Hector O Neill

Why setting up a liaison office is ideal in the current economic climate

Background

The liaison office is suited to those who are looking to set up a base in France without incorporating a permanent establishment. A liaison office does not require a bank account and does not bring with it the obligation to pay VAT, CET or corporate tax, you are not obliged to maintain bookkeeping or fill in financial statements either. With this structure, you cannot engage in commercial activity or bring in any revenue in France. It is ideal in situations such as the following:

• When a company is looking to gauge the French market before entering into it with a permanent entity. The liaison office can be converted into a branch later so provides a good starting point for a company that is unfamiliar with French business and culture.
• For establishing an employee in France with a role that will not bring in revenue such as marketing.
• If an employee wishes to work from France for a foreign (non-French) company.

Why is a liaison office the right choice at the moment?

Cross-border business activity is being severely hampered by the current economic conditions. The five key issues that we have identified in France are as follows:

• Brexit and COVID have made intranational communication more difficult.
• Compulsory and unpredictable restrictions and quarantines complicate travel and trade, for example meaning that employees cannot go abroad to meet clients.
• Health and safety restrictions also prevent employees from coming into the office; this can make teamwork and building a good office dynamic challenging. It also complicates the recruitment process.
• Regulation has become unstable and changes rapidly. This generates fiscal risk and could affect a project’s budget.

The steps involved in setting up a liaison office

1. Set up domiciliation and postal power of attorney at a registered office address (for example at Maupard’s address).
2. Register as a non-resident employer with the Bas-Rhin URSSAF (a social security agency).
3. Register as a liaison office with the RC (Commercial Register).
4. Appoint a representative.
5. Establish identity policy: business card, domain name etc.

 

At Maupard we can provide all of these services for you to ensure a smooth setup of your liaison office. Please write to [email protected] for further information.