Forms of Branch Offices in France
dependent branch office without commercial functions
This form of branch office evokes the lowest costs at the foundation or winding-up. However, the record into the Companies’ Register is mandatory in principle according to model of Austrian social regulations. The representative office uses to be selected to prevent from taxation in France (income tax-free). Disadvantages consist in missing competence to conclude the contracts or to issue the invoices, and only certain preparatory and assistant activities are allowed (e.g. free leaflet of promotion materials).
The France-Austrian Agreement on prevention from double taxation (DBA) is unclear in defining the limiting criterion.
dependent, but taxable branch office with commercial functions
Advantages insist in greater commercial freedom, because it can directly and separately conclude the contracts with clients, and issue the invoices in place. However, the separate accountancy and separate organization is needed. The branch office is tax-liable (établissement stable) owing to its accountable activity in France. Therewith the difference against independent company is not essential any more; even the tax and liability disadvantages can occur (liability of Austrian company, difficulties in limitation of result set-off between Austria and France).
Due to tax reasons, most often the legal forms of limited company (SARL) and joint stock company (SA) are taken into consideration. The public company (SNC) and the limited partnership are rare and the limited company, Ltd.& Co KG does not exist within the French law order.
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