Tannet Group Limited has incorporated at 1988, and running business in France and EU for over 10 years, we can help you running the business at Germany, the following article is introduce the appointment of sales agents or representatives when we are setting up business with France, and we do hope it can be useful for you.

Introduction:

Foreign companies can operate in France without officially registered representation. A foreign company that wants to prospect for business in France and promote its products can start by opening a liaison office or by hiring a person to represent it in France.

Once the company has its own premises and/or employs two or more people in France, it must be officially represented by a registered liaison office (under the conditions set out in sub-section 3 below), a branch or a company.

Sales Agents:

Foreign companies may also use the services of a sales agent, i.e. self-employed individuals or companies acting on their behalf.

Agents are responsible for negotiating and in some cases signing contracts for sales, purchases, leases and provision of services on behalf of their principals. They may work for one or more companies, and are paid in part or in full by commissions on completed transactions.

Smaller companies often prefer to use sales agents as a flexible and inexpensive means of introducing their products to foreign markets.

Sales Representatives:

A sales representative may either be the employee of a Hong Kong company or an independent sales intermediary calling on prospective buyers to offer goods and services.

The primary tasks of sales representatives are to make sales calls, taking orders and submitting them to their employers. Their sales activities are taxed in France and require that the sales representatives be empowered to sign contracts on the employer’s behalf.

Liaison Offices:

A liaison office is a representation that does not engage in commercial activities. It does not exist as a legal entity separate and distinct from its parent company. The liaison office may be staffed by employees recruited locally or by employees seconded in France. Liaison offices may conduct only non-commercial activities, such as prospecting, advertising, providing information, storing merchandise, or other operations of a preparatory or auxiliary nature. It may draw up purchase orders, but the parent company must issue invoices and sign any contracts.

A liaison office is not a permanent establishment with respect to tax laws. It is subject neither to corporate tax nor to VAT. However, it is subjected to certain local taxes and other taxes based on salaries.

A liaison office can only be a temporary solution. If it becomes a lasting arrangement, the tax authorities or the courts may deem it to be a permanent establishment.

As a liaison office does not have a commercial activity, it does not need to be registered. However, a declaration of the existence of the liaison office may be submitted to the Business Formalities Centre, a one-stop-shop desk where all company formalities can be made. It must be noted that, even though the office does not carry out commercial activities, it must respect all of the provisions of French Law relating to its operations in France, including the provisions of Labor law.

All the information and data above is only for reference, for further information, please feel free to contact us.