You formed a company in France from abroad, the Kbis arrived — that is the official certificate of existence issued by the greffe, the clerk’s office of the commercial court — and now the business needs cash. Rent for the Paris office is due, the first salaries must be paid through the French payroll system, and the supplier will not wait. You open your banking app in London, New York or Dubai and you hesitate: do you wire the money as a loan to your own company, or do you increase the share capital? The choice feels technical, but it decides when you will see your money again, how much tax the company will pay on it, and whether a French court will let you take it back when you need it. Many foreign founders get this wrong in the first year. Some leave large credit balances on a shareholder current account with no written agreement and discover later that the funds are frozen by a blocking clause they never read. Others inject capital that becomes almost impossible to withdraw without a formal reduction procedure. This guide explains both routes in practical order: first, how to put money into your French SAS or SARL from abroad without creating a legal trap, and second, how to take it back out through repayment, interest, dividends or liquidation, with the French tax rules that apply at each step and the official texts that govern them.

I. How to Put Money Into Your French Company From Abroad Without Creating a Legal Trap

Every euro you send to your French company takes one of two legal forms: either a loan recorded on your shareholder current account, known in France as the compte courant d’associé, or a permanent contribution to the share capital. French law treats these two channels very differently, and the paperwork you sign on day one determines your freedom later. Founders who read our overview of setting up a company in France as a foreign founder already know the registration steps; this article deals with what happens next, when real money has to move across the border.

A. Can You Simply Lend Money to Your Own French Company From Abroad

Yes, and in practice the shareholder current account is the most used funding tool for foreign-owned French companies. The mechanism is simple: instead of subscribing new shares, you transfer funds to the company and the amount is credited to a current account opened in your name in the company’s books. Legally, this advance is analysed as a loan. The French Civil Code states the core rule in one sentence: “L’emprunteur est tenu de rendre les choses prêtées, en même quantité et qualité, et au terme convenu.” That rule comes from Article 1902 of the Civil Code, and it means the company is your borrower and must repay you under the agreed terms. Unlike a capital contribution, the money never becomes the company’s permanent property; it remains a debt owed to you, which is exactly why founders like it when they want to keep control of their cash.

But this flexibility has strict boundaries, and the first one concerns the direction of the loan. French company law forbids loans in the opposite direction: the company lending to its own managers. In a SARL, the rule is laid down by Article L.223-21 of the Commercial Code: “A peine de nullité du contrat, il est interdit aux gérants ou associés autres que les personnes morales de contracter, sous quelque forme que ce soit, des emprunts auprès de la société, de se faire consentir par elle un découvert, en compte courant ou autrement, ainsi que de faire cautionner ou avaliser par elle leurs engagements envers les tiers.” In other words, you as a foreign individual founder or manager can lend to the company, but the company cannot lend to you, and any contract that tries to do so is void. The same prohibition exists for public limited companies under Article L.225-43: “A peine de nullité du contrat, il est interdit aux administrateurs autres que les personnes morales de contracter, sous quelque forme que ce soit, des emprunts auprès de la société, de se faire consentir par elle un découvert, en compte courant ou autrement, ainsi que de faire cautionner ou avaliser par elle leurs engagements envers les tiers.” Note the important exception hidden in both texts: legal entities, meaning companies as opposed to individuals, are not covered by the ban. When your foreign parent company lends to its French subsidiary, both sides are legal entities, so the prohibition does not apply and the loan is valid in principle. When you lend as an individual, you are the creditor, not the borrower, so the ban does not hit you either. The danger zone is only the reverse flow, where an individual founder treats the company treasury as a personal wallet.

The second boundary is the procedure for related-party agreements, the conventions réglementées. A shareholder loan is an agreement between the company and one of its shareholders or managers, so it must be disclosed and approved. In a SARL, Article L.223-19 of the Commercial Code provides: “Le gérant ou, s’il en existe un, le commissaire aux comptes, présente à l’assemblée ou joint aux documents communiqués aux associés en cas de consultation écrite, un rapport sur les conventions intervenues directement ou par personnes interposées entre la société et l’un de ses gérants ou associés.” The shareholders then vote on that report, and the interested person cannot take part in the vote. In a SAS, the equivalent rule is Article L.227-10: “Le commissaire aux comptes ou, s’il n’en a pas été désigné, le président de la société présente aux associés un rapport sur les conventions intervenues directement ou par personne interposée entre la société et son président, l’un de ses dirigeants, l’un de ses actionnaires disposant d’une fraction des droits de vote supérieure à 10 % ou, s’il s’agit d’une société actionnaire, la société la contrôlant au sens de l’article L. 233-3.” In a one-person company, an SASU or EURL owned entirely from abroad, the formality is lighter: a simple mention in the decision register is enough. Foreign founders often skip this step because they own one hundred percent of the company and see no point in reporting to themselves. That is a mistake. The report creates the paper trail that proves the loan exists, fixes its amount and its terms, and protects you if a tax inspector, a future co-shareholder or a bankruptcy trustee later questions the transfer. A wire transfer reference alone is weak evidence; a signed loan agreement plus the annual approval of the current account balance is strong evidence.

The courts take these agreements seriously. In a September 2025 ruling, the Commercial Chamber of the Court of Cassation recalled the sanction for bypassing the approval procedure: “sans préjudice de la responsabilité de l’intéressé, les conventions visées à l’article L. 225-86 et conclues sans autorisation préalable du conseil de surveillance peuvent être annulées si elles ont eu des conséquences dommageables pour la société.” That decision, Cass. com., 17 September 2025, No. 23-20.052, concerned a different type of agreement, but the principle travels: an undisclosed related-party deal can be cancelled when it harms the company, and the interested manager bears personal liability. For your shareholder loan, the practical lesson is direct: put it in writing, have it approved, and keep the bank proof of every transfer from abroad, including the foreign exchange slips, so the origin of the funds is never in doubt.

Three clauses deserve your full attention before you sign. First, the repayment trigger: is your advance repayable on demand or blocked for a fixed period? Many French companies insert a clause de blocage, a lock-up clause, often because a bank granting credit to the company demands that shareholder funds stay in place as quasi-equity. If you signed such a clause, you cannot claim the money back before the agreed date, even if you need it urgently abroad. Second, the interest rate: a zero rate is legal, but it means your money works for free, while a written rate gives you a return and, as Part II explains, may be partly deductible for the company. Third, subordination: some agreements state that your current account will only be repaid after the banks. Read that line twice, because in a distress scenario it decides whether you recover anything at all. A five-page agreement reviewed before the first wire is worth more than a year of litigation after the money is stuck.

B. Should You Increase the Share Capital Instead of Lending From Abroad

A capital increase is the heavy alternative to the current account: instead of lending, you subscribe new shares and the money becomes the company’s permanent equity. The procedure depends on the company form. In a SARL, the capital increase is voted by the shareholders under the majority rules for amending the articles, with a statutory auditor’s report in some cases and a formal filing at the greffe followed by publication in a legal notices journal and registration in the National Business Register, the Registre National des Entreprises managed through the INPI single window. In a SAS, the process is more flexible because the articles can allocate powers freely, but the core steps remain: a collective decision of the shareholders, possible preferential subscription rights for existing shareholders, payment of the new contributions into a blocked bank account or before a notary, an auditor’s certificate, and the same filing and publication chain ending with an updated Kbis. Every step leaves a trace in the BODACC, the Official Bulletin of Civil and Commercial Announcements, which means the increase is public and opposable to third parties. For a foreign founder, the practical cost is time and formality: allow several weeks, a French bank account capable of receiving the funds, and sworn translations if your proof of identity or company documents are in a foreign language.

Why would you choose this heavier route? Three reasons stand out. First, equity strengthens the balance sheet permanently. Banks, landlords and major clients read the Kbis and the accounts: a company with 50,000 euros of share capital inspires more confidence than one with 1,000 euros of capital and 49,000 euros of shareholder loans that could be withdrawn tomorrow. If your French subsidiary needs a bank loan, a commercial lease in Paris or a public contract, paid-up capital speaks louder than a current account. Second, equity cures a sick balance sheet. French law watches the ratio between equity and capital closely. Article L.223-42 of the Commercial Code warns: “Si, du fait de pertes constatées dans les documents comptables, les capitaux propres de la société deviennent inférieurs à la moitié du capital social, les associés décident, dans les quatre mois qui suivent l’approbation des comptes ayant fait apparaître cette perte s’il y a lieu à dissolution anticipée de la société.” When losses have eaten more than half the capital, the shareholders must vote within four months of approving the accounts on whether to dissolve the company early, and if they continue, they must rebuild equity to at least half the capital by the end of the second following financial year or reduce the capital accordingly. A foreign owner who keeps funding losses through current account loans without ever recapitalising may find the company trapped in this procedure, with a published warning on its record. Converting current account balances into capital, a mechanism called incorporation de compte courant, is a standard rescue tool: your debt becomes shares, equity rises, and the half-capital alarm stops ringing.

Third, capital increases can carry tax advantages that loans do not, particularly when outside investors join. But for a founder funding their own company, the main drawback is rigidity. Money contributed as capital cannot simply be wired back when you need it in your home country. Getting it out requires either profits distributed as dividends, which depend on taxable results and shareholder votes, or a formal capital reduction, which demands a shareholder decision, an auditor’s report, a filing, creditor opposition rights and publication — a months-long procedure during which creditors can object. In short, lend when you want flexibility and a quick return of your cash; increase capital when you want credibility, balance-sheet strength or a lasting commitment visible to banks and partners. Most foreign founders end up combining both: a modest capital base sufficient for credibility, topped up with documented current account advances that can be repaid when cash flow allows. That combination is sound, provided each advance is written, approved and tracked as Part I.A describes.

II. How to Take Your Money Back Out of France: Repayment, Interest, Dividends and Tax

Putting money in was the easy part. Taking it out is where foreign owners meet French mandatory rules: repayment rights depend on what you signed, interest is only partly deductible for the company, and dividends paid to a shareholder living abroad suffer withholding tax before they ever reach your foreign account. This second part follows the money home, step by step, with the tax mechanics the French administration will apply to each euro.

A. How Do You Recover a Shareholder Loan and Its Interest From Abroad

The starting point is good news for lenders. Under French case law, a shareholder current account with no agreed term is treated as an open-ended loan, repayable whenever you ask. The Court of Cassation confirmed this in a February 2025 decision: “sauf stipulation contraire, tout associé était en droit d’exiger à tout moment et peu important les motifs de sa demande le remboursement du solde de son compte courant, dès lors que l’avance ainsi consentie constituait un prêt à durée indéterminée” — Cass. com., 12 February 2025, No. 23-17.483. In plain English: unless your agreement says otherwise, you can demand repayment of your credit balance at any time, for any reason, because the advance is a loan with no fixed term. That is the default rule, and it explains why founders love the current account: no maturity date, no bank negotiation, just a written demand when the company can afford it.

Three words in that ruling carry the whole risk: unless your agreement says otherwise. If you signed a lock-up clause, a subordination agreement or a repayment schedule tied to the company’s results, those special terms override the default and the court will enforce them. This is where foreign founders get trapped most often. A typical scenario: the French subsidiary borrows from a bank, and the bank requires the foreign parent to block its current account for five years as a condition of the loan. Two years later the parent needs the cash and discovers the block. French courts uphold such clauses because the parties freely agreed them, and the company in difficulty can also ask a judge for payment delays. Before demanding repayment from abroad, re-read your agreement, check for blocking or subordination clauses, and verify the company’s cash position: forcing repayment that pushes the company into cessation of payments exposes you to liability claims and makes any repayment received in the suspect period vulnerable to clawback if insolvency follows.

The clean procedure for recovering your advance has four steps. First, send a formal written demand, ideally by registered letter with acknowledgement of receipt or by bailiff’s writ, stating the exact balance from the last approved accounts. Second, have the shareholders acknowledge the repayment in a written decision, which keeps the related-party paper trail complete. Third, execute the transfer from the company’s French bank account to your foreign account with the reference clearly marked as current account repayment, and keep the slip: cross-border transfers above certain thresholds are reported, and clean labelling avoids money-laundering freezes. Fourth, record the repayment in the books and have the new balance approved at the next shareholders’ meeting. If the company refuses or delays without a contractual basis, a French court can order payment, and the quoted 2025 decision shows judges apply the on-demand rule firmly.

Interest adds a second layer of return, and here tax law takes over. When your foreign parent company or you as an individual charge interest on the advance, the French company deducts that interest from its taxable profit, which is taxed at the standard corporate rate. Article 219 of the General Tax Code fixes that rate: “Le taux normal de l’impôt est fixé à 25 %.” Every euro of deductible interest therefore saves the company up to 25 cents of corporate tax, which is why groups like to fund subsidiaries with interest-bearing loans rather than zero-rate advances. But the deduction is capped. Article 212 of the General Tax Code provides that interest paid to a shareholder or related company is deductible only within a maximum rate: “Les intérêts afférents aux sommes laissées ou mises à disposition d’une entreprise par une entreprise qui est son associée ou par une entreprise liée, directement ou indirectement, au sens du 12 de l’article 39, sont déductibles : a) Dans la limite de ceux calculés d’après le taux prévu au premier alinéa du 3° du 1 du même article 39 ou, s’ils sont supérieurs, d’après le taux que cette entreprise emprunteuse aurait pu obtenir d’établissements ou d’organismes financiers indépendants dans des conditions analogues”. In practice, interest up to the quarterly fiscal reference rate published by the tax administration passes automatically; above that, the company must prove it could have borrowed at that rate from an independent bank, which requires real comparables. On top of that ceiling sits a second, global cap: Article 212 bis limits net financial charges to the higher of 3 million euros or 30 percent of adjusted earnings: “Les charges financières nettes supportées par une entreprise non membre d’un groupe, au sens des articles 223 A ou 223 A bis , sont déductibles du résultat fiscal soumis à l’impôt sur les sociétés dans la limite du plus élevé des deux montants suivants : 1° Trois millions d’euros ; 2° 30 % de son résultat déterminé dans les conditions du II.” Small subsidiaries rarely hit this ceiling, but fast-growing foreign-funded companies with heavy shareholder loans and thin profits can, so model the deduction before fixing a high rate.

For related-party loans inside a group, large companies face one more mandatory step: prior authorisation of the agreement. Article L.225-38 of the Commercial Code states: “Toute convention intervenant directement ou par personne interposée entre la société et son directeur général, l’un de ses directeurs généraux délégués, l’un de ses administrateurs, l’un de ses actionnaires disposant d’une fraction des droits de vote supérieure à 10 % ou, s’il s’agit d’une société actionnaire, la société la contrôlant au sens de l’article L. 233-3 , doit être soumise à l’autorisation préalable du conseil d’administration.” A foreign parent holding more than 10 percent of the votes that lends to its French subsidiary falls squarely in this rule in companies with a board. Get the authorisation before signing, not after, and keep the board minutes with the loan file.

B. When Should You Take Profits as Dividends, and What Does France Withhold

Once the French company earns real profits, dividends become the natural way to reward yourself as a foreign shareholder. The route runs through the annual accounts: the shareholders approve the financial statements at the yearly general meeting, allocate the profit between reserves and distributable amounts, and vote the dividend. Only profits actually earned and available can be distributed; paying a fictitious dividend from a loss-making company is a criminal offence for the managers, and the company’s auditor, the commissaire aux comptes, watches this point. Dividends require patience — one distribution per year in most small companies — but they carry no repayment risk and no blocking clause, which makes them the cleanest exit for permanent capital.

The cross-border cost is withholding tax, the retenue à la source. When the beneficiary lives outside France, the French paying company must withhold tax at source before wiring the dividend abroad. The legal basis is Article 119 bis of the General Tax Code: “Les produits visés aux articles 108 à 117 bis donnent lieu à l’application d’une retenue à la source dont le taux est fixé par l’article 187 lorsque leurs bénéficiaires effectifs sont des personnes qui n’ont pas leur domicile fiscal ou leur siège en France”. The standard domestic rate is 25 percent, which feels heavy, but two relief valves usually reduce it. First, the European Union Parent-Subsidiary regime exempts dividends paid by a French subsidiary to a qualifying EU parent company holding at least 10 percent, provided the holding conditions and anti-abuse requirements are met. Second, France’s bilateral tax treaties with the United States, the United Kingdom, the United Arab Emirates, Singapore and dozens of other states typically cut the rate to 15 percent or 5 percent depending on the ownership percentage, with a reclaim procedure through the famous Form 5000 series filed via the foreign tax administration. Never accept the full 25 percent as final without checking the treaty between France and your country of residence: the difference on a 200,000-euro distribution can exceed 30,000 euros.

Choosing between loan repayment and dividends is therefore a calculation, not a habit. Repayment of principal is tax-neutral — you recover your own money with no French tax — while interest is deductible for the company but taxable in your hands, and dividends are not deductible for the company but may benefit from treaty-reduced withholding in yours. A common efficient pattern for foreign founders is to keep a documented interest-bearing current account for flexibility during the growth years, then switch to dividends once profits are stable and the treaty position is confirmed. Whatever you choose, coordinate with the company’s French accountant before 31 December: the interest rate, the dividend vote and the withholding forms all have calendar deadlines, and the social security agency URSSAF, the body that collects employer and employee contributions, must never be confused with the tax office — payroll debts and tax debts follow different recovery tracks, and mixing them up is a classic foreign-founder error when cash is tight.

Conclusion

Funding a French company from abroad is a legal design choice, not a simple bank transfer. Lend through a written, approved shareholder current account when you want your money back on demand, with the Court of Cassation’s on-demand repayment rule as your default protection and blocking clauses as the exception you must read before signing. Increase the share capital when you need credibility with banks and partners or when losses have pushed equity below half the capital and Article L.223-42 forces a decision. On the way back, repay principal tax-free where the contract allows, charge interest within the Article 212 rate limits so the company keeps its deduction, and take dividends through the annual vote while claiming your treaty rate against the Article 119 bis withholding. Each step leaves a trace — board minutes, shareholder reports, filings at the greffe, notices in the BODACC — and those traces are what protect a founder living thousands of kilometres from the Paris court clerk’s window. Set the paperwork once, review it every year with French counsel, and your cross-border funding will work as hard as you do.

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