UK subsidiaries for French companies

French groups run 64 investment projects into the UK in a year, third behind the United States and India. The company law side is simple, and a French parent will find UK incorporation dramatically lighter than the French equivalent: one day, no notary, no minimum capital, no statutory auditor unless the group is large enough to need one.

What takes the time

Since Brexit, goods moving between France and the UK cross a customs border. The UK subsidiary needs an EORI number, a customs agent, and import VAT accounted for on its own VAT return rather than paid at the border, which we set up at registration. Services are simpler: most business-to-business services bought from the French parent are taxed where the customer is, so the UK subsidiary accounts for the VAT itself under the reverse charge and, if it is fully taxable, reclaims the same amount on the same return.

People

The UK–EU Trade and Cooperation Agreement covers social security for workers posted between the two, so a French employee posted to the UK can generally stay in the French system with a certificate rather than paying UK National Insurance. UK income tax follows where the work is done. Anyone without UK work rights needs the company to hold a sponsor licence.

Money going home

No UK withholding tax on dividends to the French parent. Interest and royalties are subject to 20% UK tax at source unless the UK–France treaty reduces it and the claim is made to HMRC before payment, which we handle. Intercompany charges between the parent and the subsidiary must be at arm's length and written down.

Three things we set up differently for a French parent

1. The accounting standard. A French group reporting under French GAAP has a choice for the UK statutory accounts. FRS 102 is the default. Where the group also reports under IFRS, FRS 101 aligns the UK numbers with the group's so consolidation does not need a second set of adjustments. We decide this at set-up, not at the first year end.
2. The ownership register. Where the shareholder is an SAS or SARL, the UK register generally has to name the individuals who ultimately control it rather than the company itself. French holding structures often run through several entities, and this is the item most often wrong on incorporations done from France.
3. Customs from day one. Goods from France cross a customs border. The EORI number, the customs agent and postponed import VAT go in with the VAT registration rather than being arranged when the first pallet is already at Dover.

What French groups find lighter here

UK incorporation needs no notary, no minimum capital, no publication in a legal journal and no statutory auditor unless the group is large enough to require one. A company is formed online in a day for £100. The trade-off is that the accounts of even a very small UK company are then published on a register anyone can read.

Employment is the other direction. UK dismissal is easier than in France but is not free: there is no at-will employment, notice is contractual and statutory, and a fair reason and a fair process are both required. Budget one to three months of notice for a senior hire.