Can a Foreign Company Sell in France Without a French Subsidiary? VAT, Permanent Establishment and Contract Risks

A foreign company can often sell goods or services to French customers without incorporating a French subsidiary. A business does not become a French company merely because its customers are in France, its website is available in French or its invoices are paid in euros.

That answer changes, however, when the question becomes what the business must register, declare, pay or organise in France. Trading without a subsidiary does not necessarily mean trading without French obligations. A foreign seller may need a French VAT number, a particular customs arrangement, suitable contractual terms or employer registration. Its operations may also create a taxable permanent establishment even though nobody has applied to register a branch.

The distinction matters before the first substantial contract. A British manufacturer supplying French retailers, an Irish software company selling subscriptions, an American brand holding stock near Lyon and a Swiss consultancy sending personnel to French clients do not present the same legal or tax profile. Their turnover alone cannot decide how they should operate.

The practical question is therefore how the business reaches the French market: who contracts, where goods are stored, who performs the work, who negotiates, who bears the commercial risks and which entity receives payment. Once those facts are established, it becomes possible to decide whether direct cross-border trading remains appropriate or whether a branch or subsidiary offers a better framework.

This article examines ordinary commercial activities. Regulated professions, financial services, insurance, transport, healthcare and other regulated sectors require additional analysis. The legal references below reflect the framework examined on 24 October 2026; the applicable tax treaty and the rules in force when transactions occur must always be checked.

I. Selling to French customers does not automatically require a French company, but obligations can arise before any formal establishment

A. Direct cross-border trading is a genuine business model, provided that the commercial arrangements match the legal position

The seller can remain the foreign company

There is no general rule that every business selling to France must first create a French legal entity. In an ordinary cross-border transaction, the contracting party can remain the company incorporated abroad. It issues the invoice, assumes the contractual obligations and receives the purchase price.

Consider a manufacturer established in Italy that accepts an order from a French industrial customer and ships the goods from Italy. Nothing in that description, by itself, requires the manufacturer to incorporate a French subsidiary. The transaction nevertheless raises questions about VAT, delivery, conformity, payment and the applicable sales law.

Similarly, a consultancy based in Ireland may deliver advice remotely to a French business. Its French customer does not automatically turn the consultancy into a French establishment. But the answer may differ if the consultancy places a permanent team at the customer's premises, sends personnel repeatedly to perform the core service in France or relies on a French representative to conclude its contracts.

The same company may consequently begin with a straightforward export model and later move into an operational model that requires registration or a different structure. The legal assessment should follow that development. A conclusion reached when the business had one French customer may cease to be reliable after a warehouse, local team and service operation have been added.

The first document to review is often the actual contract or order process. It should identify the seller by its correct legal name, registration details and address. A trading name used on a French website must not obscure which company is responsible. The customer should be able to distinguish a branch, a subsidiary, an independent distributor and the foreign supplier itself.

Incorporation, branch registration and tax registration answer different questions

A subsidiary is a separate company. A branch is part of the foreign company. A VAT registration is a tax identification. These are different legal instruments, even where they all generate French administrative numbers.

A subsidiary normally has its own assets, contracts, accounts and liabilities. Its shareholder may be a foreign company, but that ownership does not remove the subsidiary's separate legal personality. A branch, by contrast, has no separate legal personality from its foreign head office. Obligations undertaken through it are obligations of the foreign company.

A non-established foreign business may also have French tax identification without having incorporated a subsidiary. Administrative identification must not be mistaken for proof that a separate French company exists. Nor should a French VAT number be presented as proof that all the business's activities are taxable in France for corporate income tax purposes.

An operational establishment can require commercial registration even though the company intends to remain incorporated abroad. The relevant registration requirements depend on the establishment actually opened and the activity carried out. Failing to complete the formalities does not prevent the authorities from examining the activity that exists in fact.

For management purposes, it is useful to ask four separate questions. What is the legal identity of the seller? Does it operate a registrable establishment in France? What transactions require French tax identification or reporting? Does its activity fall within French corporate taxation, subject to any applicable treaty?

Confusion between those questions can produce expensive mistakes. A business may create a subsidiary when a limited tax registration would have been sufficient. Another may obtain a VAT number and wrongly assume that its permanent-establishment exposure has thereby been approved. Neither conclusion follows from the registration itself.

A French customer may request a local supplier for commercial reasons

Sometimes the pressure to create a French subsidiary comes from the customer rather than the law. A procurement department may prefer a French supplier, a French bank account, a domestic invoicing workflow or a local entity that can sign a framework agreement.

That commercial preference deserves attention, but it should be identified accurately. A customer's internal onboarding system is not a statement of French law. The appropriate response may be to explain the foreign supplier's legal identity and VAT treatment, adapt the documentation or negotiate a workable onboarding arrangement.

In other cases, the customer's preference may justify incorporation. A group seeking a long-term French presence may decide that a local entity improves tender access, customer confidence, staffing and after-sales support. The point is to make that decision deliberately, after comparing its commercial benefits with its governance, accounting and tax consequences.

It is particularly risky to insert a newly incorporated subsidiary into an existing contract merely to satisfy an invoicing request. The company issuing the invoice should be the entity legally entitled to the price. A change of supplier may require contractual consent, assignment, novation or a new agreement, depending on the governing law and the contract.

The same caution applies to bank details. Payment to a group treasury account or a collection agent should rest on a clear legal arrangement. Otherwise, the customer may be uncertain whether payment discharges its debt, while the group's accounting fails to reflect which entity actually earned the revenue.

A distributor buys and resells; an agent acts for a principal

A foreign supplier can enter the French market through an independent distributor. In the ordinary model, the distributor buys goods in its own name and resells them to its customers. It earns a resale margin and bears the commercial risks allocated to it by the agreement.

A commercial agent performs a different function. Under the French statutory framework, an independent agent is engaged on a continuing basis to negotiate and, where applicable, conclude transactions in the name and on behalf of a principal. The relationship can fall within the protective regime of Articles L. 134-1 and following of the French Commercial Code. The statutory definition should be examined against the actual activities, not simply the heading on the agreement. [1]

Calling someone a consultant, sales partner or introducer does not settle the issue. An individual who merely passes on occasional contact details is not in the same position as a representative who develops accounts, negotiates terms and manages the supplier's customer relationships over several years.

Classification has consequences beyond commission. A qualifying commercial agent may have statutory rights on termination, including compensation under Article L. 134-12, subject to the applicable exceptions and procedural requirements. A foreign-law clause should not be assumed to neutralise every mandatory protection associated with activities in the European Union. [2]

The tax classification is a separate question. An intermediary's status as a commercial agent does not automatically determine whether it creates a dependent-agent permanent establishment. The treaty test requires its own assessment of authority, independence and actual conduct.

For that reason, a distribution or representation agreement should be reviewed from both sides. Commercial law examines the rights and liabilities between the parties. Tax law examines what the intermediary does for the foreign enterprise and whether that activity connects the enterprise sufficiently to France.

Exclusivity is a business choice with legal consequences

Exclusivity can encourage a French distributor to invest in a brand, hire staff and develop customers. It can also create dependence, reduce the supplier's flexibility and complicate later changes to the sales model.

The agreement should explain what is exclusive: a territory, a customer category, a sales channel or particular products. It should also address performance targets, existing customers, direct sales, online enquiries, access to customer information and the treatment of orders placed outside the allocated territory.

Competition law requires a separate review of restrictions such as resale price maintenance and certain limitations on territorial or online sales. A supplier should not infer that all restrictions are lawful merely because the distributor accepted them or because both parties are businesses.

The tax analysis should likewise reflect the distributor's practical independence. A reseller that buys on its own account, organises its business and bears genuine commercial risk is different from an intermediary whose supposed resale activity conceals the foreign company's direct dealings with French customers.

There is no useful shortcut in the word independent. It must describe the relationship in practice. Pricing decisions, inventory exposure, authority to negotiate, financial dependence and operational control all deserve attention, although their precise legal significance depends on the rule being applied.

A foreign-law clause does not answer every French-law question

International business contracts frequently select English, Irish, Swiss or another foreign law. Within the scope of the Rome I Regulation, contractual choice of law is generally recognised. That does not make the choice an exemption from all rules connected with France. Consumer protections and overriding mandatory provisions require separate consideration. [3]

The contract's governing law must also be distinguished from its jurisdiction clause. Selecting English law does not, by itself, select the English courts. Selecting a French court does not, by itself, make every contractual issue subject to French substantive law.

Under the Brussels I bis Regulation, jurisdiction agreements selecting the courts of a Member State can be effective where the relevant conditions are met. Other jurisdictional rules may become relevant where there is no effective agreement, including rules concerning the place of performance. The analysis differs for arbitration and for courts outside that framework. [4]

A supplier should therefore address both governing law and dispute resolution before accepting the first purchase order. It should also consider enforcement: a favourable judgment has limited practical value if it is obtained in a forum from which recognition and recovery are unnecessarily difficult.

The practical problem often appears through competing standard terms. The foreign supplier sends its general conditions with the quotation. The French customer sends a purchase order referring to its purchasing conditions. Both documents contain governing-law and jurisdiction clauses. Work begins without anybody resolving the conflict.

The resulting dispute concerns more than the interpretation of a sentence. It may concern whether a particular set of terms became part of the contract at all. The order process should therefore preserve evidence of the agreed terms and identify which document prevails when contractual documents conflict.

International sales law may apply without being named

Sales of goods may fall within the United Nations Convention on Contracts for the International Sale of Goods, generally known as the CISG. France is a contracting State. Whether the Convention applies depends on its scope, the parties' places of business, the relevant conflict-of-laws analysis and any effective exclusion. [5]

Choosing French law is not necessarily the same as choosing only the domestic sales provisions of the French Civil Code. The CISG can form part of the applicable French law for an international sale. Conversely, the Convention does not govern every issue associated with a transaction: its scope and exclusions must be respected.

This matters for formation, delivery obligations, conformity, notice of defects and remedies. A supplier using a domestic template may assume that familiar home-country rules govern a cross-border sale when another framework applies.

The agreement should state the intended position clearly. It should also address matters that a general choice-of-law clause cannot resolve operationally: product specifications, inspection procedures, acceptance, notification of defects, delivery evidence and the allocation of transport risks.

Incoterms can assist with the delivery and risk allocation if the chosen term, place and edition are specified. They do not replace the sales contract, determine every VAT consequence or automatically settle ownership, payment and jurisdiction. A delivery term should be chosen with the actual customs and logistics arrangements in mind.

Consumer sales require a distinct contractual approach

A website that deliberately targets French consumers presents different issues from a negotiated supply agreement between two businesses. The seller must examine the consumer information, withdrawal, guarantee and other mandatory rules applicable to its activities.

A foreign-law clause cannot be relied upon to deprive a protected consumer of mandatory rights preserved by the relevant conflict-of-laws framework. The fact that the seller has no subsidiary in France does not remove the need to assess those rights.

In practical terms, the business should review the purchase journey as a whole: product description, total price, delivery costs, ordering process, payment confirmation, cancellation arrangements, complaints and after-sales service. Terms that are technically comprehensive but inaccessible before purchase do not solve the contractual problem.

The French-language version also requires care. A translation that changes warranty language, misstates delivery commitments or promises a service unavailable in France can create liability independently of tax issues. Where language requirements apply, an English-only template may be insufficient.

Product regulation may add further obligations. Depending on the goods and the supply chain, the business may need to identify the relevant manufacturer, importer, authorised representative or other responsible economic operator. A customs representative, VAT representative and product-compliance representative perform different functions; appointing one does not automatically appoint the others.

The relationship's exit terms should be considered at entry

A supplier entering France often concentrates on winning the first customers. Yet the legal cost of ending a relationship may depend on how that relationship develops from the outset.

Article L. 442-1, II of the French Commercial Code addresses abrupt termination of an established commercial relationship. Where the provision applies, a termination clause is not necessarily the complete answer to the notice question. In an international dispute, its application requires analysis of the relevant facts, conflict-of-laws rules and jurisdiction. [6]

It would be equally misleading to say that every French customer creates a mandatory French termination claim or that a foreign-law clause always prevents one. The relationship must be characterised and the applicable legal framework established.

Commercial agency raises a distinct termination regime. Distribution, service provision and agency should not be collapsed into a single rule. The supplier needs to know which relationship it has actually created before estimating the cost of changing the route to market.

Contemporaneous records help. The parties should document investment commitments, forecasts, minimum purchases, duration, renewal arrangements and any agreed transition process. Informal assurances made by sales personnel can otherwise become central evidence when a long relationship ends.

B. VAT, customs and reporting follow the transactions, even where no subsidiary exists

Start with the transaction rather than the country of incorporation

The VAT analysis begins by identifying what is supplied, where the supply is located, who receives it and who must account for the tax. The seller's incorporation abroad is one part of that analysis, not the entire answer.

Goods and services follow different territorial rules. Business-to-business and consumer transactions may follow different rules. A supply dispatched from another Member State differs from a sale of goods already held in France, and both differ from an import from outside the European Union.

The same foreign company can therefore have several VAT treatments within one French sales channel. Its software subscriptions, installation services, replacement parts and local stock movements may require different analysis. A single rule in the accounting software is unlikely to be sufficient if the underlying transactions differ.

The practical starting point is a transaction map. For each material flow, identify the seller, customer, customer status, departure and destination of goods, location of services where relevant, invoice issuer and party responsible for importation. That map should be reviewed when the business changes its fulfilment model.

For a supplier, the resulting question is not merely whether French VAT exists. It is whether the supplier must charge it, whether the customer accounts for it, whether a special scheme applies and what registration or reporting remains necessary.

General B2B services often use reverse charge

For services falling within the general B2B rule, the VAT place of supply is ordinarily linked to the business customer, subject to the relevant establishment analysis. Where a non-established supplier provides such services to a qualifying French business customer, the customer will commonly account for the French VAT through reverse charge. Articles 44 and 196 of the VAT Directive provide the European framework. [7]

Reverse charge changes the person accounting for VAT. It does not mean that the transaction is outside VAT, that it is exempt or that every service sold to a French business has the same treatment.

Consider an Irish consultancy advising a French manufacturing company remotely. If the ordinary B2B service rule applies and the relevant conditions are satisfied, the French customer normally accounts for the tax. The Irish supplier should nevertheless verify the customer's business status and use an appropriate invoice.

Different questions arise for services connected with immovable property, admission to certain events and other services governed by special rules. The fact that the customer supplies a VAT number does not eliminate those distinctions.

A mixed contract should be analysed carefully. Installation, maintenance, software access and physical equipment may constitute separate supplies or require a combined assessment. The contractual description must reflect what is actually provided rather than using a convenient label to obtain a preferred tax result.

Sales of goods require a logistics-based analysis

For goods, the physical movement is often decisive. A shipment from an Italian factory to a French VAT-identified business is not the same transaction as a sale from the supplier's French warehouse to that customer.

In a qualifying intra-Community supply, the supplier's treatment in the departure State and the customer's acquisition in the destination State are coordinated under the EU VAT framework. The treatment depends on the statutory conditions, including evidence relevant to the cross-border movement and the parties' status.

It is therefore unsafe to treat every invoice issued abroad to a French business as an intra-Community supply. The goods may already be in France, may never leave their departure State or may be delivered as part of a chain transaction in which the transport must be attributed to a particular supply.

A three-party sale deserves particular attention. If a supplier in one country purchases goods from a manufacturer in another and arranges direct delivery to a French customer, the invoice chain and physical movement do not necessarily coincide. The company needs to establish which supply carries the transport and whether a simplification is available.

Returns create further complexity. Goods returned to a French warehouse, resold locally or transferred to another Member State may produce obligations that did not arise on the original sale. The tax configuration should cover those flows before a large volume of returns accumulates.

Local stock can create obligations even without local staff

A foreign seller may keep stock in France through an independent logistics provider. That arrangement can be commercially attractive: delivery is faster, returns are easier and customers receive goods from a local location.

The VAT consequences must be examined independently of the permanent-establishment question. Moving the company's own goods into France, importing them there or making supplies from French stock may create French identification and reporting obligations, subject to the applicable rules and simplifications.

It does not follow that the company must charge French VAT on every subsequent sale. Under Article 283 of the French General Tax Code, reverse charge can apply to certain domestic supplies made by a supplier established outside France to a customer acting as a taxable person and identified for VAT in France. The particular supply and establishment position must be checked. [8]

The distinction is practical. A supplier can need French VAT identification because of stock movements or imports while issuing some French domestic sales invoices without collecting the VAT itself. Registering and collecting are separate questions.

An American seller using a French fulfilment warehouse should consequently avoid two opposite assumptions: that the warehouse necessarily creates a corporate-tax permanent establishment, and that the absence of its own employees means no French tax compliance is required.

The logistics agreement should make the facts visible. Who owns the goods at each stage? Who decides where they are stored? Who can access the premises? Who handles returns and repairs? Can the provider move the stock across borders? Those answers support both VAT compliance and the separate permanent-establishment assessment.

A marketplace's role must be examined transaction by transaction

Selling through an online marketplace does not automatically transfer every legal and tax obligation to the platform. In defined VAT situations, a platform may be treated as a deemed supplier. In others, the foreign seller remains responsible for the supply and associated compliance.

The seller should obtain a precise explanation of the platform's role. Does it merely facilitate the sale, collect payment, buy and resell, arrange transport or act as deemed supplier under a particular VAT provision? Different answers can coexist across countries and product flows.

The platform's reports should be reconciled with the seller's own records. Gross sales, platform fees, returns, shipping charges and net settlements are not interchangeable figures. Treating the amount transferred to the seller's bank account as its complete sales record can conceal the actual taxable transactions.

Stock movements deserve separate monitoring. A fulfilment programme may relocate goods to another Member State to improve delivery. The business should understand and control those movements because they can change its compliance requirements without any change to the location of its directors or registered office.

The contract should also preserve access to transaction data if the account is suspended or terminated. A tax audit may occur after the commercial relationship with the platform has ended. The business still needs the evidence required to explain its historic sales and stock movements.

OSS simplifies reporting for covered transactions, not every European obligation

The One Stop Shop mechanisms can simplify VAT reporting for eligible transactions, particularly certain consumer supplies. Their scope depends on the scheme and the transaction. The Union OSS, non-Union OSS and Import One Stop Shop should not be treated as a single universal registration.

A business must establish which scheme it can use and which supplies are covered. Ordinary domestic sales from local stock, transfers of own goods and imports may require treatment outside the scheme used for other sales. Reporting consumer distance sales through OSS does not automatically solve all obligations associated with a French warehouse.

The frequently mentioned EUR 10,000 threshold is also not a general exemption for every foreign seller. It belongs to defined EU rules and conditions; a non-EU business should not assume that it can make French consumer sales below that amount without destination-country VAT consequences.

The correct sequence is to classify the supplies first, identify the applicable territorial rule and then consider whether a special scheme can discharge the relevant reporting obligations. Starting with a preferred scheme and forcing all transactions into it reverses that analysis.

For growing businesses, a periodic reconciliation between OSS declarations, national VAT returns, customs records and the sales ledger is useful. Differences may result from timing or refunds, but they may also reveal that a transaction has been reported twice or omitted from both systems.

Importation adds customs responsibilities to the VAT analysis

Goods arriving from outside the European Union require customs analysis as well as VAT analysis. The parties should identify the importer and declarant, the customs representation used, the relevant registrations, tariff classification, origin and valuation.

The place where importation occurs can affect the subsequent transaction chain. Goods released into free circulation in another Member State and then moved to France do not follow exactly the same administrative route as goods imported directly into France.

A delivery promise such as delivery duty paid can expose the seller to responsibilities it has not organised. The commercial term should be checked against the seller's practical ability to complete the import process and account for the relevant taxes. A logistics provider's willingness to transport the goods does not resolve every legal issue.

Import VAT recovery also requires care. The business should verify that the entity seeking deduction has the necessary legal entitlement and supporting documentation. Paying a courier's invoice is not, by itself, a complete analysis of who imported the goods or who can deduct the VAT.

The contract should allocate responsibility for inaccurate product information, missing origin evidence, customs inspections, storage costs, rejected deliveries and returns. Without those provisions, a disagreement over an apparently minor delivery detail can interrupt the entire French sales channel.

Customs representation should not be confused with fiscal representation. The former concerns customs procedures and the representative's particular mandate. The latter concerns specified tax obligations. Their responsibilities and liability regimes must be examined separately.

Fiscal representation depends on the seller's circumstances

For a non-EU business carrying out relevant taxable operations in France, the question of fiscal representation must be checked under the applicable French rules, including the exceptions connected with administrative-assistance arrangements. It is inaccurate to state that every non-EU supplier must appoint a fiscal representative in every case.

The need for representation depends on matters including the country of establishment, the transactions concerned and the applicable statutory exception. Businesses established in the European Union are not placed under the same representation requirement as businesses to which the non-EU requirement applies.

A fiscal representative, where required, does not become the seller's subsidiary. Nor does the appointment itself establish that the foreign enterprise has a corporate-tax permanent establishment. The representative's mandate and potential liability should be understood before the appointment is made.

In practice, the company should clarify who files returns, who controls payment, who receives notices, who keeps the records and who handles an audit. A contract that only promises to obtain a VAT number may leave the ongoing obligations insufficiently addressed.

The French tax administration maintains a specific framework for foreign businesses, including the Foreign Business Tax Department, or SIEE, for matters within its remit. The competent office nevertheless depends on the activity and establishment position. [9]

VAT establishment is not the same as corporate-tax establishment

EU VAT law uses the concept of a fixed establishment. Corporate income tax treaties generally use permanent establishment. Both are often translated into French as établissement stable, which can obscure the fact that their tests and functions differ.

Article 11 of Implementing Regulation No 282/2011 refers to sufficient permanence and an appropriate structure of human and technical resources for the relevant VAT function. It also expressly provides that possession of a VAT identification number is not, on its own, sufficient to establish a fixed establishment. [10]

The Court of Justice's judgment of 7 April 2022 in Berlin Chemie, C-333/20, illustrates the need to examine the actual resources and their use. The presence of a subsidiary providing services does not automatically mean that the foreign recipient has a fixed establishment available to receive those services. [11]

The judgment of 29 June 2023 in Cabot Plastics Belgium, C-232/22, likewise addresses the position of a foreign recipient using a local service provider. The analysis cannot be reduced to the existence of an exclusive service contract or a commercially important local supplier. [12]

These authorities do not justify a blanket conclusion that outsourcing can never create VAT establishment questions. They require careful examination of who has the relevant resources at its disposal and how those resources are used. A corporate structure chart alone is insufficient.

The practical consequence is that the company should receive separate conclusions on corporate income tax and VAT. A report that merely states no permanent establishment without explaining which tax and which legal test it addresses leaves an important ambiguity.

Electronic invoicing and e-reporting require a separate scope review

France's electronic invoicing reform creates another reason to distinguish establishment from registration. The obligation to exchange electronic invoices within the domestic framework and the obligation to transmit transaction or payment data do not have identical scopes.

The French tax administration has published specific guidance on e-reporting for foreign companies without a permanent establishment in France. A non-established company should therefore not assume that its absence of a subsidiary, or its use of invoices issued abroad, excludes it from all data-transmission obligations. [13]

The review should identify the transactions concerned, whether the foreign supplier or another party is liable for the VAT, any exclusion or special scheme, the applicable implementation date and the required transmission channel. A French VAT number alone is not a complete answer to those questions.

This is also a systems issue. Customer status, transaction type, payment information and tax treatment may be held in different applications. The company must be able to produce consistent data and correct it when orders are cancelled, prices are adjusted or goods are returned.

A software provider can implement a reporting decision, but it cannot safely determine that decision from an address field alone. The legal classification of the transactions should precede configuration of the invoicing system.

French VAT provisions are also undergoing codification changes. References to the General Tax Code in this article concern the rules examined for October 2026; the relevant provisions and cross-references should be checked again for transactions falling after the scheduled changes. A reference marked for future repeal should not be read as if it had already ceased to govern current transactions. [8]

A workable VAT review produces an operational result

The useful output of a VAT analysis is a set of instructions that the business can actually apply. Each material transaction type should have a defined invoice treatment, required evidence, declaration route and responsible person.

For example, the business should know how to invoice a French VAT-identified corporate customer purchasing goods from French stock, a consumer purchasing from another Member State and a customer receiving goods imported from outside the EU. Those transactions should not be collapsed into one French sales category.

The review should also explain what happens when information is missing. If a customer supplies no usable VAT identification, the sales team needs a process for resolving the issue before the invoice is finalised. If goods are diverted to another destination, the logistics team must notify the person responsible for tax reporting.

This coordination is often more important than the initial registration. A company can possess the correct VAT number and still issue systematically incorrect invoices because its sales, logistics and accounting teams work from different descriptions of the transaction.

II. A growing French operation can create taxable presence and contractual exposure before management decides to establish locally

A. Permanent establishment depends on the actual business activity and the applicable treaty

Begin with French domestic law, then examine treaty protection

The corporate-tax analysis should not start and end with a generic definition copied from an international model. French domestic law establishes the basis on which France seeks to tax profits. An applicable treaty may then restrict that taxing right.

Article 209, I of the French General Tax Code provides the principal territorial framework for corporate income tax. Administrative guidance examines activities carried out through an establishment, a dependent representative and, in appropriate circumstances, a complete commercial cycle in France. [14]

The complete-commercial-cycle concept is particularly important where a business assumes that no office means no French taxation. Under the domestic analysis, a habitual commercial activity may raise French tax issues even without the kind of fixed place imagined by management. Treaty protection must then be examined where available.

For ordinary business profits under many tax treaties, the decisive question is whether the foreign enterprise has a permanent establishment in France and which profits are attributable to it. But the company must first be entitled to rely on that treaty, and the relevant income must fall within the provision being invoked.

Not every receipt is necessarily an ordinary business profit. Royalties, immovable-property income and other categories can have separate treaty treatment. Domestic withholding provisions may also require analysis before treaty relief is applied. A company should not use the absence of a permanent establishment as a universal answer to every French-source payment.

The treaty itself must be read in its applicable version, including protocols and any effective modifications by the Multilateral Instrument. Definitions, exceptions, agency wording and project thresholds differ. The company's country of incorporation is therefore not a minor administrative detail; it can change the legal test.

Treaty entitlement can be difficult for transparent entities

An overseas business described as a company may not be treated as an ordinary opaque corporation in every jurisdiction. Partnerships, certain limited liability companies and other fiscally transparent or hybrid entities require particular care.

The question is not merely whether the entity has a registration certificate. It is who is treated as earning the income, where that person is tax-resident and how the applicable treaty addresses the entity and its owners. The result can differ between income categories and between jurisdictions.

A US LLC, for example, should not automatically be analysed as if every LLC had identical treaty status. Its tax treatment, elections, ownership and the relevant treaty provisions need to be established. The same caution applies to partnerships and other structures encountered in cross-border professional services.

The practical documents may include tax residence evidence, ownership information, organisational documents and an explanation of the entity's tax treatment in its home jurisdiction. Without them, an adviser cannot reliably determine whether the assumed treaty protection is available.

This does not mean that a transparent structure cannot trade with France. It means that the tax analysis must identify the correct taxpayer and treaty claimant before applying the permanent-establishment provisions.

A fixed place of business requires a factual assessment

Under the familiar treaty model, a permanent establishment may arise from a fixed place of business through which the enterprise's activity is carried on wholly or partly. The details depend on the applicable treaty and its interpretation.

An office, workshop or operational facility may present an obvious case. More difficult situations concern space at a customer's premises, a serviced office, a home office, a warehouse or premises operated by another group company.

The analysis examines whether there is a sufficiently identifiable place, whether it has the necessary permanence, whether it is available to the enterprise in the relevant sense and what business activity is carried on there. Ownership of the premises is not the sole criterion.

Equally, occasional access does not necessarily mean that premises are at the enterprise's disposal. A representative attending a meeting at a customer's office is not automatically in the same position as a team using a dedicated work area there continuously to perform the company's principal service.

Documents and conduct should be compared. A contract describing a temporary visit may be contradicted by access badges, a dedicated room, a regular rota, equipment kept on site and a long series of renewed assignments. Those facts do not replace the legal test, but they provide the evidence to which it is applied.

The business should therefore record the purpose, duration and organisation of its French activities. If the actual arrangement changes, the original memorandum should be revisited rather than treated as permanent clearance.

There is no universal turnover threshold for permanent establishment

Foreign businesses often ask how much they can sell in France before a permanent establishment arises. There is no universal revenue threshold that answers that question across all treaties and business models.

A company may generate substantial French customer revenue while performing its activities abroad and having no relevant French establishment. Another may have modest turnover but operate a fixed business location or dependent representative in France.

Specific tax regimes can contain turnover thresholds, but those thresholds should not be imported into the permanent-establishment analysis. A VAT threshold, a small-business reporting rule and a treaty project-duration threshold address different matters.

The same caution applies to the number of customers. One substantial French client can involve a deeply embedded local operation. Numerous French customers can be served entirely from abroad. The number is evidence of the business model, not a legal classification by itself.

Management should therefore measure the factors that matter: local personnel, premises, authority, duration, functions and decision-making. Revenue remains relevant commercially and for certain tax obligations, but it cannot substitute for those facts.

Warehousing exemptions must be checked against the treaty and the activity

Some treaties contain exceptions for specified storage, display, delivery or other activities. Their wording and conditions vary, including the relevance of a preparatory or auxiliary character and anti-fragmentation provisions.

A seller should not assume that every warehouse is exempt. Nor should it assume that every stock location necessarily constitutes a permanent establishment. The analysis must establish what facilities are available to the enterprise and what functions are actually carried on there.

Simple storage by an independent provider differs from a location combining fulfilment, returns assessment, repairs, product customisation and customer service. Those additional functions can change the significance of the operation within the enterprise's business.

Fragmentation is another concern. Activities spread between related entities or nearby locations may need to be considered together under applicable treaty provisions. Splitting functions on paper does not necessarily preserve an exception if the relevant rules require examination of the combined operation.

The logistics agreement is therefore only the beginning of the review. Operating manuals, service-level commitments, employee instructions and the actual handling of goods can explain whether the arrangement remains within the assumed limits.

For a foreign online retailer, this review should occur before transferring its entire French fulfilment operation to a local site. The commercial decision can be difficult to reverse once inventory, customer delivery promises and returns procedures depend on that location.

Negotiating authority may matter even when contracts are signed abroad

A dependent-agent permanent establishment can arise under treaty provisions dealing with a person acting for the foreign enterprise. The precise test depends on the treaty, including whether and how it addresses contract conclusion or a principal role leading to contracts routinely concluded without material modification.

The location of the final signature is therefore not a reliable stand-alone safeguard. A French sales team may determine the essential commercial terms while headquarters abroad performs only a formal approval. The facts must be tested against the treaty actually applicable.

The Conseil d'État's decision of 11 December 2020, no. 420174, in Conversant International illustrates this substantive approach. In applying the treaty then at issue, the court examined the role of the French company in deciding transactions that the foreign enterprise merely ratified in practice. The lesson is not that every sales-support team creates a permanent establishment, but that formal signing authority cannot be assessed in isolation. [15]

That distinction affects everyday sales practices. Who sets the price? Who can offer discounts? Who agrees implementation dates, scope and liability? Does headquarters genuinely review and sometimes alter the proposed bargain? Or does it systematically approve what the French representative has already settled?

Internal delegation documents should reflect the answers. A policy stating that the French team cannot bind the company has limited evidential value if emails, quotations and customer communications show that the team regularly determines the commercial agreement.

The objective is not to manufacture an artificial approval chain. It is to organise the business coherently and understand the tax consequences of the authority actually exercised.

An independent intermediary must be independent in the relevant sense

Many treaty frameworks distinguish an independent agent acting in the ordinary course of its business from a dependent representative. The conditions and any limitations relating to closely related enterprises must be checked under the applicable treaty.

The analysis is not decided simply by the representative's self-employed status under domestic law. A separate company can still perform functions that require scrutiny under the agency provisions. Conversely, the use of a genuine independent distributor does not automatically attribute its entire business presence to the supplier.

Contracts, economic arrangements and actual conduct all matter. Does the intermediary act for several clients? Who bears the risk of unsuccessful business development? What instructions does the supplier give? Does the intermediary negotiate the supplier's contracts or buy and resell on its own account?

No single answer should be turned into a universal test. A distributor's exclusivity may be commercially understandable, while a consultant's list of other customers may not resolve what it does for the enterprise being analysed.

The practical recommendation is to select the relationship that fits the commercial objective and then assess its consequences. A supplier that wants tight control over negotiations, pricing and customer commitments should not assume that the same arrangement will necessarily support a strong independence argument.

Employees and contractors create different obligations, but both can affect taxable presence

A foreign company can, in appropriate circumstances, employ someone working in France without first incorporating a French subsidiary. That does not remove employer-registration, payroll, social-security or mandatory employment-law questions.

The employee's function also matters for permanent establishment. A technical specialist working remotely for personal reasons presents a different factual pattern from a sales director whose role is to establish and manage the French market. The applicable treaty analysis must reflect the actual duties and organisation.

Using a contractor instead of an employee is not a universal solution. Employment classification depends on the real relationship, and the tax analysis examines what the person does for the business. A contractor who habitually negotiates the company's French deals can raise agency questions even where the engagement is described as freelance consultancy.

An employer-of-record arrangement similarly addresses only part of the problem. It may organise employment administration, but it does not automatically determine where the client company carries on its own business or whether the individual's functions create a taxable presence for that company.

Before hiring, the business should align the job description, authority, work location and commercial reporting lines. It should also identify the documents needed to support the applicable social-security position and any posting arrangement. A tax treaty does not resolve social-security affiliation.

Where personnel travel regularly to France, the review should cover the sequence of assignments rather than each trip in isolation. Immigration, posting, employment, social-security and permanent-establishment rules have different conditions. There is no general business-travel safe harbour that settles all of them.

A founder managing the business from France creates an additional issue

A foreign company may have no formal French office while its founder or principal director lives in France and runs the enterprise from there. That situation requires a broader analysis than the presence of a salesperson.

Where are strategy, banking, commercial commitments and operational decisions actually made? Who has the authority to decide them? Are overseas board meetings substantive, or do they record decisions already taken in France?

Depending on the facts and applicable rules, questions of management location, corporate residence and permanent establishment can arise. The relevant treaty may contain a mechanism for resolving dual residence, and that mechanism should not be assumed to operate automatically or identically across treaties.

The individual's own residence, remuneration and dividends also require separate examination. Incorporating abroad does not, by itself, determine the personal taxation of a founder living and working in France.

This is particularly important for owner-managed consulting and digital businesses. Their principal assets may be the founder's expertise and relationships. If the founder relocates and performs the entire business from France, an overseas registered address may say little about the location of the actual activity.

A meaningful review therefore considers both the company and the individual. Attempting to settle only the company's invoicing address leaves the main questions unanswered.

A permanent establishment is not a second company

When a foreign enterprise has a permanent establishment, the establishment is generally a tax concept within the same legal enterprise. It should not be confused with the creation of a separate subsidiary.

The resulting corporate-tax task is to determine the profits attributable to the French activity under the applicable framework. French customer revenue is not automatically identical to French taxable profit, and the profit attributable to a local operation is not necessarily the amount management chooses to record there.

Functions performed, assets used and risks assumed become important. The business must explain how its French activity contributes to the revenue and how relevant expenses are allocated. Transfer-pricing principles and treaty rules may require analysis of dealings between the establishment and the rest of the enterprise.

The evidence needs to be specific. General industry margins or a group-wide profitability figure may not establish the costs and functions of the French activity. This difficulty is magnified if the business has never kept records capable of identifying that activity.

The later Conversant litigation illustrates the practical importance of evidence. In its decision of 4 April 2025, no. 461220, the Conseil d'État examined issues including the reconstruction of profits and proof concerning expenses in the procedural circumstances of the case. The decision reinforces the need for contemporaneous records; it does not prescribe a universal taxable margin for foreign businesses. [16]

Keeping relevant records is therefore worthwhile even where the company reasonably concludes that it has no permanent establishment. If the factual or legal assessment changes, those records can help explain the activity and quantify the consequences.

Historic exposure should be examined before changing the structure

Discovering a possible French establishment does not mean that immediate incorporation will erase the past. A new subsidiary generally changes future arrangements. It does not automatically replace the foreign company as taxpayer or contracting party for earlier years.

The initial review should establish when the relevant activities began and how they evolved. The first sale, first stock transfer, first local hire and first exercise of negotiating authority may have different dates. Those dates can matter for different obligations.

The business should preserve evidence before reorganising. Emails, contracts, expense records, travel schedules, warehouse reports and delegation documents may be needed to reconstruct the position. A rushed operational transfer can make that evidence harder to locate.

The response should then distinguish future compliance from the treatment of the historic period. Depending on the facts, it may involve registration, corrective filings, discussions with the administration or a defence of the existing position. Interest, penalties, assessment periods and available remedies require their own review.

There is no responsible universal promise that voluntary action removes every sanction. There is equally no reason to assume that every uncertain arrangement inevitably results in the harshest assessment. The factual record, applicable law, taxpayer conduct and procedural position must be examined.

A targeted ruling may help resolve a genuine treaty question

French procedure provides a specific route for seeking assurance about the absence of a permanent establishment or fixed base within the meaning of an applicable tax treaty. Article L. 80 B, 6° of the Livre des procédures fiscales contains the relevant framework. Its conditions include a good-faith, precise and complete written presentation. [17]

The protection should not be overstated. It concerns the question and facts properly submitted under the procedure. It does not amount to general approval of the company's VAT, employment, customs, corporate or contractual position.

The statutory treatment of administrative silence is also conditional. It should not be confused with sending an informal email and assuming that no reply means approval. The request must comply with the relevant procedural requirements, and the time limit must be assessed from the correct starting point.

Preparing the request can itself improve the business's understanding. It requires a clear account of premises, personnel, authority, contracts and expected activity. If management cannot describe those matters consistently, the underlying organisation may need clarification before a reliable ruling request can be made.

Any subsequent material change should be reviewed. An assurance based on limited marketing activity cannot safely be treated as covering a later operation that negotiates contracts, maintains stock and performs customer services in France.

B. Choose the operating structure by reference to responsibility, commercial needs and evidence

Direct trading is most coherent when the actual operation remains abroad

Direct cross-border trading can be efficient where production, management, contracting and service delivery remain abroad and the French market is served without a local operational establishment. The foreign company retains the customer relationship and avoids the governance costs of a separate subsidiary.

Its suitability nevertheless depends on the complete operating model. The company still needs appropriate contracts, transaction-specific VAT treatment, reliable evidence and a process for identifying changes in French activity.

The model can also leave the foreign company directly exposed to customer claims. There is no French subsidiary interposed between the customer and the seller. This may be acceptable, but it should be reflected in insurance, liability allocation and the group's assessment of litigation risk.

Direct trading is not necessarily a temporary arrangement. For some businesses it remains appropriate at substantial scale. For others, customer expectations, local delivery commitments or staffing needs make a more structured French presence commercially preferable long before tax law forces a particular conclusion.

The decision should therefore be revisited at operational milestones. Introducing French stock, appointing a representative, opening a service location, accepting installation obligations or relocating a director can be more significant than crossing a revenue target.

A branch offers local organisation within the existing company

A branch can provide an organised French presence without creating a separate legal person. It allows the foreign company to operate through a recognised local establishment while remaining the contracting enterprise.

The absence of separate personality is both a practical feature and a liability consideration. The foreign company remains responsible for obligations incurred through the branch. The branch should not be presented to management as a liability shield equivalent to a subsidiary.

Registration, accounts, tax filings and other obligations must be organised for the French activity. A branch is not merely a postal address. Its relationship with head office needs workable procedures for funding, expenses, authority, invoicing and allocation of results.

The tax review should include any relevant branch-profit distribution rules and treaty relief rather than considering corporate income tax alone. It should also identify how the home jurisdiction treats the French results and provides relief from double taxation where applicable.

Commercially, a branch may suit a business that wants a local operation closely integrated with its existing contracts and balance sheet. It may be less attractive where the group wants distinct equity ownership, a local investment partner or clearer separation of contractual liabilities.

The appropriate choice depends on the business. A branch should not be selected simply because it appears quicker to open, without considering the long-term consequences of operating as the same legal person.

A subsidiary creates a separate platform, not automatic tax immunity for the parent

A subsidiary can employ staff, own stock, sign customer contracts and develop a French business in its own name. It can provide a clearer platform for local investment, financing and future ownership changes.

That separation must be reflected in practice. The group should determine which company contracts with customers, owns inventory and intellectual property, bears warranty obligations and manages receivables. The French entity's revenue and expenses should correspond to its actual functions.

The parent may still retain exposure through guarantees, its own commitments or other recognised grounds of liability. Separate personality should therefore be presented accurately rather than as an absolute promise that the parent can never be affected by French disputes.

Nor does incorporation automatically eliminate the parent's permanent-establishment questions. A subsidiary that habitually acts for its parent in circumstances meeting the applicable treaty test can require separate analysis. The subsidiary's own tax compliance does not necessarily answer whether the parent also conducts taxable activity through it.

Intercompany agreements should address the actual model: distribution, sales support, licensing, technical services, financing or management services. Their pricing and performance must be consistent with applicable tax rules. A contract drafted after the event cannot by itself establish that the operations occurred as described.

Governance matters as well. The group should identify who may bind the subsidiary and how reserved decisions are taken. Excessive informality can blur the allocation of responsibilities between the French entity, its directors and the foreign parent.

A liaison office must remain consistent with its limited purpose

A business may wish to explore France through a liaison or representative office. Such an arrangement is commonly associated with information gathering, promotion and preparatory activity rather than carrying on a full commercial operation.

The label should not be relied upon if the office actually negotiates and concludes transactions, supplies services or performs the core business. Commercial registration and tax consequences depend on what happens in practice and on the applicable rules.

A liaison arrangement should therefore have a defined purpose, limits on authority and a review date. Management should decide what operational changes will trigger reconsideration: local contracting, order acceptance, stockholding, delivery services or an expanded workforce.

This is especially important when the office succeeds. Market development can gradually become a sales operation without a formal decision being taken. The company's documents continue to describe research and promotion while its personnel are managing customers and settling commercial terms.

An appropriate structure should accommodate the activity the business now conducts. It should not preserve an obsolete description merely because that description was convenient at launch.

Moving from direct sales to a subsidiary requires a transition plan

Once a French subsidiary is created, existing customers do not automatically become its customers. The foreign company may remain party to the contracts, entitled to receivables and responsible for warranties.

The transition should identify which agreements can be assigned, which require consent and which should be replaced for future orders. The chosen mechanism depends on the contracts and applicable law. Customer communications should accurately describe the change and its effective date.

Inventory requires its own analysis. The transfer of stock to a subsidiary can be a transaction with VAT, valuation and accounting consequences. Goods held by a logistics provider must be traceable to their owner before and after the transfer.

Employees, sales representatives and service providers may also be affected. The group should examine whether their arrangements can be transferred, whether consent or statutory rules apply and how accrued rights or liabilities are treated.

The transition should preserve historic evidence. The parent needs access to records supporting earlier invoices and tax positions, while the subsidiary needs the information required to perform future obligations. A single cutover date in the accounting system may not capture every legal effective date.

The first months after transition deserve monitoring. Duplicate invoices, mismatched bank details, unclear credit notes and inconsistent warranty responses can create customer disputes even where the intended legal structure is sound.

Four practical examples show why one structure does not fit every business

Take first an Irish software company supplying subscriptions to French businesses. Its staff, infrastructure and management are abroad, and it has no person negotiating its contracts in France. The initial review would focus on customer status, service classification, VAT treatment, contractual terms and evidence. French customers alone do not establish the need for a French subsidiary.

The position changes if that company appoints a French country manager who habitually negotiates the essential terms, builds a local support team and operates from a dedicated location. Those facts introduce employment and permanent-establishment questions that were absent from the original model. The original tax note should be updated before assuming that the same conclusion remains valid.

Consider next a British manufacturer selling to a genuinely independent French distributor. The distributor purchases and resells in its own name. The supplier's main concerns include the distribution agreement, product compliance, customs allocation, VAT treatment and the distributor's operational independence. The distributor's existence should not automatically be treated as the supplier's branch.

If the supplier later sends its own personnel to manage French customers from the distributor's premises, the analysis becomes different. Access to premises, authority over sales and the allocation of functions should be reconsidered. The distribution agreement may still exist, but it no longer describes the entire French operation.

Now take an American brand holding inventory in a French fulfilment centre and selling both to consumers and businesses. French VAT identification and reporting may be required, with different treatments for different sales. Marketplace rules, imports and stock movements require separate attention. Whether the arrangement also creates a corporate-tax permanent establishment depends on the applicable treaty and the actual logistics and commercial functions.

Finally, consider a Swiss consulting firm whose director moves to France and delivers most client work from a French home office. Its contracts may remain Swiss and some customers may be outside France. Yet the location of management and service delivery now requires analysis. The fact that few customers are French does not remove the consequences of performing and directing the business from France.

These examples are deliberately simplified. Their value lies in identifying the facts that change the analysis. Country of incorporation and customer location are starting points; the actual organisation determines which further questions must be answered.

The first consultation should begin with evidence of how the business operates

A useful review does not require a polished presentation. It requires a reliable description of the transaction flows and decision-making process.

The business should be able to provide its constitutional and tax-residence documents, principal customer contracts, standard terms, invoices, distribution or agency agreements and relevant service contracts. Where goods are involved, stock reports, transport arrangements and customs documentation help establish the physical flows.

For personnel, the review needs job descriptions, work locations, travel patterns, employment or consulting agreements and delegated authority. For management, it needs an accurate account of who makes decisions and where substantive decisions are made.

The financial information should distinguish French customer revenue from revenue generated through French functions. Those concepts may overlap, but they are not identical. A breakdown of relevant expenses and intercompany charges will also assist if profit attribution becomes necessary.

The adviser should then identify the principal uncertainties rather than simply produce a list of every conceivable rule. A company with remote B2B services may need a focused contractual and VAT review. A business with local stock, sales personnel and historic undeclared activity requires a broader analysis.

This proportional approach makes the work commercially useful. The objective is to decide what can proceed, what must be registered, which contracts need revision and what facts require further evidence.

Documentation should follow the business process

An organisation chart records ownership. It rarely proves where a sales decision was taken, whether a person could bind the company or who controlled a warehouse operation. Those questions require records generated by the business process itself.

For sales, useful evidence may include quotations, approval records, customer correspondence and signed orders. For logistics, it may include warehouse instructions, inventory records and transport evidence. For management, it may include substantive board materials and records of the decisions actually made.

The purpose is not to accumulate documents indiscriminately. It is to retain the evidence relevant to the legal position the company intends to maintain. If headquarters genuinely reviews French proposals, the process should leave a reliable record of that review.

The same principle applies to contractual obligations. If the supplier relies on customer acceptance, it should retain evidence of the accepted version of the terms. If it relies on delivery, it should preserve proof of delivery linked to the relevant order.

Evidence should remain accessible when personnel leave, platforms close accounts or service providers change. A business that stores all material information in one employee's mailbox may be unable to explain its position when a dispute arises several years later.

Responsibility should be allocated across the advisers and the business

International projects often involve a lawyer, accountant, payroll provider, customs broker, logistics provider and software supplier. Their roles overlap, but they do not automatically cover each other's work.

The company should identify who is responsible for legal classification, registration, returns, invoice configuration, customs declarations and monitoring changes. It should also identify who receives official notices and who can authorise a response.

An accountant may correctly prepare a return using the transactions supplied while remaining unaware that a sales manager has acquired authority to negotiate contracts in France. A lawyer may draft a distribution agreement while the logistics team later changes the stock location. A reporting provider may transmit accurate data for an incorrectly classified transaction.

Regular communication between those functions prevents gaps. The business should notify its advisers before introducing a new warehouse, local employee, delivery obligation, marketplace programme or customer category. Those changes are easier to assess before they become embedded in the operation.

This does not require a large administrative structure. A concise review process tied to meaningful business changes is often sufficient for a smaller enterprise. What matters is that somebody owns the decision to revisit the original assumptions.

Review the model when commercial success changes the facts

The most common risk is not necessarily a flawed initial plan. It is an initially reasonable plan that is never updated.

A company begins with occasional exports. It later appoints a representative, adds local stock, offers installation, allows a senior employee to work from France and asks that employee to manage key accounts. Each decision has a commercial explanation. Together, they may create a materially different French operation.

The review should therefore be triggered by changes in functions and organisation, not only by the annual accounts. A new authority to grant discounts, a dedicated customer site or a transfer of management responsibilities can be more significant than a steady increase in invoices.

The company should also revisit the legal framework when relevant treaty provisions, reporting requirements or administrative guidance change. A sound operational model still needs current compliance procedures.

Where a branch or subsidiary has become appropriate, the decision should be implemented coherently across contracts, tax, employment, stock and systems. Where direct trading remains suitable, the company should retain the evidence and procedures supporting that conclusion.

Choose the structure that matches the French activity

A foreign company can often sell to France without a French subsidiary. The useful decision is whether that model fits the activity actually carried on and whether the associated obligations have been organised.

Before launching or expanding, identify the contracting entity, map the goods and services, determine the VAT treatment, examine the applicable treaty and review the authority exercised by anyone acting in France. Then compare direct trading, a branch and a subsidiary by reference to customer needs, responsibility, staffing and tax consequences.

Where the French activity has already developed, the immediate priority is to establish what has happened and since when. Future incorporation can support a better organisation, but it must be coordinated with the historic position and existing contracts.

Rodolphe ROUS Avocat advises foreign businesses on the legal and tax organisation of their activities in France, including commercial contracts, establishment questions and the transition to a French operating structure.

Sources and further reading

1. French Commercial Code, Article L. 134-1, commercial agents.2. French Commercial Code, Article L. 134-12, termination compensation.3. Regulation (EC) No 593/2008, Rome I, particularly Articles 3, 4, 6 and 9.4. Regulation (EU) No 1215/2012, Brussels I bis, particularly Articles 7 and 25 and the protective jurisdiction rules.5. UNCITRAL, CISG text and status of contracting States.6. French Commercial Code, Article L. 442-1, with the applicable version to be checked for the relevant events.7. Directive 2006/112/EC, common system of VAT, in particular the rules on place of supply, liability and special schemes.8. French General Tax Code, VAT provisions and Article 283, including commencement and future codification notes.9. DGFiP, competent business tax department for businesses without a permanent establishment.10. Implementing Regulation (EU) No 282/2011, Article 11.11. CJEU, 7 April 2022, Berlin Chemie, C-333/20.12. CJEU, 29 June 2023, Cabot Plastics Belgium, C-232/22.13. DGFiP, E-reporting requirements for foreign companies without a permanent establishment in France. Detailed scope and implementation requirements should be checked for the business and transactions concerned.14. BOFiP, BOI-IS-CHAMP-60-10-30, foreign enterprises and territorial corporate taxation.15. Conseil d'État, 11 December 2020, Conversant International, no. 420174.16. Conseil d'État, 4 April 2025, no. 461220.17. Livre des procédures fiscales, Article L. 80 B, particularly paragraph 6°, together with the applicable procedural provisions.