solutions to support the development of your business.
