Hiring a first employee in France

The situation

Our support

1. 01

   Comparing the different employment structures

   We compared several options:

   • direct employment by the foreign company, with its registration in France as an employer without an establishment;
   • the use of an Employer of Record, which becomes the employee’s legal employer and handles the French payroll;
   • the creation of a French subsidiary or branch, in particular if the company plans to develop its activity in France on a lasting basis;
   • where circumstances allowed, a secondment or cross-border remote-working arrangement, with possible retention of the home-country social security scheme;
   • the use of an independent contractor, provided that the actual conditions of the collaboration do not amount to an employment relationship.

   Point of attention. A foreign company can hire an employee in France without immediately creating a subsidiary. The choice of structure nonetheless depends on the duties performed, the length of the project and the level of presence envisaged in France.
2. 02

   Organising the hire and payroll in France

   Where the employee falls within the French social security scheme, the foreign employer without an establishment must register with the competent Urssaf department, declare the hire and pay the French social security contributions.

   We coordinated:

   • the registration of the company as an employer in France;
   • the setting up of a French payroll;
   • the preparation of the employment contract compliant with French law;
   • the employee’s affiliation to the applicable social protection schemes;
   • the declaration and payment of social security contributions;
   • the withholding of income tax at source;
   • any immigration and work-authorisation steps;
   • the analysis of the impatriate tax regime where the employee was recruited from abroad.

   Where the employee is not a national of the European Union, the European Economic Area or Switzerland, the need for a work authorisation must also be checked according to their residence permit.

3. 03

   Identifying the risks linked to the presence in France

   Finally, we examined whether the duties performed by the employee were likely to create a permanent establishment of the foreign company in France.

   The analysis focused in particular on:

   • the place from which the employee would carry out their activity;
   • their commercial role and their relationships with French clients;
   • their ability to negotiate or conclude contracts;
   • their level of autonomy;
   • the premises or resources made available to them;
   • the temporary or lasting nature of the presence in France.

   Point of attention. Using an Employer of Record or registering as a foreign employer is not, in itself, enough to rule out this risk. It depends above all on the activities actually carried out in France.