Can I Use My Indian Company to Do Business in France Legally?
If you’re an Indian entrepreneur looking at France as part of your global expansion strategy, you may be asking an important question: Can I legally use my Indian company to do business over there?
The short answer is, “yes,” but you need to understand when it’s possible to operate from India, and when French law will require you to have a legal presence in France.
In this blog, we’ll go deep into some important and different scenarios, risks, and options you have if you want to grow your Indian business into France, without getting caught in expensive legal or tax problems.
Things to Know About Doing Business in France as an Indian Business
First Things First: What Does "Doing Business in France" Actually Mean?
French authorities are quite strict about foreign companies operating within their territory.
Simply selling to customers in France from India — like exporting goods or providing digital services — usually doesn’t require setting up a local entity.
However, if your activities go beyond “passive” sales, such as:
Hiring employees or agents in France, having a physical office or warehouse,holding inventory in France, conducting marketing activities locally, and regular services performed in France, then the French authorities will consider that you are “doing business in France” in a substantial way.
And, once you reach that point, you may legally be required to create a local presence and pay taxes in France.
Can You Just Invoice French Clients From Your Indian Company?
In many cases, yes, you can invoice French clients directly from your Indian company without opening an entity in France. This is crucial if you deliver services inside France physically, perform installation, maintenance, after-sales activities in France, or maintain a stock or logistics hub there then even if you are invoicing from India, French authorities may say that you are operating here and you must have a local registration, pay VAT, and possibly pay corporate taxes too.
This is where understanding Permanent Establishment (PE) risk becomes critical.
What is Permanent Establishment (PE) Risk?
France and India have a Double Taxation Avoidance Agreement (DTAA) that defines when a foreign company is considered to have a taxable presence (permanent establishment) in France.
According to the DTAA and French rules, you will be considered to have a PE in France if:
- You have a fixed place of business in France, like an office, branch, factory, warehouse
- You have people (employees or agents) who habitually conclude contracts on your behalf
- You carry out projects (like construction) lasting more than 6 to 12 months (depending on the agreement)
But, if you create a PE accidentally then you must pay French corporate income tax on your French-sourced income, you may need to register for French VAT, and penalties and interest can apply if you don’t comply.
Bottom line:
If your operations are simple exports from India, you’re safe.
If you “cross the line” into active business operations inside France, then you must prepare to register locally.
What Are Your Options to Stay Legal?
If you realize your Indian company’s activities in France may lead to PE risk, you have a few options:
- Operate Carefully as an Exporter
You can sell goods or services from India to French clients without creating a local office, keeping operations remote.
In this case:
- Invoice from India
- Deliver digitally or ship products internationally
- No local employees, warehouses, or offices
- Be mindful of French VAT rules (for some services like digital goods, French VAT may still apply even without local presence)
This model is low-risk but limits how closely you can engage with the French market.
- Register for VAT Only
In some cases, even without a full company setup, you may also need to register for French VAT.
For instance:
– If you sell goods already located in France
– If you are selling B2C digital services
– If you are involved in e-commerce (with warehousing in Europe)
So, you would get a French VAT number, collect VAT from clients, and file VAT returns, but you don’t create a full taxable entity.
- Set Up a Legal Presence in France
If business volume is growing or if your operations involve local hiring, stock, or offices, the safest route is to set up a formal presence.
Your options are:
- Representative Office (no commercial activities, just market research)
- Branch Office (extension of Indian company; limited protection)
- Subsidiary Company (independent legal entity; best for serious long-term plans)
- Setting up a subsidiary (like a SAS or SARL) is most common for businesses serious about France.
Other Important Considerations
Taxation
France’s corporate tax rate is currently around 25%. VAT is generally 20%, though some products/services have lower rates. Also, if you have a PE, your French income will be taxable in France.
Employment Laws
If you plan to hire people in France, remember that you must follow strict French labour laws, employment contracts must usually be in French, and social charges (employer contributions) can be significant.
Regulatory Licenses
Some sectors (financial services, healthcare, food) require special licenses before starting operations.
Cultural Adaptation
Even legally, having a French-speaking representative and understanding local business etiquette greatly improves your chances of success.
What Happens If You Ignore Local Requirements?
If you start operating in France without registering when you should:
- You risk audits and investigations from French tax authorities
- You could be hit with corporate tax back-payments, VAT demands, interest, and fines
- Your reputation could be damaged with partners, clients, and the government
So, it is much better to plan compliance properly from the start.
Wrap Up
So by now you might have got a clear answer to your question whether you can use your Indian company to do business in France legally or not. However, creating and following a global expansion strategy in France can be complex and requires careful legal, tax, and operational planning.
At Exportis, we help Indian companies and global businesses navigate international expansion challenges — including setting up representative offices, subsidiaries, joint ventures, and mergers in France and Europe. Our expertise ensures you stay compliant, efficient, and strategically positioned to succeed in new markets.
If you’re serious about growing into France, getting the right guidance can make all the difference between smooth success and unexpected headaches.
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