For a U.S. company opening its first office in Europe, France and the United Kingdom are common starting points — but they operate under different legal systems, and treating them as interchangeable is a frequent early mistake. A few issues come up in almost every expansion.
Two Markets, Two Different Systems
The UK's common-law system will feel more familiar to a U.S. company than France's civil-law framework, but neither market should be approached as "U.S. law with a different accent." Contract interpretation, employee protections, and regulatory expectations differ meaningfully between the two, and from the United States.
Choosing a Legal Structure
Options generally range from a representative office or branch, which has limited legal and tax standing, to a locally incorporated subsidiary (a private limited company in the UK, or an SAS or SARL in France), which offers liability protection and is usually the better choice for any substantive commercial activity.
Registration and Tax Obligations
Both jurisdictions require formal company registration, and both have VAT regimes that differ substantially from U.S. sales tax — VAT registration thresholds, invoicing requirements and filing obligations need to be understood before the entity starts trading, not after.
Employment Law Considerations
French and UK employment law both provide significantly more employee protection than most U.S. states, including rules on termination, notice periods, and in France, mandatory collective bargaining agreements that can apply even to a small new subsidiary. Employment structuring deserves early attention, well before the first local hire.
Data Protection Compliance
Both the UK and France apply GDPR-based data protection rules, which are considerably more prescriptive than typical U.S. practice. Any company handling customer or employee data in these markets — which is nearly all companies — needs a compliance plan for lawful basis, data subject rights, and cross-border data transfers from day one.