Key takeaway
The all-in year-1 cost of a French subsidiary is €8,000–20,000 in setup and recurring fees — before you've made a single hire. Understand the full picture before you commit.
One-Time Setup Costs
Creating a French legal entity (most commonly a SAS — Société par Actions Simplifiée) involves several upfront costs that are often underestimated:
Legal costs
Lawyer or online legal platform (Legalstart, Captain Contrat) for SAS statutes drafting and registration
Registration fees
Greffe du tribunal de commerce (RCS registration) + publication in BODACC/JAL
Share capital
SAS minimum capital is €1, but €1,000–10,000 is typical for credibility with clients and banks
Bank account opening
French banks require extensive KYB documentation. Neo-banks (Qonto, Shine) are faster but have limits
Annual Recurring Costs
Once the entity exists, the ongoing compliance burden is significant — even with zero employees and minimal activity:
- Accounting (expert-comptable): €2,500–6,000/year for basic bookkeeping, annual accounts, and tax filings
- Payroll administration (if hiring): €50–150/month per employee for fiches de paie and declarations
- TVA declarations: Monthly or quarterly filing required if you exceed the VAT threshold
- Corporate tax (IS): 25% on profits; minimum filing requirements even at a loss
- Cotisation foncière des entreprises (CFE): Local business tax, variable by commune — typically €200–1,500/year
- Annual accounts publication: Required at the greffe — €100–200/year
A French SAS with zero employees and modest activity still costs €4,000–8,000/year in compliance and accounting alone.
The Hidden Administrative Burden
Beyond the direct financial costs, creating a French entity introduces an ongoing administrative overhead that shouldn't be underestimated:
- Président (legal director) responsibility: Someone must be formally named and legally responsible. If that person is abroad, coordination adds friction.
- URSSAF obligations: Even without employees, there are social declaration requirements for the company's dirigeant.
- Time to operational: From decision to first commercial invoice — typically 4–8 weeks minimum.
- Annual shareholders' meetings: SAS requires formal decision-making processes, even for a single-shareholder entity.
Total Year-1 Cost Estimate
When It Actually Makes Sense
The French entity cost is not prohibitive — it's a reasonable operating cost for a growing market. The question is timing.
Create the entity when:
- You have at least €150,000–200,000 in annual French revenue or contracted pipeline
- You need to hire French employees directly (not possible without entity)
- A key client or partner requires a local entity in contractual terms
- You're bidding on public sector or EU-funded contracts
Don't create the entity yet when:
- You're still validating product-market fit in France
- Your French ARR is under €100,000
- You can operate via portage salarial or cross-border invoicing
- You haven't yet identified your ideal French client profile
Spend €3,000 on a GTM Sprint first. If it works, the entity creation cost pays for itself in the first month of revenue. If it doesn't, you've saved €50,000+ in sunk infrastructure costs.