News : In 2025, France attracted 852 foreign direct investment projects, down 17% year on year, while holding first place in Europe for the seventh consecutive year, ahead of the United Kingdom (730 projects) and Germany (548). Those projects generated close to 27,921 jobs, 4% fewer than in 2024. One figure frames the whole subject: 5% of the projects accounted for 50% of the jobs created (EY, Baromètre de l’Attractivité de la France 2026, 21 May 2026).
The typical French subsidiary is not a five-hundred-person plant. It is a team of three to twenty people: too few to justify a full-time HR director, far too many to improvise.
Building the HR function of a French subsidiary means sequencing three workstreams across ninety days: identifying the collective bargaining agreement that actually governs the entity’s activity before the first contract is drafted; putting in place the employer obligations triggered by the first employee, pre-hire declaration, single staff register, occupational health, supplementary pension, collective health cover; and appointing an HR contact reachable in France who speaks French to the employee and English to headquarters. Everything else follows, at precise headcount thresholds.
This is the sequence I run when headquarters calls me in. Why a foreign parent needs a local HR anchor in France at all is a separate question, covered elsewhere.
Days 1 to 30: what to settle before the first hire
You do not choose your collective agreement : your activity determines it
This is the step that is almost always missing. Article L2261-2 of the French Labour Code sets the rule: the applicable collective agreement is the one covering “the main activity carried on by the employer” (code.travail.gouv.fr, in French). The NAF activity code assigned at incorporation is an indication, not a decision.
It has to be settled before the first contract: the industry-level agreement sets, or may set, what headquarters will never find in the statute alone, minimum salaries per classification, whether a probation period may be renewed at all, overtime premiums, death-and-disability cover. Article L2251-1 confirms that a collective agreement “may contain provisions more favourable to employees than the legal provisions in force” (code.travail.gouv.fr, in French). Drafting from the Labour Code alone means applying an incomplete set of rules, and finding out at the first dispute.
Working time, before you promise anything to a candidate
Statutory working time for a full-time employee is thirty-five hours a week (article L3121-27, code.travail.gouv.fr, in French): neither a cap nor a ceiling on attendance, but the threshold above which hours attract a premium.
The expensive topic is the forfait en jours, the day-count arrangement many headquarters read as the French equivalent of exempt status. It is not: article L3121-64 requires a collective agreement setting the categories concerned, the number of days worked within a 218-day ceiling, the regular monitoring of workload and the right to disconnect (Légifrance, in French). Without a valid agreement and effective monitoring, the arrangement is deprived of effect and the employee can claim retroactive overtime pay.
A probation period does not renew itself
Initial durations are set by article L1221-19: two months for blue-collar and clerical staff, three for supervisors and technicians, four for cadres, the French executive category (Légifrance, in French). The trap is renewal: a probation period “may be renewed once if an extended industry-level agreement so provides” (article L1221-21, Légifrance, in French). Without that agreement, no renewal at all : transpose a six-month probation unchecked and you have a confirmed employee you never decided to confirm.
Days 30 to 60: the first employee triggers a chain of obligations
Signing the first contract is not the end of the setup : it is what sets it off. Here is what opens at that point, per the French administration’s “hiring formalities” factsheet, verified on 1 June 2026:
- The pre-hire declaration (DPAE), filed with the social security body “before the employee takes up duties or the probation period begins, at the earliest within the 8 days preceding the hiring date” (service-public.gouv.fr, in French).
- Entry in the single staff register, from the first employee hired.
- The information and prevention medical visit, which assumes the entity has already joined an occupational health and prevention service.
- Affiliation to the supplementary pension scheme (Agirc-Arrco).
- Collective supplementary health cover: “every private-sector employer (company or association) is required to offer collective supplementary health cover to its employees”, with an employer contribution of at least half the premium (service-public.gouv.fr, in French, verified 20 January 2026).
None of this is hard. What is hard is noticing it in time: an accounting firm produces payslips from what it is given, it will not flag a classification sitting below the industry minimum.
A budget warning on starting salaries: the French minimum wage rose 2.41% on 1 June 2026, to €12.31 gross per hour and €1,867.02 gross per month for a 35-hour week (order of 22 May 2026, Official Journal no. 0121 of 24 May 2026) : the second increase of the year, after 1.18% on 1 January. Budget for one uplift and you are already out of step; industry minima can sit above the statutory floor.
Days 60 to 90: making the subsidiary governable
The last thirty days install what will hold the team together once headquarters stops watching daily.
- A real onboarding path: who welcomes the joiner, who explains the payslip, who answers questions in the first weeks.
- An HR calendar: leave, appraisals, probation periods to confirm or end, a missed probation deadline cannot be recovered.
- A properly kept employee file: contracts, amendments, sick-leave certificates, letters.
- An identified HR contact employees know, in French, distinct from their line manager.
This is also when to explain paid leave: article L3141-3 grants “two and a half working days per month of actual work with the same employer”, capped at thirty working days (code.travail.gouv.fr, in French) : and the French count includes Saturdays. That calendar moves too: a supplementary birth leave open to both parents has applied since 1 July 2026 (Code du travail numérique, decree no. 2026-419 of 30 May 2026, in French).
Headcount thresholds that change the rules
A French subsidiary does not change regime gradually : it crosses thresholds.
| Headcount | What changes for the subsidiary |
|---|---|
| First employee | Pre-hire declaration, single staff register, occupational health, supplementary pension, collective health cover. |
| 11 employees | A social and economic committee (CSE) must be set up; the obligation only bites if the threshold is reached over twelve consecutive months (article L2311-2). |
| 50 employees | The CSE moves from reduced to full powers, and an operating subsidy equal to 0.20% of gross payroll is paid to it (article L2315-61). |
These three lines are not exhaustive. What matters is that the eleven-employee threshold is prepared before it is crossed : a subsidiary hiring quickly passes it within six months without anyone at headquarters seeing the election coming.
What foreign headquarters consistently underestimate
Employee representation is not paperwork
The committee exists “to ensure the collective expression of employees, allowing their interests to be permanently taken into account” in management decisions, and is informed and consulted on measures affecting headcount, organisation and working conditions (article L2312-8, code.travail.gouv.fr, in French). A headquarters that discovers it on the day it contemplates a reorganisation discovers at the same time that it should have set it up twelve months earlier.
Social rituals cannot be decreed from headquarters
How a decision is announced, when it is said, what gets settled before the meeting rather than in it: all of that is local and appears in no group handbook. A message translated literally and sent out on a Friday evening lands, in a French team, in a way nobody at headquarters anticipated.
A French manager does not hold the same mandate
In many groups the line manager runs disciplinary conversations and handles exits personally. In France, part of that sits inside a regulated procedure: dismissal on personal grounds requires a preliminary meeting “before any decision”, which “may not take place less than five working days after the registered letter is presented” (article L1232-2, code.travail.gouv.fr, in French). My job at launch is to tell that manager what he can handle alone, and what he must never handle alone.
Who holds the HR function during those ninety days?
- The country manager does it. The default scenario, and the most expensive: time spent on affiliations is time not spent on the first customers.
- The accounting firm. Essential for payroll, but payroll is not HR: it executes what it is given, it does not decide the collective agreement or the classification.
- An EOR or PEO platform. A genuine option, particularly while the French entity is not yet incorporated. I compare it head-on with a human partner in a dedicated article.
- A fractional HR partner physically present in France. That is what I do: two days a week at minimum, over the long term, as the single point of contact for headquarters.
The difference rarely shows in a feature list; it shows in situations. When an employee announces a pregnancy and her manager does not know what to say, when two people in a six-person team have stopped speaking : what is needed is someone who speaks French, knows the collective agreement, and can be in the room. Moving an entire team to France, mobility included, is a separate subject.
What this article does not cover
- Setting up the entity itself : corporate form, incorporation, articles, tax: that belongs to your accountant and your lawyer.
- Payroll in detail, the EOR/PEO comparison, residence permits, and structures that are not subsidiaries: each has its own treatment.
And above all: none of the above is legal advice. I am an HR consultant, not a lawyer. On a specific case (a contested day-count arrangement, a dismissal, a reclassification) have the file reviewed by an employment lawyer, and I say so before I am asked.
FAQ
Do I need to hire an HR director when opening a French subsidiary?
Rarely. Below roughly twenty employees, a full-time HR director is oversized and having no HR at all is undersized. Between the two, a fractional HR function covers the employment framework, employer obligations and manager support.
Which collective bargaining agreement applies to the French subsidiary of a foreign group?
The one covering the main activity actually carried on by the employer in France, under article L2261-2 of the French Labour Code. It does not depend on the parent company’s nationality, on home-country practice, or on the NAF code alone.
At what headcount does France require employee representatives?
Eleven. A social and economic committee must be set up in companies with at least eleven employees, the obligation applying only if that threshold is reached over twelve consecutive months (article L2311-2). At fifty employees, the committee gains full powers.
Can HR for a French subsidiary be run entirely remotely from headquarters?
Compliance, partly. The rest, no. Understanding why an employee is withdrawing, running a difficult conversation, coaching a manager: those situations require someone present, in French, in the same room.
Talk to me about your French launch
If you are opening a French subsidiary and nobody currently owns HR, I can take that workstream: it is the core of the HR support I provide, on a fractional basis, on site and over the long term. Tell me your opening timeline and your first hires, and I will tell you what has to be settled first. Write to me and I will suggest a time for a call.
Sources
- EY, Baromètre de l’Attractivité de la France 2026. View source
- Code du travail numérique, ministère du Travail, article L. 2261-2 (accessed 2 September 2026). Code du travail numérique
- Code du travail numérique, ministère du Travail, article L. 2251-1 (accessed 2 September 2026). Code du travail numérique
- Code du travail numérique, ministère du Travail, article L. 3121-27 (accessed 2 September 2026). Code du travail numérique
- Légifrance, article L. 3121-64 (accessed 2 September 2026). Légifrance
- Légifrance, article L. 1221-19 (accessed 2 September 2026). Légifrance
- Légifrance, article L. 1221-21 (accessed 2 September 2026). Légifrance
- service-public.gouv.fr (Entreprendre), fiche Formalités d’embauche F23107, vérifiée le 1er juin 2026. service-public.fr
- service-public.gouv.fr (Entreprendre), fiche F33754, vérifiée le 20 janvier 2026. service-public.fr
- Arrêté du 22 mai 2026, JORF n° 0121 du 24 mai 2026. Légifrance
- Code du travail numérique, ministère du Travail, article L. 3141-3 (accessed 2 September 2026). Code du travail numérique
- Code du travail numérique, ministère du Travail, article L. 2311-2 (accessed 2 September 2026). Code du travail numérique
- Code du travail numérique, ministère du Travail, article L. 2312-8 (accessed 2 September 2026). Code du travail numérique
- Code du travail numérique, ministère du Travail, article L. 2315-61 (accessed 2 September 2026). Code du travail numérique
- Code du travail numérique, ministère du Travail, article L. 1232-2 (accessed 2 September 2026). Code du travail numérique
- Légifrance, Journal officiel de la République française, 27 May 2026. Légifrance
- Code du travail numérique, ministère du Travail, 1 April 2026. Code du travail numérique
