Headquarters in France or the United States: which strategy should you adopt?
- Noham Layani
- May 21
- 4 min read
Updated: Jun 2
Are you planning to set up your business in the United States? In a previous article, we already shared with you a list of 10 points to bear in mind if you want to set up in the United States.
But now another crucial question arises: should you keep your head office in France and set up an American subsidiary, or transfer the head office to the USA and transform the French entity into a subsidiary?
And the answer is not trivial. Indeed, this choice impacts not only the company's legal structure, but also its tax, social, and administrative obligations. Each option has advantages and disadvantages that should be analyzed based on the company's international development objectives.
A legitimate question therefore, which we will try to answer in this article.
OPTION 1: Maintain the head office in France with a subsidiary in the United States
Benefits :
Administrative simplicity: This configuration allows the French legal and tax structure to be retained, thus avoiding the complex procedures linked to the transfer of headquarters.
Tax optimization: Profits made in the United States can be repatriated to France in the form of dividends, potentially benefiting from tax treaties between the two countries to avoid double taxation.
Operational flexibility: The US subsidiary can be adapted to the specificities of the local market while remaining aligned with the company's overall strategy.
Disadvantages:
Local Perception: Some U.S. companies or investors may prefer to deal with local entities, which could limit certain business or financing opportunities.
Tax complexity: Managing transfer pricing and tax obligations between the parent company and the subsidiary requires special attention to ensure compliance.
OPTION 2: Transfer the head office to the United States and transform the French entity into a subsidiary
Benefits :
Access to the US market: Having a headquarters in the United States can facilitate access to certain local markets, customers or investors that favor American companies.
Attractiveness to investors: US investors may be more inclined to invest in a US-based company, particularly for regulatory and tax reasons.
Disadvantages:
Legal and tax complexity: Transferring the head office abroad is a complex operation, involving significant legal, tax and administrative procedures.
Tax consequences in France: Transferring your registered office outside the European Union may result in immediate taxation of profits made, deferred profits, and capital gains on the sale of fixed assets. In the event of a loss, losses cannot be carried forward.
Loss of certain advantages: The company could lose certain advantages linked to its domicile in France, such as subsidies or specific tax arrangements.
Comparison of social security contributions: France vs. the United States
It's also worth noting that choosing the location of your head office also has significant implications for your social security contributions. Here's what you need to remember:
In France :
Employer contributions: Employer contributions represent on average between 22% and 42% of gross salary, depending on the employee's status and applicable collective agreements.
Social protection: This high level of charges finances a comprehensive social protection system, including health insurance, retirement, unemployment insurance, etc.
In the United States:
Employer Contributions: Employer contributions are generally lower, with a federal rate of 7.65% of gross salary for payroll taxes (6.2% for Social Security and 1.45% for Medicare). In addition, there are variable state and local taxes, as well as costs for private insurance (health, retirement, etc.).
Social protection: The social protection system is less centralized, and employers often have to subscribe to private insurance to provide coverage comparable to that of the French system.
So, although employer contributions are lower in the United States, the costs of private insurance can offset this difference.
So, which option should you choose?
The choice between a headquarters in France and a subsidiary in the US, or vice versa, depends on several factors, including:
The company's international development strategy
If the objective is to strengthen the presence in the American market while maintaining a solid base in France, the creation of a subsidiary may be preferable.
Requirements of partners or investors
If US partners or investors require a local entity, relocating the head office may be considered.
Tax and legal implications
It is essential to analyze in detail the tax and legal consequences of each option to ultimately make the best decision.
And at Blendy, CPA for international SMEs, we support you on all these points!
Our goal? To offer you tailored support and advice to optimally structure your presence in the United States.
This is what we have been doing for over 10 years now, supporting French companies in their expansion beyond our borders while taking into account their strategic objectives and the tax and legal implications.
Contact us today to discuss your plans to set up in the United States.
With Blendy ,English-speaking French CPA take advantage of digital accounting to accelerate your finance process and develop your business.
Pennylane, Dext, QuickBooks and Stripe experts, we support digital and IT service companies, e-Commerce, SaaS, SMBs, in France and internationally.
