The People’s Republic of China is the world’s leading exporter, ahead of the United States, it is also the country that exports the most to the European Union. Exchanges between China and the European Union thus reach more than one billion euros per day.
France is one of the most attractive European market, which imported in 2016 more than 46 billion euros of Chinese goods. As the matter of fact, many Chinese companies would like to enter the French market.
PHYSICAL ESTABLISHMENT: EXPENSIVE AND COMPLEX SOLUTION
Usually, the introduction of a foreign company to the French market proceeds through a physical implantation which is concretized by the creation of a affiliate company or branch. However, the physical presence of the company on the market usually supposes office opening and staff recruitment, that leads to significant costs.
In addition, running a business in France through affiliate company or branch (considered as a permanent establishment of the foreign company) leads to the tax liability on realized profits in France.
Thus, the complexity and the costs of a physical establishment are often dissuasive for companies that want to test the French market first. In addition, with the boom in e-commerce sales of goods and services, a lot of companies do not need office or staff on site.
TAX REPRESENTATION: THE ONLY SIMPLE AND ECONOMIC OPTION
Chinese companies wishing to take advantage of the French market without having to resort to physical establishment must necessarily appoint a tax representative.
The tax representative’s primary role is to take necessary actions in order to obtain a French VAT number from the French tax authorities, and this prior all commercial activity in France. He is also responsible to ensure all the declarative obligations due by the Chinese company.
As a result, the company can sell its products on the French market, while managing total sum of commercial activities in France from Chinese office. There is no need for premises or staff on site, the company has a unique contact in person for its tax representative.
Tax representation is now widely used by Chinese companies who appreciate its simplicity, and time and money savings that it permits to achieve.
ASD Group specializes for more then than 20 years in tax representation. Benefit of our expertise to get established on the French market.