A French SAS can in principle grant BSPCE (bons de souscription de parts de créateur d’entreprise, or founder share subscription warrants) to a foreign employee. French nationality and residence outside France are not, by themselves, exclusion grounds. The real questions are different: does the issuing company satisfy the statutory conditions, does the recipient belong to an eligible employee or corporate-officer category, and has the company followed the capital-raising procedure required for an instrument that can create new shares?

For an international team, a second layer must be handled at the same time. The employee may work in France, work remotely from another country, move between countries during the vesting period, or be employed by a subsidiary rather than by the French SAS itself. Those facts can change the French-source fraction of the gain, the withholding mechanism and the reporting documents. They also affect whether the plan survives a departure, even though tax residence and contractual vesting are separate issues.

This article explains the 2026 framework for a foreign founder, a French subsidiary or a French start-up hiring abroad. It focuses on a practical legal sequence: test the issuer, identify the correct beneficiary, approve and document the issue, set a defensible exercise price, then map each work location before exercise or sale. The company should also place its plan within its wider French company formation and corporate compliance framework, because an attractive offer letter cannot cure an invalid corporate decision.

I. Can a French SAS grant BSPCE to a foreign employee?

A. Who is eligible: the French SAS, the international employee and the ownership chain

The short answer is yes, provided the statutory tests are met. A SAS is a société par actions simplifiée, meaning a simplified joint-stock company. It is one of the French joint-stock forms that can use BSPCE. The legal starting point is Article 163 bis G of the French General Tax Code, which states: « Les sociétés par actions peuvent attribuer des bons de souscription de parts de créateur d’entreprise ». The wording identifies the corporate form, not the passport of the employee.

The corporate form must still be checked against the current conditions. For a French issuer, the company must generally satisfy all of the following:

• It must be a société par actions, such as a SAS, a société anonyme (SA, or public limited company) or a société en commandite par actions (SCA, or partnership limited by shares). A SARL, société à responsabilité limitée, is not a joint-stock company and cannot issue BSPCE while it remains a SARL.
• It must be subject in France to corporate income tax, known as IS for impôt sur les sociétés.
• It must be registered with the registre du commerce et des sociétés (RCS, the French Register of Commerce and Companies) for less than fifteen years. The date that matters is the statutory registration date, which should be checked against the company’s Kbis, the official extract issued through the registry and its filing system.
• At least 15% of its capital must be held directly and continuously by individuals, or by legal entities themselves at least 75% directly held by individuals, subject to the investment-fund exclusions and other wording in Article 163 bis G. This 15% test is particularly important for a French subsidiary wholly owned by an overseas corporation.
• If the shares are admitted to trading, the company must remain below the statutory capitalisation ceiling of 150 million euros. A private company will normally be assessed through the other tests, but the listed-company rule should not be ignored after a public-market transaction.
• It must not have been created through a concentration, restructuring, extension or takeover of pre-existing activities, unless the statutory exception applies. A new French vehicle used to continue an old business should therefore be reviewed before any promise of BSPCE is made.

The current 15% rule is not a drafting detail. A founder may control the French business economically while the French cap table shows only a foreign corporate shareholder. If the individual ownership or qualifying investment-fund analysis fails, the French SAS may be unable to issue BSPCE under the French regime. The correct response is not to describe ordinary warrants as BSPCE. The company must test another instrument and its different tax and corporate consequences.

The current structure of the SAS is confirmed by Article L. 227-1 of the French Commercial Code, which begins: « Une société par actions simplifiée peut être instituée par une ou plusieurs personnes ». The same article makes compatible joint-stock-company rules applicable to a SAS unless a special SAS rule displaces them. That is why a SAS plan needs both a reading of Article 163 bis G and a review of the corporate rules on securities giving access to capital.

Now consider the recipient. Article 163 bis G lists the members of the issuer’s salaried personnel, executives treated as employees for tax purposes, and, for a SAS, members of an equivalent statutory body. A foreign employee can therefore be eligible whether the person is French or foreign, resident in France or resident abroad, if the employment or qualifying corporate-office relationship is real and documented. Nationality is not a substitute for that status. A consultant, independent contractor, adviser or vendor should not be placed in the employee category merely because the commercial relationship is long-term.

The location of the work is a different question. A person employed by the French SAS who works from London, Toronto or Singapore may remain within the corporate description of the issuer’s salaried personnel. That fact does not automatically make the whole future gain French-source, however. The company must record where the activity connected with the award was actually performed and review the applicable tax treaty, payroll and social-security rules. A foreign employee who occasionally travels to France is not treated the same way as someone who performs the whole reference period in France.

The subsidiary rules also matter. Article 163 bis G allows an issuer, subject to the statutory tests, to grant BSPCE to employees and qualifying executives of companies in which it holds at least 75% of the capital or voting rights. The 2026 wording also addresses qualifying sub-subsidiaries. A French parent cannot safely tell an employee of an unrelated foreign parent, an external employer-of-record or a minority investee that the person is eligible solely because the person works on the French project. The ownership chain, the employing entity and the exact grantor must be placed in a written eligibility memo.

A foreign company can itself fall within the extended BSPCE regime under the third bis paragraph of Article 163 bis G when its registered office is in the European Union or in a state or territory that has a tax treaty with France containing an administrative-assistance clause against tax fraud or evasion, and when it is subject to an equivalent corporate tax. This is useful for an international group, but it does not erase the conditions. The foreign issuer must satisfy the French-equivalent eligibility tests, and the beneficiary category must still be correct.

That distinction is often missed in two common structures. In the first, a French SAS employs a foreign engineer directly. The French SAS can consider a BSPCE grant if it passes the issuer tests. In the second, a US, UK or Middle Eastern parent employs the engineer and owns the French SAS. The French SAS cannot simply issue its own BSPCE to that person as if the employment contract were with the French company. The plan may need to be issued by the qualifying issuer and granted to personnel of an eligible subsidiary, or the group may need a different equity instrument. The answer depends on the ownership chain and the governing law of the employing entity, not on the employee’s job title.

B. What the employee actually receives: grant, vesting, exercise and leaver rules

A BSPCE is not an ordinary share on the grant date. It is a personal right to subscribe for a share of the issuer, at an exercise price and during an exercise period fixed under the plan. The right is normally granted without an immediate payment by the employee, but the later subscription for the shares is paid. The bons are legally non-transferable. Only after a valid exercise and the issue of the underlying shares does the person become a shareholder, subject to the articles of association and any shareholders’ agreement.

The capital-law framework starts with Article L. 228-91 of the Commercial Code, which permits joint-stock companies to issue securities giving access to capital. Its central phrase is: « Les sociétés par actions peuvent émettre des valeurs mobilières donnant accès au capital ». Article L. 228-92 then provides that the relevant issues are authorised by the extraordinary general meeting, or AGE for assemblée générale extraordinaire, under the capital-increase provisions. The AGE is not a ceremonial step. It is the body that gives the issue its corporate authority.

Article L. 225-129 of the Commercial Code states: « L’assemblée générale extraordinaire est seule compétente pour décider ». The same logic is expressly repeated for BSPCE by Article 163 bis G, which requires the issue to be authorised by the extraordinary general meeting under Articles L. 225-129 to L. 225-129-6, on the relevant management report and statutory-auditor report. In a SAS, the company must adapt the mechanics to its statutes and governance. Article L. 227-9 says: « Les statuts déterminent les décisions qui doivent être prises collectivement par les associés ». The corporate records should identify the competent decision-maker, the required vote, the reports and any delegation used.

A sound plan separates at least four corporate moments. First, the shareholders authorise the issue and define the maximum number of bons or shares, the exercise window and the principal terms. Second, the authorised corporate body identifies the beneficiaries if the AGE has delegated that power. Third, the company sends each beneficiary an individual grant instrument and plan terms. Fourth, the beneficiary exercises by notice, signs the subscription document and pays the exercise price. The resulting shares are recorded in the securities registers and the cap table, with the appropriate corporate filing and accounting treatment.

The private placement mechanics can be relevant where the issue is reserved to named persons or a defined category. Article L. 225-135 allows the shareholders’ meeting, in the statutory circumstances, to remove the preferential subscription right. It uses the phrase « peut supprimer le droit préférentiel de souscription ». Article L. 225-138 allows the capital increase to be reserved to « une ou plusieurs personnes nommément désignées » and sets an eighteen-month period for that issue route. The plan file should state which route was chosen rather than copying a generic American option template.

The exercise price is fixed on the grant date, not improvised when the employee wants to exercise. Article 163 bis G requires the price to be determined by the extraordinary general meeting or under a valid delegation. If the issuer completed a capital increase in the preceding six months with securities conferring equivalent rights, the price cannot simply ignore that financing. The statutory rule uses the recent issue price as a floor, subject in the permitted circumstances to a discount reflecting a loss of economic value or differences in rights. A valuation memo should explain the last financing, liquidation preferences, share class rights, the date of the grant and any intervening event.

Vesting is usually contractual rather than a separate statutory acquisition process. A plan may provide for monthly or quarterly vesting, a one-year cliff, performance conditions, an exit acceleration or a sale-of-company trigger. It may also define good-leaver, bad-leaver and ordinary-resignation outcomes. Those clauses must be drafted with precision. “The employee keeps the options” is not enough. The plan should say which bons have vested, when they can be exercised, whether exercise is possible after notice or termination, the deadline for a post-departure exercise, and what happens to unvested rights.

The French courts have repeatedly treated the written grant and the exercise window as central evidence. In Court of Appeal of Paris, RG n°21/00121, the court described a plan under which the disputed BSPCE « ne pouvaient en toute hypothèse être exercés » before a specified period. In Court of Appeal of Paris, RG n°23/06533, the court stated that « La perte de chance, si elle est retenue, ne peut être égale à l’avantage ». These decisions do not create a universal vesting timetable. They show why the grant letter, plan, departure notice and evidence of the employee’s ability to exercise must match.

A further example appears in Court of Appeal of Angers, RG n°21/00594, where the court assessed the former employee’s lost chance and wrote that « la cour évalue sa perte de chance à la somme de 3 000 euros ». The financial result was fact-specific. An employee cannot assume that a promised percentage of the company is cash, and an employer cannot assume that a defective leaver clause will always eliminate a claim. In Tribunal judiciaire de Paris, RG n°22/14634, the published facts also record a signed grant declaration, annexes, an exercise request and payment of the subscription price. That sequence is a useful document checklist for an international plan.

Once exercised, the shares remain subject to the SAS’s transfer rules. The current SAS chapter of the Commercial Code includes rules allowing articles of association to impose inalienability, prior approval or compulsory-transfer mechanisms. A foreign employee who expects to sell immediately should therefore read the articles, the shareholders’ agreement, drag-along and tag-along clauses, and any exit waterfall. The exercise right and the liquidity right are different rights. A plan that permits exercise at an exit does not necessarily promise a buyer for the shares.

The same distinction matters after a cross-border move. A leaver clause may expire a right under the contract even if the employee remains within the statutory class of salaried personnel. Conversely, a French-law plan may preserve some vested rights after a departure, while the employee’s new country taxes the award at a different time. The company should analyse the employment contract, the grant document and the destination country before sending a termination notice or an exercise form.

II. How should the French SAS document and tax the plan for an international team?

A. Which corporate and employee documents must be signed before the grant?

The safest file is built before the offer is announced. International investors and employees need an answer that can be reproduced by the company’s French counsel, accountant, payroll provider and foreign tax adviser. A short board email is not a substitute for the corporate file.

The issuer file should contain the following evidence:

1. A current Kbis and the incorporation history showing the RCS registration date. If the company has undergone a merger, contribution, transfer or restructuring, the file should explain why the pre-existing-activity condition is met or why a statutory exception applies.
2. The latest cap table, including the identity and legal form of each shareholder, the direct and indirect ownership percentages, qualifying venture-capital holdings and any voting-right difference. The 15% individual ownership test must be demonstrated, not assumed from the founder’s economic control.
3. Evidence that the issuer is subject to French corporate income tax, its listing or non-listing status, its capitalisation where relevant, and the facts supporting the age and activity conditions.
4. The last financing documents, valuation work, share-class rights and any event that changes the fair value of the ordinary share. These records support the exercise price under Article 163 bis G.
5. The notice and minutes for the extraordinary general meeting, the management report, the statutory-auditor report where required, the maximum number of bons and underlying shares, the validity period and the delegation of authority, if any.
6. The grant register and each individual grant notice, with the beneficiary’s legal name, employing company, role, number of bons, exercise price, grant date, vesting schedule, exercise period, leaver provisions and signature record.

The resolution should not describe a foreign recipient simply as “international staff”. It should identify whether the person is an employee of the issuer, an employee of a qualifying subsidiary or sub-subsidiary, a director treated as an employee for French tax purposes, or a member of a qualifying statutory body. If an overseas company is the employer, the file should map the ownership chain and confirm whether the issuer is the entity granting the bons. The 2026 extension to sub-subsidiaries is useful, but it is not a general permission to reward every contractor in a group.

The employee file should record the employment entity, contract start date, work locations, expected travel pattern, tax residence at grant and likely exercise, social-security affiliation, and the identity of any employer-of-record. These records are not an invitation to collect more personal data than needed. They are the facts required to determine eligibility, the three-year activity threshold and the French-source fraction of the gain. If the person works in France, immigration and work-authorisation questions should be checked separately. BSPCE do not give a foreign national the right to work in France.

The plan should be provided in a language the employee understands, but a translated summary does not replace the French corporate instrument. It should explain that the bons are not shares, are generally non-transferable, require payment at exercise, may lapse under the leaver provisions and may have no liquidity event. It should also explain dilution: exercising the bons creates or delivers shares that can reduce the relative percentage of existing shareholders. A foreign founder should receive a cap-table illustration showing the percentage before the grant, after full exercise and after the next financing.

The shareholders’ agreement should be checked at the same time. The employee may be required to sign an adherence deed, accept transfer restrictions, grant a power of attorney for an exit, or agree to a drag-along. Those obligations should not contradict the BSPCE plan. In a SAS, Articles L. 227-13 to L. 227-18 of the Commercial Code address inalienability, approval, compulsory transfer and price mechanisms. A plan that promises unrestricted sale while the articles impose approval is a litigation risk.

The tax reporting file is equally important. Article 41 V bis of Annex III to the General Tax Code requires the issuer to deliver an individual statement to the beneficiary. The text requires information including « l’identité et l’adresse du bénéficiaire », the dates, number and acquisition price of the shares, the French-source fraction of the exercise gain and the beneficiary’s activity period. The statement is due no later than 1 March of the year in which the beneficiary files the return for the year of exercise, subject to the detailed statutory wording.

The company must also prepare the transmission through the DSN, or déclaration sociale nominative, the French nominative social declaration, or through PASRAU, the prélèvement à la source sur les revenus autres declaration, where the relevant reporting mechanism applies. The company should retain the calculations supporting the French-source fraction and the activity period. A foreign employee should keep the individual statement, grant documents, exercise bulletin, payment proof, valuation material and sale statement together. A later tax authority request is much easier to answer when the data was assembled at grant rather than reconstructed at exit.

The public guidance from BOFiP on BSPCE issuance and characteristics confirms the operational importance of the process. It explains that, when the private-placement route under Article L. 225-138 is chosen, the bons must be issued within eighteen months. The same guidance records that, without an exercise period, the shares cannot benefit from the BSPCE tax and social regime. The period, price and delegation should therefore appear in the resolution and the individual plan, not only in a spreadsheet.

Finally, the company should maintain a grant ledger that can be reconciled to the securities register and to the accounting records. Each exercise should be traceable to the relevant grant, the number of shares, the price paid, the date, the employee’s work-location calculation and the updated cap table. This is particularly important where the French SAS has a foreign parent, a foreign bank account, multiple share classes or a virtual data room used for fundraising. A clean file protects both the company and the employee without promising a tax result that the employer cannot control.

B. How are BSPCE taxed when the beneficiary works or lives outside France?

Cross-border BSPCE taxation must be separated into two gains and three time points. The first time point is the grant. The second is the exercise of the bons, when the employee subscribes for shares. The third is the sale or another disposal of those shares. A foreign employee can be taxed in a country of residence, a country where the work was performed and, in some cases, by French withholding at source. The applicable tax treaty may change the result.

For awards covered by the post-2025 framework, the exercise gain is the difference between the fair value of the shares when the bons are exercised and the fixed exercise price. The sale gain is the difference between the sale price and the fair value at exercise. Article 163 bis G separates these calculations. The first gain is treated through the BSPCE rule, while the second is taxed under the ordinary securities-gain framework. This split matters when the employee exercises in one country and sells after moving to another.

For the exercise gain, the current French rule refers to the flat rate in Article 200 A of the General Tax Code, whose current wording states: « Le taux forfaitaire mentionné au premier alinéa du présent 1 est fixé à 12,8 % ». Article 163 bis G applies a 30% rate where the beneficiary has worked in the issuer or the relevant qualifying group company for less than three years at the relevant disposal date. Where the three-year condition is met, the 12.8% rate or the permitted global option for the ordinary salary scale must be tested against the beneficiary’s residence and filing position. The employee should not apply the rate mechanically without identifying the date of the bons, the date of share subscription and the applicable transitional rule.

The sale gain is distinct. Article 150-0 A of the General Tax Code subjects securities gains to income tax; the current text begins with « les gains nets retirés des cessions à titre onéreux ». The calculation should use the actual sale proceeds and the documented acquisition value of the shares, while the exercise gain should not be counted a second time. The domestic French guidance describes a 12.8% income-tax rate for the general securities gain and separate social-contribution rules. For a non-resident, social contributions and treaty treatment need a separate review. There is no reliable single “all-in BSPCE percentage” for every international employee.

The source question is decisive. Article 182 A ter of the General Tax Code provides that French-source BSPCE advantages « donnent lieu à l’application d’une retenue à la source » when realised by a person who is not tax-resident in France. The administrative guidance explains that the French-source part of the exercise gain is generally determined by reference to the activity performed in France during the relevant period. Its practical expression is « au prorata de l’activité exercée en France ». The issuer should therefore keep workday evidence rather than use the employee’s nationality, bank account or employer headquarters as a proxy.

Consider four practical situations:

Fact pattern	Why it matters	Action before exercise or sale
Foreign national, French employment contract, work performed entirely in France	The corporate eligibility test may be satisfied, but the French payroll and tax reporting file must identify the French activity period.	Confirm the grant, exercise price, vesting and individual statement; check French residence and ordinary filing rules.
Employee of the French SAS working partly in France and partly abroad	The French-source fraction of the exercise gain may not equal the whole gain. Travel days and the reference period become relevant.	Prepare a day-count schedule and apply the tax treaty with the residence country before the sale.
Employee works exclusively abroad for a French issuer	The employee may still be in the issuer’s salaried personnel, but residence-country tax, treaty allocation and French-source analysis must be separated.	Obtain a written cross-border tax analysis and coordinate the French issuer’s reporting with foreign payroll advice.
Employee moves abroad after grant or leaves before exercise	The plan’s leaver clause, the three-year test, the exercise window and the withholding duty may all change.	Review the plan before termination, preserve the valuation and work-location history, and document any permitted exercise after departure.

For a non-resident, the French withholding mechanism is not the same as a final answer on worldwide taxation. The text of Article 182 A ter sets the French mechanism for the French-source advantage. The treaty with the employee’s country of residence may allocate employment income differently, provide relief from double taxation or require a foreign return. A UK resident, a US citizen living in France, a Swiss commuter and a Singapore-based employee cannot be placed under one generic paragraph. The company should ask for the country of residence and the work locations before the employee signs the exercise notice.

The three-year rule should also be documented with care. The current Article 163 bis G wording aggregates, in the statutory cases, activity or corporate-office periods in the issuer, qualifying subsidiaries and qualifying sub-subsidiaries. A group cannot count an unrelated consultancy as salaried activity, but it may be able to count a qualifying employment period in a group company. The individual statement required by Article 41 V bis asks for the period of activity and the date of departure, making the underlying chronology a core tax record.

A foreign employee who returns to France may ask whether the shares can be placed in a PEA, or plan d’épargne en actions, the French equity savings plan. The issue was examined by the Conseil d’État in 8 December 2023, n°482922. The court held, in the context of the statutory list of eligible PEA investments, that « ni ces dispositions, ni aucune autre disposition législative ou réglementaire ne font obstacle » to using money in the plan to acquire eligible shares on exercise, even though the bons themselves are not placed in the plan. This is a narrow point, but it illustrates the need to distinguish the warrant, the shares and the tax wrapper.

French case law also warns against treating a theoretical valuation as cash. In the Paris and Angers decisions cited above, the courts assessed whether the employee had actually lost a chance to exercise, considered the contractual exercise period and discounted the uncertainty of a future exit. The employee’s country of residence may add another uncertainty: a foreign tax authority can tax the exercise gain before a sale provides liquidity. The plan should disclose the possibility of a tax bill at exercise, the need to fund the subscription price and the absence of a guaranteed buyer.

The company should run a cross-border closing checklist before each exercise. It should update the cap table, confirm that the grant was valid when made, verify that the bons have not expired, calculate the number of vested bons, obtain the exercise notice and payment, record the share issue, produce the individual tax statement, calculate the French-source fraction, determine whether Article 182 A ter withholding applies, and provide the documents needed for the employee’s residence-country return. If the employee sells immediately after exercise, the two gains must still be shown separately.

That process is more demanding where the employee is employed through an employer-of-record. The contractual employer may be a foreign service company, while the French SAS directs the work. The company should not assume that the commercial arrangement creates the employee relationship required by Article 163 bis G. It should first identify the legal employer and the qualifying entity, then review the labour, payroll, permanent-establishment and social-security effects. An equity award cannot repair a misclassified employment structure.

For a foreign parent, the best practice is to put the plan on a group map. Show the issuer, each direct subsidiary, each sub-subsidiary, the percentage of capital and voting rights, the employing company and the employee’s work country during each vesting period. Note the dates of financings and the share value used for each grant. That map allows the French lawyer and the foreign tax adviser to answer the same question from the same facts. It also makes the French reporting statement under Article 41 V bis defensible if the employee later moves or exercises after leaving the group.

Conclusion

A French SAS may grant BSPCE to a foreign employee, but the answer is conditional. The company must first pass the current issuer tests, including the 15% individual-ownership condition, the fifteen-year RCS limit, corporate-tax status, the activity history and any market-capitalisation test. It must then prove that the recipient is an employee or another listed beneficiary of the issuer, a qualifying subsidiary or a qualifying sub-subsidiary. A foreign passport is not a problem; an undocumented employment or ownership chain is.

The plan should be approved by the correct corporate body, supported by the required reports, priced against current share value and recent financings, and drafted around vesting, departure, exercise and exit mechanics. The employee should receive a clear English explanation of the French instrument while the French resolution, register and tax records remain complete. Before exercise, the company must split the exercise gain from the later sale gain and map the employee’s residence and workdays. For a non-resident, French withholding and treaty allocation should be checked before the transaction, not after the payment has been made.

Foreign founders and international employees should treat the grant as a corporate transaction, an employment document and a cross-border tax event at the same time. A targeted review of the cap table, ownership chain, grant file, work locations and exit provisions is usually less costly than reconstructing the plan after a financing, departure or sale.