Your French company is running out of cash and you live in London, New York, Dubai or Singapore. The landlord in Paris wants the next quarter, the first employee’s salary is due at the end of the month, and your French bank answers that a company with six months of history cannot have an overdraft. So you open your own wallet: you wire 40,000 euros from your personal account abroad to the company account and you wonder what you have just done in legal terms. Was it a gift? A loan? An investment? Can you take the money back next year if the business turns around? Will the French tax administration accept the interest you plan to charge? And if the company keeps losing money despite your help, can a French court ask you, the director living abroad, to pay the company’s debts out of your own pocket?

French law gives a foreign founder two clean routes to fund a French SAS (société par actions simplifiée, the simplified joint-stock company most foreign founders choose): lend the money through a shareholder current account (compte courant d’associé), or put it in permanently through a capital increase (augmentation de capital). Each route has its own paperwork, its own tax treatment, and its own way back. This article explains both, step by step, with the official texts and recent court decisions that decide real cases. It assumes you already know how to choose between a SAS, a SARL, a branch and a subsidiary when entering France, and that the company already has a French corporate bank account that can receive funds from abroad. French acronyms are explained every time: Kbis (the official company registration certificate), greffe (the registry of the commercial court), BODACC (the official bulletin where company events are published), CAC (commissaire aux comptes, the statutory auditor), and CGI (Code général des impôts, the French tax code).

I. Lend money to your French company from abroad: the shareholder current account (compte courant d’associé)

A. How to fund your French SAS from abroad with a loan you can normally reclaim at any time

The shareholder current account is the everyday tool French companies use when an owner advances cash. Despite its accounting name, it is legally a loan: the official business portal entreprendre.service-public.fr states that the shareholder current account “s’analyse en un prêt”, a loan, which gives the lending shareholder or director the status of a creditor of the company (créancier social). The terms of that loan — interest, duration, repayment — are set either in the articles of association (statuts) or in a separate written current-account agreement (convention de compte courant) signed between the company and the shareholder. For a founder living abroad, this route has three immediate attractions: it is fast, it does not change the share capital, and the money can in principle come back.

Almost anyone close to the company can be the lender. According to the same official source, advances can come from individual shareholders (associés et actionnaires, personnes physiques) whatever the number of shares they hold, from directors (dirigeants) such as the president of a SAS (président), a general manager (directeur général) or a manager (gérant), and from shareholder companies. A foreign parent company can therefore lend to its French subsidiary, and a founder living in London can lend to the French SAS they control. One banking-law detail matters for groups: the prohibition on acting as a bank does not prevent a company from carrying out treasury operations with companies linked by capital ties giving effective control. Article L. 511-7 of the Code monétaire et financier (French monetary and financial code) provides that “Les interdictions définies à l’article L. 511-5 ne font pas obstacle à ce qu’une entreprise, quelle que soit sa nature, puisse”, and in particular “Procéder à des opérations de trésorerie avec des sociétés ayant avec elle, directement ou indirectement, des liens de capital conférant à l’une des entreprises liées un pouvoir de contrôle effectif sur les autres” (Article L. 511-7, Code monétaire et financier). In plain English: an intra-group cash advance from a controlling foreign parent is not illegal banking, as long as the control link is real.

The single most protective step is to put the loan in writing before wiring. French law allows agreed interest to exceed the statutory rate whenever the law does not prohibit it, but the rate must be written down: Article 1907 of the Code civil (French civil code) states “L’intérêt est légal ou conventionnel. L’intérêt légal est fixé par la loi. L’intérêt conventionnel peut excéder celui de la loi, toutes les fois que la loi ne le prohibe pas. Le taux de l’intérêt conventionnel doit être fixé par écrit.” (Article 1907, Code civil). No written rate means no contractual interest, and a dispute about what was agreed becomes one person’s word against the company’s books. A founder wiring money from abroad should therefore sign a convention de compte courant stating the amount, the currency and exchange terms, the interest rate, and the repayment terms, and should label every transfer explicitly (for example “shareholder advance — compte courant”) so the bank statements prove the nature of the funds.

The great strength of the current account is the repayment rule. French courts treat the advance as an ordinary loan, and the lender decides when to ask for the money back. The Paris Court of Appeal restated the principle in plain terms: “Il est de principe que la qualification de prêt autorise l’associé ayant consenti une avance en compte-courant à décider librement du moment où il entend en réclamer le remboursement.” (Paris Court of Appeal, Pôle 5, Chambre 9, 15 May 2025, RG 24/05837, decision available on courdecassation.fr). The official business portal confirms the practical side: when the shareholder demands repayment, the company cannot refuse, even by arguing that it is short of cash, and it cannot unilaterally cap repayment at what its cash position allows; it can only ask a court for payment delays. For a founder abroad, that means the 40,000 euros wired in January can in principle be reclaimed in full the following year, with the agreed interest, even if the company has not made a profit.

One formality is often forgotten by foreign presidents of SAS. A loan between the company and its president, one of its directors, or a shareholder holding more than 10 percent of the voting rights is a regulated agreement (convention réglementée). Article L. 227-10 of the Code de commerce (French commercial code) requires that “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.” (Article L. 227-10, Code de commerce). The shareholders then vote on that report; an unapproved agreement still produces its effects, but the interested person may have to bear any harmful consequences for the company. Where the SAS has a single shareholder (associé unique), the same article simplifies the rule: the agreement is simply recorded in the register of decisions. A founder who is both sole shareholder and president and lends from abroad must therefore write the loan into the decision register. It takes ten minutes and it neutralises the most common ground for later challenges.

B. Blocked accounts, bank pledges and the tax ceiling on interest: what to calculate before you sign

The freedom to reclaim the money at any time lasts only until the founder signs it away — and banks financing French companies routinely ask founders to do exactly that. When a bank lends to a small SAS, it often requires the shareholders to block (bloquer) their current accounts for the duration of the bank loan and to pledge them as security (nantissement). The official business portal explains the mechanism: blocking means the company no longer has to repay the funds, which then count as stable resources, and the decision is taken either unanimously by the shareholders or in a blocking agreement (convention de blocage) signed between the company and the shareholder, typically as a guarantee for bank credit.

A May 2025 Paris decision shows how strictly courts enforce a blocking agreement against a founder who later wants out. Several shareholders of a restaurant SAS had each blocked part of their current account, 150,000 euros in total over four years, at the bank’s request when the company borrowed 350,000 euros. One shareholder, who had blocked 30,000 euros until 28 February 2026, was later removed from his management role and demanded immediate repayment. The court recalled that a valid, clearly expressed blocking agreement stabilises the funds in the company for a fixed period: “Par la convention de blocage, dès lors qu’elle est valide et clairement exprimée les fonds, sont stabilisés dans la société pour une durée déterminée.” It then rejected his claim outright: “Rejette la demande de remboursement de son compte-courant à hauteur de 30 000 formée par M. [J] [O]” (Paris Court of Appeal, Pôle 5, Chambre 9, 15 May 2025, RG 24/05837, decision available on courdecassation.fr). The lesson for a foreign founder is direct: never sign a blocking or pledge clause presented by a French bank without checking the end date, the exact amount, and whether early release requires the bank’s written consent, because until that date the money is locked even if you leave the company. The same decision usefully recalls the pledge formalities: the pledge of a current-account balance must be in writing, and to be enforceable against the company it must be notified to it or the company must be a party to the deed.

Tax then sets the price of the loan. Interest paid by the company to the shareholder can be deducted from taxable profit, but only within a legal ceiling. The official business portal publishes the maximum deductible rate (taux de référence), which moves with the company’s year-end date — around 5 percent for year-ends in mid-2025 (5.32 percent for years ending 31 May to 29 June 2025, 5.16 percent, then 5.07 percent for the following monthly windows). Any interest above that rate is not deductible. Behind that table sits Article 212 of the CGI, which states that “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”, and that they are deductible “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” (Article 212, Code général des impôts). In practice, a founder who charges 8 percent when the reference rate is about 5 percent gives the company a deduction only up to the reference level; the excess stays taxable. The administration can also invoke the arm’s-length rate the company could have obtained from an independent bank, so keeping a bank offer or a comparable quotation in the file is wise.

Two further tax distinctions decide how the interest is written. If the lender is an individual, paying interest is optional: the founder can lend interest-free. If the lender is a company, an interest-free advance with no consideration can be attacked as an abnormal management decision (acte anormal de gestion), meaning the tax administration can refuse the arrangement’s effects and reassess. Founders routing money through a foreign holding company should therefore always charge a documented market rate. And where the lender lives outside France, the interest paid out of France can trigger French withholding tax, reduced or eliminated according to the applicable double-tax treaty; the treaty country, the lender’s tax residence certificate, and the correct reporting must be checked before the first interest payment, not after. Interest received by a French-resident founder is taxable in France under the standard rules for investment income. None of this requires a French bank account for the lender: the interest can be paid to the foreign account stated in the convention, with the withholding, if any, handled by the French company as payer.

II. Put the money in for good: capital increases and rescuing a company that has lost half its capital

A. How to increase the capital of your French SAS while living abroad

Sometimes a loan is the wrong answer: the company is too fragile, a bank or a landlord wants to see real equity, or the founder wants the investment to be permanent. The capital increase (augmentation de capital) then takes over. In a SAS, the shareholders decide, under the conditions set by the articles, and the general company-law framework applies through the SAS statute. Article L. 227-1 of the Code de commerce provides that “Une société par actions simplifiée peut être instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leur apport.” (Article L. 227-1, Code de commerce), and the same article makes the rules for public limited companies applicable to the SAS where compatible — which is why the decision-making rule of Article L. 225-129 matters beyond listed companies: “L’assemblée générale extraordinaire est seule compétente pour décider, sur le rapport du conseil d’administration ou du directoire, une augmentation de capital immédiate ou à terme.” (Article L. 225-129, Code de commerce). In a SAS with one shareholder, that shareholder alone signs the decision; in a SAS with several shareholders, the articles say which majority applies, and the decision must be recorded in writing.

The practical sequence from abroad runs in five steps. First, the shareholders resolve to increase the capital, stating the amount, the number of new shares, the price (nominal value plus any share premium, prime d’émission), and the release schedule. Second, the new money is paid up: cash subscriptions are paid into a blocked account with a bank, a notary (notaire) or the Caisse des dépôts, which issues the deposit certificate (certificat du dépositaire). A founder abroad can wire the subscription amount directly to that blocked account; the certificate, not the wire receipt alone, is the proof the file requires. Third, any contribution in kind (apport en nature) — equipment, a patent, a business — needs valuation, and the SAS statute allows the shareholders to waive the independent contributions auditor (commissaire aux apports) unanimously only below thresholds set by decree; above them, the auditor’s report is mandatory. Fourth, an existing shareholder loan can be converted into capital by set-off (compensation de créances): instead of repaying the compte courant, the company issues shares against it, which is common when a founder’s advances have grown too large. Fifth, the company files everything on the Guichet unique, the single online business-formalities portal run by the INPI (Institut national de la propriété industrielle, the French industrial-property and business-registry office): updated articles, the shareholders’ decision, the deposit certificate, and the beneficial-owner details if changed. The greffe checks the file, the Kbis is updated with the new capital figure, and a notice appears in the BODACC. From signature to updated Kbis, founders should allow several weeks, longer if a foreign document needs an apostille (international legalisation stamp) or a sworn translation (traduction assermentée).

Three details specific to foreign founders deserve attention. First, the articles of many SAS created online give the president very wide powers but reserve capital increases to the shareholders: a president who “increases the capital” alone, without a shareholder decision, produces an increase a court can annul. Second, cash paid from abroad must arrive with clean proof of origin, because the depositary and then the greffe can ask questions, and anti-money-laundering checks (lutte contre le blanchiment) apply to large subscriptions exactly as they do to account openings. Third, contributions in industry (apport en industrie) — skills, know-how, work — do not form part of the share capital: Article 1843-2 of the Code civil states “Les apports en industrie ne concourent pas à la formation du capital social mais donnent lieu à l’attribution de parts ouvrant droit au partage des bénéfices et de l’actif net, à charge de contribuer aux pertes.” (Article 1843-2, Code civil). A founder who contributes months of unpaid work cannot book it as capital; only cash and assets in kind count, which is precisely why the loan-then-conversion route is so useful: the cash was really paid, so it converts cleanly.

B. When losses have eaten half the capital: the reconstitution deadline and the director’s personal risk

French law does not let a company drift along forever with empty equity. When losses shown in the accounts push shareholders’ equity (capitaux propres) below half of the share capital, a strict timetable starts. For a public limited company, Article L. 225-248 of the Code de commerce provides: “Si, du fait de pertes constatées dans les documents comptables, les capitaux propres de la société deviennent inférieurs à la moitié du capital social, le conseil d’administration ou le directoire, selon le cas, est tenu dans les quatre mois qui suivent l’approbation des comptes ayant fait apparaître cette perte, de convoquer l’assemblée générale extraordinaire à l’effet de décider s’il y a lieu à dissolution anticipée de la société.” (Article L. 225-248, Code de commerce). If dissolution is rejected, the company must, no later than the end of the second financial year following the year the loss was recorded, either rebuild equity to at least half the capital or reduce the capital by the necessary amount, and the resolution must be published. For the SARL (société à responsabilité limitée, the limited-liability company), Article L. 223-42 sets the same four-month decision rule for the shareholders: “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.” (Article L. 223-42, Code de commerce). A SAS follows the same logic through its own decision-making bodies, and the published 2026 case law confirms courts apply the reconstitution timetable strictly, including after capital reductions followed by increases.

A concrete example shows what is at stake. Imagine a SAS with 30,000 euros of capital that loses 20,000 euros in its second year: equity falls to 10,000 euros, below the 15,000-euro half-capital line. Within four months of approving those accounts, the shareholders must formally decide whether to dissolve early. If they vote to continue, they have until the end of the second following year to fix the balance sheet — typically by the founder injecting cash through a capital increase, converting a blocked current account into shares, or leaving profits in reserves, failing which the capital must be reduced. The decision is published, so banks, landlords and future partners can see it. Doing nothing is the worst option: any interested party can ask a court to order dissolution, and the missed deadline is documented in the company’s own filings.

Beyond dissolution, a director who keeps a loss-making company alive by artificial means faces a personal bill if the company ends in court-ordered liquidation (liquidation judiciaire). Article L. 651-2 of the Code de commerce provides: “Lorsque la liquidation judiciaire d’une personne morale fait apparaître une insuffisance d’actif, le tribunal peut, en cas de faute de gestion ayant contribué à cette insuffisance d’actif, décider que le montant de cette insuffisance d’actif sera supporté, en tout ou en partie, par tous les dirigeants de droit ou de fait, ou par certains d’entre eux, ayant contribué à la faute de gestion.” (Article L. 651-2, Code de commerce). The same article protects directors against hindsight bias: “en cas de simple négligence du dirigeant de droit ou de fait dans la gestion de la personne morale, sa responsabilité au titre de l’insuffisance d’actif ne peut être engagée” — simple negligence is not enough; the court needs a management fault that contributed to the shortfall. The mechanism is used regularly: in a 10 April 2026 judgment, the liquidator of a SARL asked the Economic Activities Court of Le Mans to charge all or part of the company’s debts to its director for management fault under Article L. 651-2 (Tribunal des activités économiques du Mans, sanctions chamber, 10 April 2026, RG 2025004042, decision available on courdecassation.fr). Living abroad changes nothing here: the president of a SAS, resident in London or Dubai, is a dirigeant de droit fully exposed, and a foreign parent that actually runs the French subsidiary can be pursued as a de facto director (dirigeant de fait).

The funding choice therefore doubles as liability management. Continuing to lend ever-larger unblocked current-account advances to a company whose equity is below half the capital, without ever deciding on dissolution or reconstitution, builds exactly the file a future liquidator will use: late decisions, no published resolution, and a director who knew. The safer sequence is the reverse: verify the equity position at each year-end, record the four-month decision in writing even when it concludes the company continues, and fund the reconstitution with traceable instruments — a formal capital increase, a documented conversion of current account into shares, or a blocked advance tied to a credible recovery plan. Each of those steps leaves a dated paper trail showing a director who managed, rather than one who drifted.

Conclusion

A foreign founder whose French SAS needs cash should start with two questions, in this order. First, will I need this money back? If yes, lend it through a written shareholder current-account agreement with a stated rate, keep every transfer labelled and traceable, record the agreement under the regulated-agreements procedure, and read any bank blocking clause twice before signing, because a valid block suspends repayment until its end date. Second, does the balance sheet require permanent equity? If equity has fallen below half the capital, or a partner demands it, convert the temporary into the permanent through a shareholder decision, a proper deposit of funds, and a Guichet unique filing that produces an updated Kbis. Interest stays deductible only within the reference rate, an interest-free advance from a company lender invites a tax challenge, and payments to a lender abroad must go through the treaty analysis before the first euro of interest leaves France. Above all, funding is not only a cash decision but a director’s decision: the four-month dissolution-or-continuation vote and the two-year reconstitution clock run whether the president lives in Paris or abroad, and a court-ordered liquidation can send the shortfall back to any director whose management fault helped create it. Lend cleanly, capitalise in time, and write everything down — from abroad, the paper file is the founder’s only witness.