You live in London, New York, Dubai or Singapore, and the French company you own needs money fast: a tax bill falls due before clients pay, a landlord asks for a deposit on new premises, or the first hires must be paid before revenue lands. Wiring funds from your personal account feels like the obvious answer, and in many cases it is the right one — provided the transfer is structured as what French practice calls a compte courant d’associé, a shareholder current account, rather than left as an unexplained credit on the company bank statement. An undocumented wire can be questioned by the company bank, recharacterised by the French tax administration (direction générale des finances publiques, DGFIP), or treated by a co-shareholder as something it never was, while a documented advance with a written rate, a clear repayment route and proper company approvals behaves like the flexible bridge financing foreign founders expect. This guide explains, for a business reader managing from abroad, how to lend to your French société par actions simplifiée (SAS, simplified joint-stock company) or société à responsabilité limitée (SARL, limited liability company) without living in France: the written agreement and company approvals that protect repayment, the interest caps and withholding taxes that apply on both sides of the border, and the exact steps that recover the money when the company delays or refuses to pay. Every French acronym is explained on first use, and every decisive statement is anchored to an official source, principally the French statutes on Légifrance, the official business portal Service-Public, and the tax administration commentary (BOFiP). Readers who are still choosing the vehicle itself should start with our guide to choosing between a SAS, a SARL, a branch and a subsidiary when investing from abroad before returning here for the financing layer.
I. Lending to your French company the right way while you live abroad
A. Put the advance in writing and secure the company approvals that protect repayment
A compte courant d’associé is not a bank account. It is the accounting record of money that a shareholder (associé in a SARL, actionnaire or associé in a SAS) leaves at the disposal of the company in addition to share capital, and which the company owes back to that shareholder. The official business portal describes its operation and tax treatment in a dedicated page on shareholder current accounts, which confirms that such advances are standard practice in French companies and sets out the conditions under which they bear interest and are repaid: see the Service-Public page on shareholder current accounts, operation and taxation. For a founder living abroad, the first discipline is therefore conceptual: every euro wired from personal funds must be labelled, from the first transfer, as a shareholder advance under a written agreement, and never mixed with capital contributions, which follow an entirely different regime of share issuance, notarial or filed deeds, registration with the greffe — the registry of the commercial court that issues the Kbis, the official identity certificate of the company — and publication. Capital goes in through subscriptions and stays in as equity; a current-account advance goes in as a loan and comes back as a repayment.
The written agreement is the document that makes repayment possible, and it should exist before the money moves, or at the very latest contemporaneously with the first wire. A founder managing from abroad should insist on at least the following terms in plain language: the identity of the lender and the borrowing company with its registration number (SIREN) as shown on the Kbis; the amount advanced and the currency, with an explicit clause allocating exchange risk when the wire is sent in dollars, pounds or dirhams and booked in euros; the interest rate in figures, because French law requires writing for any agreed interest, as developed below; the term of the advance, and in particular whether it is repayable on demand at any time or blocked until a fixed date or event such as the approval of the next annual accounts; the mechanics of repayment, meaning the beneficiary account, the accepted payment rails such as SWIFT transfer, and the notice channel, ideally an email address monitored from abroad plus a postal address for formal notices; and the governing law, which for an advance to a French company should be French law, with disputes before the French courts of the registered office (siège social). Each wire should then carry a reference to the agreement, for example the agreement date and the words shareholder advance, so that the bank statement itself tells the story. Banks in France monitor inbound flows from abroad for anti-money-laundering purposes, and a transfer labelled advance under an agreement that counsel can produce within days causes considerably less friction than an unexplained credit that the branch must investigate.
French law reserves lending to regulated institutions, and the starting prohibition is stated without ambiguity: Article L511-5 of the Monetary and Financial Code provides that “Il est interdit à toute personne autre qu’un établissement de crédit ou une société de financement d’effectuer des opérations de crédit à titre habituel.” A shareholder advance does not breach that monopoly when it remains what it claims to be: an occasional advance by a shareholder to its own company, documented as such, rather than habitual lending to the public. The discipline that follows from this boundary is practical rather than theoretical. Lend as a shareholder under a shareholder agreement, in amounts connected to the needs of your company, with interest at a rate the statutes authorise, and keep the paperwork that proves it. Do not lend to third parties, do not multiply advances to unrelated entities, and do not present yourself as a source of financing to the market. Individual shareholders and parent companies advancing funds to their own French subsidiary all sit on the permitted side of the line when the advance is genuine, but the file must show it.
Company approvals come next, and they differ between the SARL and the SAS. In a SARL, advances and more generally any agreement between the company and one of its managers or shareholders fall under the regulated-agreements procedure: Article L223-19 of the Commercial Code states that “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, with the interested party excluded from the vote. In a SAS, the parallel rule is Article L227-10 of the Commercial Code, under which “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.” A foreign founder who is both lender and president (président) of the SAS, or lender and manager (gérant) of the SARL, is therefore squarely inside these procedures, and the advance agreement must be disclosed, reported and voted. The vote does not make the loan valid as between lender and company in the way a countersignature would; the agreement binds once signed. But a missing report is the classic lever a co-shareholder, a successor manager or an auditor pulls years later to challenge interest paid, demand restitution, or argue that the advance was really a disguised contribution. From abroad, the reliable method is to have counsel or the company accountant prepare the report, circulate it with the written consultation or convene the meeting by videoconference as the articles allow, record the approval in minutes (procès-verbal), and keep the agreement, the transfer proofs and the minutes together at the registered office where the company records must be available.
Two further structural points deserve attention before any rate is discussed. First, French tax deductibility of interest on shareholder advances requires fully paid-up capital, a condition examined in the next section: if the subscribed capital has not been entirely released (libéré), the company cannot deduct the interest at all, so a founder who incorporated with partly unpaid capital should release the balance first and keep the bank certificate. Second, the parties may agree that the advance sits on a blocked individual account (compte bloqué individuel) for a fixed period, a mechanism the tax statutes expressly contemplate for shareholder funds; blocking the account strengthens the company balance sheet vis-à-vis banks and landlords, and it can justify a higher agreed rate, but it means the founder cannot demand the money back before the agreed date. The choice between an unblocked account repayable on demand and a blocked account with a fixed term is therefore the central liquidity decision of the whole operation: founders who may need the funds within months should keep the advance unblocked even at a lower rate, while founders parking medium-term cash in the company can accept the block in exchange for better remuneration, provided the blocking agreement is itself in writing and states the release date without ambiguity.
B. Charge interest inside the French caps and handle the tax on both sides of the border
French law permits a loan to bear interest, but agreed interest exists only in writing. The Civil Code states the permission plainly: Article 1905 of the Civil Code provides that “Il est permis de stipuler des intérêts pour simple prêt soit d’argent, soit de denrées, ou autres choses mobilières.” The same title then imposes the form without which no interest is owed: Article 1907 of the Civil Code provides that “Le taux de l’intérêt conventionnel doit être fixé par écrit.” A founder who wires funds with no written rate has therefore made, as a matter of French law, an interest-free advance: the company owes the principal back but no remuneration, and no rate can be reconstructed afterwards from market data or from what the parties say they intended. Conversely, once the rate is fixed in writing before or contemporaneously with the advance, it governs within the caps described below, and the lender can compute, invoice where appropriate, and if necessary sue for exactly what the agreement says. For advances sent from abroad in foreign currency, the agreement should state whether the contractual rate applies to the euro-booked amount or to the original currency amount, and which exchange source governs conversion on the value date, because a five per cent rate applied to different bases over a volatile year produces materially different interest.
The first cap concerns the borrowing company: interest paid to shareholders on top of their capital share is deductible from corporate income tax (impôt sur les sociétés, IS) only within a statutory maximum rate. Article 39 of the General Tax Code allows the deduction of “Les intérêts servis aux associés à raison des sommes qu’ils laissent ou mettent à la disposition de la société, en sus de leur part du capital, quelle que soit la forme de la société” only up to interest computed at a rate equal to the annual average of the average effective rates charged by banks and financing companies on variable-rate loans to businesses with an initial duration above two years. In practice this benchmark is known as the maximum deductible rate (taux maximal d’intérêts déductibles), published every quarter: the tax administration commentary collected under reference BOI-BIC-CHG-50-50-30 explains the computation and the administration publishes the applicable quarterly figures, for example in the version available at BOI-BIC-CHG-50-50-30 on deductible financial charges. Two consequences follow for a founder drafting from abroad. First, the deductible rate is the one in force at the financial year-end, not the rate in force when the agreement was signed, so an agreement signed in January for a December year-end must be checked against the fourth-quarter publication, and a rate that was deductible when drafted can cease to be fully deductible if market rates fall. Second, any contractual rate above the cap remains payable as between the parties — the company still owes what it promised — but the excess is permanently non-deductible, which raises the effective cost of the loan to the company. The same article adds the capital condition already mentioned: “Cette déduction est subordonnée à la condition que le capital ait été entièrement libéré.” Partly unpaid capital therefore has a double cost: the interest may still be owed to the founder, but none of it reduces the company taxable profit.
Where the lender is not an individual but a company — typically the foreign parent advancing funds to its French subsidiary — an additional layer applies. Article 212 of the General Tax Code covers “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 then limits deductibility to interest computed either at the Article 39 maximum rate or, where higher, at “le taux que cette entreprise emprunteuse aurait pu obtenir d’établissements ou d’organismes financiers indépendants dans des conditions analogues”, meaning the arm’s-length rate the French company could have obtained from an independent bank in similar conditions. A foreign parent that can document a genuine bank offer or a properly benchmarked intercompany rate may therefore sustain a rate above the statutory maximum, but only with transfer-pricing-grade evidence: the comparable offer, the margin analysis, and the correspondence showing that independent lenders would actually fund the subsidiary on those terms. On top of these per-loan limits sits the general ceiling on net financial charges: Article 212 bis of the General Tax Code provides that net financial charges “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.” Most founder-financed companies stay well beneath three million euros of net interest and never meet this ceiling, but groups that layer a shareholder advance on top of bank debt, leasing and acquisition financing should model the aggregate position before the year-end, because interest disallowed under this ceiling is carried forward under its own mechanics rather than deducted in the year paid.
Taxation on the lender side mirrors the company side, and residence determines everything. A lender who is tax-resident in France and receives interest from the French company faces a levy collected at source: Article 125 A of the General Tax Code covers interest and similar income where the beneficiaries “sont assujetties à un prélèvement lorsque la personne qui assure le paiement de ces revenus est établie en France”, meaning the French company withholds and remits before the lender declares the income on the personal return with the applicable crediting or discharge mechanics for the year. A lender who lives abroad — the normal case for the readers of this guide — faces instead the withholding on investment income paid to non-residents: Article 119 bis of the General Tax Code provides that the relevant investment income items “donnent lieu à l’application d’une retenue à la source dont le taux est fixé par le 1 de l’article 187”, and that this withholding applies “lorsqu’ils bénéficient à des personnes qui ont leur siège en France ou à l’étranger ou qui n’ont pas leur domicile fiscal en France.” In plain terms, the French company must withhold a percentage of the gross interest and pay it to the French Treasury when the interest is paid or credited to the foreign shareholder account, and the founder receives the net amount. Most double-tax treaties signed by France reduce or eliminate this withholding on interest, and the European Interest and Royalties Directive eliminates it between qualifying associated EU companies, but treaty relief is never automatic: the company must hold a valid certificate of residence of the lender for the year of payment, apply the treaty rate on the return it files, and in some configurations pay the full rate first and reclaim the excess afterwards through the competent foreign-tax office (service des impôts des entreprises, SIE, the business tax office that manages the company file, or the dedicated non-residents office depending on the case). A founder who ignores this layer discovers the problem at the worst moment — when demanding repayment — because the company cannot lawfully pay gross interest to a foreign account without either the residence certificate or the withholding, and reconstructing two years of missing certificates under time pressure is exactly the kind of remote administrative work that delays the wire by months. The interest must also be declared in the lender country of residence under that country domestic rules, with the French withholding credited or deducted as the applicable treaty allows, a point on which a local adviser in the residence country should confirm the mechanics before the first interest payment rather than after the first assessment.
II. Getting the money back and answering a refusal to repay from abroad
A. Demand repayment, respond to a refusal and collect without boarding a plane
An unblocked shareholder advance is repayable on demand: unless the agreement fixes a term or a blocking period, the founder may claim the balance at any time, and the Service-Public page on shareholder current accounts confirms this on-demand character as the default rule, subject only to a different written agreement between the parties. The claim nevertheless has to be made properly, because the date and form of the demand set every deadline that follows, from late interest to the eventual court timetable. The reliable sequence from abroad runs in three stages. First, send a written demand for payment stating the agreement date, the principal outstanding, the interest accrued to the demand date with the computation attached, and a payment deadline that is firm but realistic — typically fifteen to thirty days — addressed to the registered office and to the operational email of the manager or president, and keep the transmission proofs. Second, if the deadline passes unpaid, have a formal notice (mise en demeure) served: the most robust form is service by a commissaire de justice, the sworn enforcement officer formerly called huissier de justice, who serves the notice on the company at its registered office and draws up an official report of service, but a registered letter with acknowledgment of receipt (lettre recommandée avec accusé de réception) sent to the siège social also establishes the demand date, and counsel in France can arrange either without the founder travelling. Third, diarise the limitation period from the demand: Article 2224 of the Civil Code provides that “Les actions personnelles ou mobilières se prescrivent par cinq ans à compter du jour où le titulaire d’un droit a connu ou aurait dû connaître les faits lui permettant de l’exercer.” Five years looks generous until a founder spends two of them waiting for promises, changing accountants and assuming the money is safe because it is owed by his own company; every unanswered promise should therefore restart the paper trail rather than pausing it.
When the company answers the demand with a refusal or with silence, the founder must distinguish three situations that call for different responses. The first is genuine but temporary illiquidity: the company acknowledges the debt and asks for time. A negotiated repayment schedule, signed as an amendment to the advance agreement with instalment dates, a continued interest rate and an acceleration clause if one instalment is missed, usually recovers more money faster than proceedings, and it preserves the founder relationship with the management the founder itself appointed. The second is a dispute on the merits: the company, perhaps under a new manager or a co-shareholder who never liked the advance, claims the wire was a capital contribution, a gift, or repayment of something else entirely. This is where the file assembled in Part I pays for itself — the signed agreement, the labelled wires, the regulated-agreements report and vote, the interest computations and the tax returns that recorded the interest as such all converge to prove a loan, while their absence turns every hearing into a credibility contest the absent founder is poorly placed to win. The third is silence or evasion, which for a company seated in Paris or elsewhere in Île-de-France points towards the fast judicial routes rather than further correspondence: an application for a payment order (injonction de payer) before the competent tribunal judiciaire — the Paris court for a company seated in Paris — allows a creditor with documentary evidence to obtain an order without an initial hearing, served on the company, which becomes enforceable if no opposition is filed within the statutory period; if opposition is filed, the matter proceeds to a full hearing where the same file decides the outcome. Founders resident in another EU Member State can also consider the European order for payment procedure for uncontested cross-border claims, while founders outside the Union proceed through the French courts of the registered office under the jurisdiction clauses of the agreement. None of these routes requires the founder to attend in person: a lawyer admitted to the French bar represents the claimant throughout, powers and identity documents are exchanged electronically with certified translation where the court requires it, and hearings on documentary loan files rarely need the testimony of a claimant living six time zones away.
Enforcement, when a judgment or enforceable order exists, runs against the company assets through the same commissaire de justice: attachment of the company bank balances (saisie-attribution), attachment of receivables owed by the company clients, and ultimately sale of seizable assets, in the statutory order and with the statutory protections for the debtor. Two cautions matter specifically for shareholder-lenders. First, the founder ranks as an ordinary unsecured creditor unless a guarantee was taken — a personal guarantee (cautionnement) of a co-shareholder, a pledge over company assets, or a bank guarantee — and in a company that is already insolvent, employees, the Treasury and secured lenders are paid first, which is why large advances should be guaranteed at inception rather than negotiated at the enforcement stage. Second, if the company has entered safeguard, receivership or liquidation proceedings (sauvegarde, redressement judiciaire, liquidation judiciaire), individual enforcement is frozen and the claim must be declared to the liabilities (déclaration de créance) within the strict published deadline running from the BODACC publication — the Bulletin officiel des annonces civiles et commerciales, the official gazette in which insolvency openings are published — failing which the claim is extinguished for the proceedings. A founder living abroad should therefore task counsel or the accountant with monitoring the company position at the first sign of distress, rather than discovering the opening judgment months later through an unanswered email. The practical bundle that collects a shareholder advance from abroad is thus unglamorous but effective: the agreement and its amendments, every wire proof, the interest computations, the regulated-agreements report and minutes, the demands and service reports, and a counsel who can move from demand to payment order to enforcement without asking the founder to cross an ocean for a documentary hearing.
B. Keep the company deductible and audit-proof so the loan never turns into a reassessment
The company side of the operation is where foreign founders lose the most money without ever going to court, because a reassessment (redressement fiscal) simply disallows what was wrongly deducted and adds interest and penalties years after the cash was spent. The DGFIP auditor who opens the file of a foreign-held SAS or SARL reads shareholder advances with a fixed checklist, and each item on that checklist corresponds to a step the founder controls. Capital fully released: as seen above, no interest deduction is available until the subscribed capital is entirely paid up, so the auditor first verifies the capital account, and a company that deducted interest while part of its capital remained unpaid loses the whole deduction for the affected years. Rate within the cap: the auditor recomputes the deductible interest at the quarterly maximum rate for the year-end and disallows the excess, article by article and advance by advance, which is why the agreement rate should be set with headroom beneath the published cap or indexed to it expressly, for example by providing that the contractual rate equals the maximum deductible rate for the relevant year-end within a stated ceiling. Interest actually borne: accrued but unpaid interest follows its own timing rules, and interest that was never credited to the shareholder account or paid cannot support a deduction in the year claimed; the accounting entries must therefore mirror the agreement, with the interest credited or paid, the withholding computed and remitted where the lender lives abroad, and the lender statements reconciled to the company ledger at each year-end.
Documentation beyond the agreement decides most audits. The regulated-agreements report and the shareholders vote prepared under Articles L223-19 or L227-10 must sit in the company records with the minutes that approved them; the annual shareholders meeting that approves the accounts (assemblée générale d’approbation des comptes) should show the advance and the interest in figures the auditor can reconcile to the tax return (liasse fiscale) filed with the SIE through the professional account on impots.gouv.fr; and where the lender is the foreign parent company, the file should contain the arm’s-length evidence supporting any rate above the statutory maximum, namely the independent bank comparables and the functional analysis that Article 212 implicitly demands through its reference to market conditions. Undocumented or interest-free advances from a parent to a subsidiary attract a further risk: the auditor may treat an abnormally low or zero rate, or funds left indefinitely without any agreement, as an abnormal management decision (acte anormal de gestion) benefiting the foreign parent, and reassess accordingly. The defence against that characterisation is the same file — a genuine agreement, a market-consistent rate, actual payments, proper approvals — which demonstrates that the French company behaved as any independent borrower would. Founders should also keep the corporate housekeeping current through the single online filing portal (guichet unique) operated for business formalities, reachable at procedures.inpi.fr: changes of manager or president, transfers of the registered office, and amendments to the articles must be filed there and reflected on the Kbis obtained from the greffe, because an auditor, a bank or a judge who finds stale officers on the Kbis discounts everything else in the file. For companies seated in Paris, filings run through the registry of the Paris commercial court, and counsel in the Paris region can align the corporate calendar — agreement dates, meeting dates, filing dates — so that no document postdates the event it claims to record.
When the auditor nevertheless notifies a reassessment, the response runs on documents and deadlines rather than on explanations. The company answers the proposal point by point within the statutory reply period, attaching the agreement, the transfer proofs, the rate computation against the quarterly cap, the residence certificate and withholding return for the foreign lender, and the meeting minutes; counsel then decides whether to escalate to the hierarchical review, to the departmental mediation, or to the administrative court, depending on the amounts and the strength of the file. The lesson for a founder managing from abroad is that none of this can be assembled retrospectively under a thirty-day deadline: the quarterly rate check at each year-end, the annual approvals with the advance disclosed in figures, the residence certificate collected before each interest payment, and the filed formalities on the guichet unique together form a routine that costs little while the company is healthy and saves the deduction when the audit letter arrives. Readers financing the company through equity rather than debt, or combining both, will find the vehicle-level consequences of each choice — dilution, control, exit taxation and the treatment of losses — in our companion pieces on opening and operating the French bank account that receives the funds and evidences the capital deposit, which completes the financing picture alongside the present guide.
Conclusion
A shareholder loan is the most flexible instrument a foreign founder has for financing a French company, and French law welcomes it — on condition that it looks, reads and behaves like a loan. Put the advance in a written agreement with the amount, the currency, the rate in figures and the repayment mechanics before the first wire travels; route the approvals through the SARL or SAS regulated-agreements procedure with a report, a vote and minutes kept at the registered office; set the rate with headroom beneath the quarterly maximum deductible rate with capital fully paid up; withhold and remit on interest paid abroad with the residence certificate already in hand; and claim repayment in writing, with formal service where needed, well inside the five-year limitation period. Run from London, New York, Dubai or Singapore with a Paris file that any auditor, bank or judge can understand on first reading, the compte courant d’associé does exactly what bridge financing should do: it puts cash where the business needs it this quarter and returns it to the founder when the business can pay, with the interest properly deducted on one side and properly taxed on the other.