A founder can live in London, New York, Dubai or Brussels, remain covered by a foreign social-security system, and still be appointed to manage a French company. The difficult question is not usually whether the appointment is possible. It is how the company must classify each payment made to that person, which country’s social-security legislation applies to the underlying activity, and whether a French employer levy remains due even when the director does not receive French social-security benefits. This distinction matters when an URSSAF (the French body that collects social-security contributions) questions a payroll file or treats a payment as a forfait social.
This article focuses on the narrow situation in which a foreign founder or director is insured abroad and a French company faces a French social-contribution question. It separates a SAS mandate from an employment contract, dividends, board fees, expense reimbursements and an actual foreign secondment. It also explains why an A1 certificate can be decisive for the applicable legislation without being a universal exemption from every French levy. The practical objective is to give a foreign-owned company a defensible classification file, connected to its wider French company formation and corporate structuring plan.
The analysis is based on the legislation and decisions checked for this publication. It is necessarily fact-sensitive: the result can change with the director’s real powers, the place where work is performed, the identity of the paying entity, the wording of a bilateral agreement and the exact nature of the payment.
I. When does French social security apply to a director who lives abroad?
A. Can a foreign founder hold a French SAS mandate without becoming a French resident?
Yes, in principle. A foreign founder may own shares in a French company and may be appointed as its president or another corporate officer without becoming a French tax resident. Company law, tax residence and social-security affiliation are separate questions. A founder who never moves to France can therefore remain the shareholder and statutory president of a French SAS (société par actions simplifiée, a simplified joint-stock company), subject to any immigration or work-authorisation rules that may apply to the person’s physical activity in France.
The starting point is the company’s legal representation. Article L. 227-6 of the French Commercial Code states that La société est représentée à l’égard des tiers par un président désigné dans les conditions prévues par les statuts.
The same provision gives the president broad powers to act for the company within its corporate purpose and makes statutory limits generally unenforceable against third parties. The rule can be read on Légifrance, Article L. 227-6 of the Commercial Code. Nothing in that company-law rule makes French residence a condition of appointment.
The founder’s place of residence may nevertheless matter to other parts of the project. A director who travels regularly to France may trigger immigration, permanent-establishment, tax-residence or corporate-management questions. A director who signs contracts from abroad may create evidence about where decisions are made. A director who is also employed by a foreign parent may have a second relationship with that parent. None of those facts, taken alone, answers the social-security question. They must be mapped against the legal mandate and the actual work performed.
The position is also possible where the president is not an individual but a corporate shareholder or another legal entity. Article L. 227-7 of the Commercial Code provides that, where a legal person is appointed president or director of a SAS, its own directors are subject to the same conditions and obligations and incur the same civil and criminal responsibilities as if they were president or director personally, without prejudice to the legal person’s joint liability. The complete text is available on Légifrance, Article L. 227-7 of the Commercial Code. That provision does not turn every payment from the French company into a salary: it identifies responsibility and representation, while the payment still has to be classified.
For a foreign founder, the public record should tell the same story as the private documents. The Kbis is the official extract traditionally issued by the commercial court registry, known as the greffe. The RNE (Registre national des entreprises, the national register of businesses) and the INPI (Institut national de la propriété industrielle) formalities portal now play a central role in business registration and changes. The company’s statutes, appointment decision, registered information and delegation documents should identify the president and the scope of the office consistently. A discrepancy between the Kbis, shareholder resolutions, invoices and payroll records can invite questions about whether the alleged director’s mandate is genuine or whether a different activity is being paid.
French company law also distinguishes a statutory mandate from a contract of employment. A president may receive instructions from shareholders, report to the collective body and be bound by the company’s statutes. Those features do not automatically create an employment relationship. Conversely, a person called a “director” may actually perform technical work under the authority of an employer. The factual test matters where a foreign parent pays the founder, seconds the founder to France, or invoices management services through another company.
Article L. 8221-6 of the Labour Code creates certain presumptions that a person registered in specified business registers or acting as a director is not linked to the principal by an employment contract for the activity concerned. The text begins: Sont présumés ne pas être liés avec le donneur d’ordre par un contrat de travail
. That presumption is not an absolute immunity. It can be displaced when the facts establish a relationship of subordination, and it does not erase the French company’s separate statutory obligations. The text is available on Légifrance, Article L. 8221-6 of the Labour Code.
The next question is the applicable social-security legislation. Within the European Union, the European Economic Area and Switzerland, and in the situations covered by the relevant arrangements with the United Kingdom, Regulation (EC) No 883/2004 coordinates national systems. Its Article 11(1) states: Persons to whom this Regulation applies shall be subject to the legislation of a single Member State only.
The complete English text is available on EUR-Lex, Regulation (EC) No 883/2004. The rule prevents overlapping compulsory systems, but it does not allow the company or the founder to choose a country informally.
An A1 certificate is the portable document used in the European coordination framework to evidence the legislation that applies to a worker in the situations covered by the regulations. The official CLEISS explanation describes it as a document that attests to the applicable legislation and explains that it may be used for secondment, activity in several Member States or a person working in one country while seeking exemption in another. The CLEISS A1 guidance also identifies the competent bodies that issue the certificate; CLEISS itself does not issue the certificate.
For a director, the certificate must match the activity described. A foreign insurance card, a company letter saying that the founder is insured abroad, or a tax-residence certificate is not the same thing as an A1 determination. The file should show the person’s status, the relevant employer or self-employed activity, the countries involved, the period covered and the legal route by which the foreign institution determined the applicable legislation. If there are simultaneous activities for a French company and a foreign parent, the facts should be submitted to the competent international-mobility service rather than assumed.
Outside the European coordination area, the analysis depends on a bilateral social-security agreement, if one exists, or on the domestic rules that apply in the countries concerned. The document may not be called A1. The competent institution, form, scope and exemptions can differ. The company should therefore identify the agreement and article relied upon, not merely state that the founder “pays insurance at home”. The French URSSAF international mobility guidance directs employers toward the applicable certificate or agreement route and warns that the legislation is determined from the working situation.
B. Does remuneration trigger French payroll when the director is insured abroad?
The payment must be analysed before the certificate is used. French law does not treat the words “management fee”, “director fee”, “salary”, “bonus”, “profit distribution” and “reimbursement” as interchangeable. The accounting label is evidence, but it is not conclusive. The company should identify the legal source of the payment, the service or office for which it is paid, the person who decides it, the period to which it relates and whether the amount is available to the director directly or through another entity.
For a remunerated president or director of a SAS, Article L. 311-3, 23° of the Social Security Code places Les présidents et dirigeants des sociétés par actions simplifiées et des sociétés d’exercice libéral par actions simplifiées
among the persons subject to the general social-security system. The current text is available on Légifrance, Article L. 311-3 of the Social Security Code. In practical terms, when French legislation applies and a payment remunerates the mandate, the company normally has a French payroll and contribution question even though the president is a shareholder, a foreign national or resident abroad. A shareholder’s control of the company does not by itself convert a SAS mandate into self-employment under the French independent-worker regime.
Article L. 242-1 provides the ordinary base rule. It states that social-security contributions due for persons referred to in Articles L. 311-2 and L. 311-3 are based on activity income taken into account for the base defined in Article L. 136-1-1, and are due for the periods in which that income is attributed. The short operative text can be checked on Légifrance, Article L. 242-1 of the Social Security Code. Article L. 136-1-1 is deliberately broad: it covers sums and benefits due in return for or on the occasion of work, an activity, or the exercise of a mandate or elected function, regardless of the name used. The statutory wording is dus en contrepartie ou à l’occasion d’un travail, d’une activité ou de l’exercice d’un mandat
, in Légifrance, Article L. 136-1-1 of the Social Security Code.
That ordinary payroll analysis is not the same as the forfait social. Article L. 137-15 describes the forfait social as an employer contribution applying to activity income subject to the contribution referred to in Article L. 136-1 but excluded from the ordinary social-security contribution base under Article L. 242-1, subject to statutory exceptions. The opening words are: Les revenus d’activité assujettis à la contribution mentionnée à l’article L. 136-1 et exclus de l’assiette des cotisations de sécurité sociale
. The current provision is available on Légifrance, Article L. 137-15 of the Social Security Code.
This produces an important two-stage test. First, ask whether French legislation governs the underlying activity and whether the payment remunerates the SAS mandate. If yes, an ordinary French social-security base may apply under Article L. 242-1. Second, ask whether the specific payment is excluded from that ordinary base while remaining within the activity-income and CSG perimeter described in Article L. 137-15. Only then does the forfait social become the relevant employer-side levy. A company should not use “forfait social” as a convenient substitute for payroll, and it should not assume that an A1 certificate automatically removes a levy that the statute treats as an employer charge on a different base.
The leading recent warning is Cour de cassation, Second Civil Chamber, 6 June 2024, no. 21-23.396, published in the Bulletin. The dispute concerned a French société anonyme and remuneration paid under the Commercial Code provisions governing members of its supervisory board; the person was affiliated to the Belgian social-security system. The case was not a direct ruling that every SAS president’s salary is subject to the forfait social. Its value is narrower and more useful: foreign affiliation and non-residence did not, on those facts, dispose of an employer-side forfait social issue.
The Court expressly reproduced the applicable statutory mechanism and held that the French companies concerned were subject to the forfait social on the relevant remuneration regardless of the recipients’ nationality or tax residence. Its analysis states: la résidence fiscale du bénéficiaire de la rémunération et son affiliation à un régime de sécurité sociale étranger n’étaient pas un obstacle au principe de l’assujettissement
. The Court also relied on the fact that the company alone was liable for the charge and that the charge did not reduce the director’s remuneration. In other words, a foreign social-security affiliation is not a universal answer to a French employer levy. The exact legal classification and the economic effect of the payment remain decisive.
The limits of that decision must be respected. The Court was dealing with a société anonyme, board remuneration and the version of the legislation applicable to the control period. A remunerated SAS president ordinarily raises the Article L. 311-3 and L. 242-1 payroll analysis first. The 2024 decision should therefore be used as a risk alert when a French company claims that foreign affiliation automatically eliminates every French charge, particularly for board fees, benefits or other payments outside the standard social-security base. It should not be quoted as if it had decided the exact tax and social treatment of a conventional SAS president’s monthly salary.
The distinction between the mandate and an employment contract is equally important. In Cour de cassation, Social Chamber, 2 June 2016, no. 14-29.727, the decision concerned a person who had a contract with a group holding company and several unpaid mandates in subsidiaries, including a presidency of a SAS. The factual reasoning recorded that aucune rémunération n’a été prévue pour l’exercice de ce mandat
and concluded that the evidence did not establish a subordinate employment relationship for the SAS mandate. The point for a foreign-owned group is practical: a parent-company employment contract, a subsidiary mandate and a services invoice must be separated by actual duties, authority and payment evidence. A foreign parent’s instructions about shareholder reporting do not automatically prove a French employment contract, but detailed operational control can change the analysis.
A later payment may also be relevant to the period in which the work was performed. In Cour de cassation, Second Civil Chamber, 24 May 2017, no. 16-18.834, the case involved a director of a SELAS, a simplified joint-stock professional company. The Court stated: les présidents et dirigeants des sociétés d’exercice libéral par actions simplifiées sont assujettis au régime général de sécurité sociale
. It accepted that the person was regularly affiliated from the date on which he began the remunerated activity even though payment occurred later. The case involved a SELAS rather than an ordinary commercial SAS, so the facts should not be overextended; the useful principle is that timing and the intended remuneration of the mandate must be reconstructed, not inferred from one bank-transfer date.
Dividends are another separate category. A dividend is normally a distribution of profit attached to shares, not remuneration for exercising the president’s office. It is therefore not automatically converted into payroll merely because the recipient is the president. The company must still examine income-tax withholding and social levies on investment income, and it must ensure that the distribution is legally authorised and supported by accounts. The official Service-Public guidance on SAS taxation distinguishes mandate remuneration from dividends and explains that a president’s mandate remuneration is taxed as salary while dividends follow their own regime. Calling a monthly management payment a dividend does not change its legal nature.
Expense reimbursements should also be kept separate. Article L. 136-1-1 excludes professional-expense reimbursements made within the statutory and regulatory conditions from activity income. The company should therefore retain receipts, travel dates, business purpose, approval and payment evidence. A flat amount paid every month without supporting expenses is more difficult to defend as a reimbursement. The same evidence matters when the director lives abroad, because travel between the founder’s home country, France and other group locations may otherwise be mistaken for proof of a different work location or a concealed benefit.
Tax residence does not settle social affiliation. The French tax administration’s guidance for a non-resident majority manager of a SARL (société à responsabilité limitée, a private limited company) explains that treaty analysis can depend on the convention and the wording applicable to managers. That guidance is available on impots.gouv.fr. A SAS president may face a different domestic and treaty analysis, but the business lesson is the same: document tax residence, social-security legislation and the corporate role independently. A foreign tax certificate is not an A1 certificate, and an A1 certificate is not a ruling on income-tax residence.
II. How should a foreign-owned company document and challenge the forfait social?
A. Which payroll, social-security and corporate documents should the company prepare?
A defensible file should allow a reviewer to answer five questions without reconstructing the business from emails: who is the director, what office is held, what work was done, which entity paid, and why the chosen French or foreign social-security treatment follows from the applicable rules. The documents should be assembled before the first payment, not after an URSSAF request.
- Prove the corporate role. Keep the signed statutes, appointment resolution, acceptance of office, registered extract, shareholder or board minutes and any delegation of authority. Article L. 227-6 makes the president the company’s representative toward third parties, so contracts and bank mandates should not show a different person exercising all management powers without explanation. If a legal person is president, map the natural persons behind it under Article L. 227-7. The Kbis, RNE record, INPI filing and internal minutes should tell one consistent story.
- Approve and describe remuneration. Keep the resolution fixing the amount or method, the effective date, the frequency, the currency and the nature of every payment. Use separate approval and accounting lines for mandate remuneration, a technical employment contract, dividends, current-account interest, board fees and expense reimbursements. If the mandate is unpaid, record that decision clearly and review whether a later invoice or bonus contradicts it.
- Map the actual activity. Prepare a short calendar showing where the director worked, where meetings occurred, which entity instructed the person, which company benefited from the work and whether the person had another employment or self-employed activity. Add the foreign parent’s employment contract and any secondment or services agreement. A residence address alone cannot replace this activity map.
- Validate the foreign coverage document. Retain the A1 certificate or the applicable bilateral-agreement certificate, the application, the institution’s decision, the covered period, the stated activity and any renewal. The document should correspond to the director’s real role. If the certificate covers only a foreign employment relationship but the French company separately pays a statutory mandate, obtain a written analysis before treating the two payments as one activity.
- Keep a French payroll trail where required. Retain payslips, payroll calculations, payment proofs, the company’s URSSAF account records and the DSN (Déclaration sociale nominative, the monthly electronic social-security declaration). If a French payroll is not filed, the reason should be supported by the applicable-law decision rather than a general statement that the director is “insured abroad”. A payment routed through a foreign bank does not, by itself, change the payer or the legal nature of the remuneration.
- Separate tax evidence. Keep the director’s tax-residence certificate, treaty analysis, withholding records and, where relevant, the forms used for non-resident taxation. Do not place a tax document in the file as if it proved social-security affiliation. The company should reconcile the income-tax treatment with the payroll and dividend records while recognising that the regimes have different connecting factors.
- Preserve the business substance. Retain contracts signed by the director, board agendas, decision logs, travel records, expense receipts, bank approvals and correspondence showing the person’s real authority. The purpose is not to create paperwork for its own sake. It is to show whether the person acted as a statutory officer, an employee, an independent service provider, a shareholder receiving a distribution, or more than one of those in genuinely separate capacities.
The following working matrix helps avoid the most common category error:
| Payment or relationship | First legal question | Document to prioritise |
|---|---|---|
| SAS president’s mandate remuneration | Does French legislation apply to the mandate, and does the amount enter the ordinary social-security base? | Appointment and remuneration resolutions, payroll file, applicable-law certificate |
| Foreign parent employment contract | Where is the employment performed and which employer retains the power of direction? | Employment contract, secondment terms, A1 or bilateral certificate, activity calendar |
| Technical role alongside the mandate | Are the duties distinct and performed under a genuine relationship of subordination? | Separate job description, reporting line, working evidence, separate remuneration |
| Dividend | Is there distributable profit and a valid shareholder decision rather than remuneration for office? | Annual accounts, approval and distribution resolution, payment and tax records |
| Expense reimbursement | Is the amount a documented professional expense within the applicable limits? | Invoice or receipt, business purpose, travel evidence and approval |
The table does not replace the conflict-of-laws analysis. It prevents the company from beginning with the wrong label. A director can have several relationships, but each must be supported by its own legal and factual evidence. The presence of an A1 certificate may answer which national social-security legislation covers a particular activity; it does not turn dividends into remuneration, make a statutory mandate disappear from the company register, or validate an unsupported expense.
Foreign-owned companies should also understand the employer route. The official URSSAF Foreign Companies Service explains that a company headquartered abroad may still have to declare and pay French social-security contributions for people covered by the French system, and that international mobility services determine the applicable legislation in complex cross-border situations. A French subsidiary is not relieved of its own obligations because its shareholder is abroad. Conversely, a foreign parent should not register the founder under a French payroll code without first deciding which entity employs the person and which activity is being paid.
Finally, the company should record its legal conclusion in a dated internal memo. The memo should name the payment, cite the relevant articles, identify the territory and period, explain the A1 or agreement evidence, state the treatment selected and list the facts that would require a fresh review. That discipline is particularly useful when the founder changes residence, the company starts paying a salary after a period of unpaid office, the foreign parent changes the employment arrangement, or the director begins spending more time in France.
B. What should the company do after an URSSAF adjustment or a rejected exemption?
An URSSAF adjustment should be treated as a deadline-driven legal dispute, not as an accounting query to be answered with a replacement label. Article L. 243-7 of the Social Security Code gives the collection bodies authority to check compliance and states that, in the course of a control, the agents are not bound by the qualification given by the controlled person. The company must therefore explain the facts and the legal classification together. A contract headed “consultancy” will not carry the case if the documents show a remunerated French mandate; an A1 certificate will not carry the case if it does not cover the activity being paid.
The company should first preserve the full control file: notice, scope, documents requested, letter of observations, calculations, response deadline, follow-up correspondence and any formal notice. Article R. 243-59 governs the contradictory phase. It provides that the controlled person has a period of thirty days to respond to the letter of observations, which may be extended to sixty days at the person’s request, and that the letter must mention the possibility of being assisted by a chosen adviser. The text is available on Légifrance, Article R. 243-59 of the Social Security Code. The company should request the extension where the cross-border file requires translations, foreign-institution confirmation or a reconstruction of several years of payments.
The response should be organised by adjustment item. For each amount, state the payment’s legal source, beneficiary, period, payer, accounting entry, place of activity, applicable social-security legislation and supporting documents. Then address the URSSAF reasoning directly. If the company argues that French ordinary contributions are excluded because another system applies, identify the precise coordination rule and certificate. If it argues that the forfait social is not the correct levy, demonstrate whether the payment is in or out of the Article L. 242-1 base and why. If the amount is a dividend or reimbursement, attach the corporate approval and financial evidence instead of merely changing its description.
The 2024 decision on the forfait social shows why economic effect should be addressed explicitly. In the facts considered by the Court, the company was the debtor of the employer charge, the charge did not create double contributions payable by that company in Belgium, and it did not alter the remuneration fixed for the recipient. A company in a different factual situation should explain why its case differs: for example, which entity pays foreign contributions, whether the same activity is covered twice, whether the payment is actually within the ordinary French base, and whether the alleged levy is being passed unlawfully to the director. The argument must be evidence-led, because the absence of a French benefit alone was not enough in the cited case.
If the URSSAF position concerns a hidden employment relationship or a management payment routed through a related company, use the factual distinction developed in no. 14-29.727. The Court’s decision records that the parent company retained the employment relationship and that the evidence did not establish separate technical duties or subordination in the subsidiary mandates. That does not create a safe harbour for group structures. It tells the company what must be proved: the identity of the employer, the actual technical duties, the authority exercised, the independence of the corporate office and the separate remuneration.
If the dispute concerns the status of the president or director of a SAS or SELAS, cite the statutory rule and the 2017 decision carefully. The decision in no. 16-18.834 involved a SELAS and confirmed the general-system affiliation of its president or director from the date of the remunerated professional activity. It is useful where an institution seeks to send the person to a different professional scheme merely because payment was delayed. It does not answer the separate question of whether a foreign A1 or bilateral certificate changes the applicable legislation for a particular cross-border activity.
A mise en demeure, meaning a formal demand to pay, requires separate attention. Article L. 244-2 of the Social Security Code provides that, outside the criminal-prosecution situation described in the text, the warning is replaced by a formal demand sent by registered letter or another method giving a certain date of receipt, and that the content must be precise and reasoned. The provision is available on Légifrance, Article L. 244-2 of the Social Security Code. Check the periods, bases, rates, levy type, prior observations and receipt date. Do not assume that an imprecise demand is automatically void; identify the specific prejudice or legal defect and preserve every deadline.
Where the company contests a decision of a social-security body, the prior administrative route may apply. Article R. 142-1 states that a claim against decisions of the social-security bodies is submitted to a commission de recours amiable, or CRA (amicable appeals commission), and that the commission must be seized within two months of notification of the decision. The official text is available on Légifrance, Article R. 142-1 of the Social Security Code. The company should verify the exact notification, the competent body and any special procedural route with counsel, then send a reasoned appeal with proof of dispatch. A technical disagreement about the applicable legislation should not be left to an informal telephone exchange.
The response file should contain a short chronology. Start with incorporation and the director’s appointment. Identify each change of residence, foreign employment, certificate period, French visit pattern, remuneration decision, payroll filing and URSSAF contact. Add a payment schedule that separates ordinary mandate remuneration, dividends, expenses and group-company payments. This makes it possible to argue both merits and limitation of scope without asking the reviewer to infer the story from bank statements.
A company should also decide whether it needs a prospective written position. When a future arrangement will involve a foreign parent, a French subsidiary, a director working in several countries and a material recurring payment, seeking a documented position from the competent social-security or international-mobility service can be more valuable than correcting several months of payroll later. The request should disclose the unfavourable facts as well as the favourable ones. A conclusion based on an incomplete description may not protect the company when the real activity differs.
Three practical errors should be avoided. First, do not submit only the director’s foreign insurance card and tax-residence certificate. Second, do not use a dividend or service invoice to disguise recurring remuneration for a French statutory office. Third, do not answer a letter of observations with a general statement that EU law prohibits double contributions. The company must show the applicable activity, the relevant period, the correct payer and the precise French provision in dispute. The 2024 case demonstrates that a charge can be treated as a company-side levy even when the recipient is insured elsewhere; the ordinary SAS payroll rules demonstrate that the reverse classification can also be wrong.
For a foreign founder, the best challenge is therefore often a structured alternative analysis. The company can argue, in the first alternative, that the payment is outside the ordinary French base because the person is covered by a properly evidenced foreign system for that activity. In the second, that the payment is ordinary SAS mandate remuneration and must be treated under the correct payroll rules rather than as a forfait social. In the third, that the payment is a legally approved dividend or a properly supported reimbursement. Each alternative should be tied to a different factual record. That approach is stronger than asking the reviewer to accept one label that the documents do not support.
Conclusion
A non-resident foreign founder can manage a French SAS, but the absence of French residence does not answer the social-security question. The company must classify the office and each payment, identify where the underlying activity occurs, obtain the correct A1 or bilateral-agreement evidence where relevant, and distinguish ordinary mandate payroll from the forfait social, dividends, employment contracts and reimbursements. The 2024 Cour de cassation decision is a clear warning that foreign affiliation does not automatically eliminate an employer-side French levy; it is not a licence to apply the same result mechanically to every SAS salary. A coherent corporate, activity, payroll and cross-border evidence file is the company’s best protection before and during an URSSAF control.
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