Your French SAS is running out of cash and you live abroad. A big contract is finally within reach, the bank asks for stronger equity before it releases a loan, or a new partner in London, New York or Dubai offers to inject 80,000 euros in exchange for a stake. Wiring the money to the company account feels like the obvious move, and many foreign founders do exactly that, only to discover months later that the wire was booked as an undocumented shareholder loan, that the incoming investor holds no shares at all, or that a co-shareholder challenges the whole operation and blocks the updated Kbis (the official company identity extract issued by the commercial court registry, the greffe). In French company law, cash only becomes capital through a formal increase of capital, voted, subscribed, paid up, filed and published. This article explains, for a non-French reader, how a foreign-held SAS (the société par actions simplifiée, France’s flexible corporation) raises equity from abroad: the cash increase procedure and the entry of a new investor, then the maths of dilution, the shields that protect control, and the remedies when an increase is flawed.
I. Raising equity from abroad: the cash increase and the entry of a new investor
Before calling a lawyer, foreign owners usually hesitate between two routes: lending money to their own company through a shareholder current account (compte courant d’associé), or increasing the capital. A loan keeps the door open to repayment, and it has its own regime on interest, repayment and tax, described in our guide to how a foreign owner recovers a shareholder loan from a French company. A capital increase is a different animal: the money becomes equity, it strengthens the balance sheet, it cannot simply be wired back, and it changes who owns what percentage of the company. Banks financing a French subsidiary, landlords signing a commercial lease with a thinly capitalised tenant, and serious investors all read the capital figure on the Kbis before they commit. If your project is still at the stage of choosing the right vehicle, read first our comparison of how foreign founders choose between an SAS, a SARL, a branch and a subsidiary, because the increase procedure depends on the form you chose. What follows assumes the most common case: a French SAS held from abroad, with one or several foreign shareholders.
A. How a cash capital increase is voted, subscribed and paid up from abroad
The starting rule is simple and strict. Under Article L225-129 of the Commercial Code: “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.” In plain English, only an extraordinary meeting of the shareholders can decide an immediate or deferred capital increase, acting on a board report. The meeting may delegate the power to the board or the management under Article L225-129-2, and the increase must then generally be completed within five years of the decision or delegation. In an SAS, corporate governance is largely contractual: the SAS chapter of the Commercial Code applies the public limited company (SA) rules only insofar as they are compatible with the special SAS provisions, as Article L227-1 of the Commercial Code provides, and your articles (statuts) decide who reports, who convenes and which majority applies. Read your articles first: many foreign-held SAS articles require unanimity or a reinforced majority for capital increases, and that clause governs. If you are the sole shareholder (associé unique), you exercise the collective powers alone and record the decision in writing, which makes distance management straightforward.
The second pillar is the preferential subscription right (droit préférentiel de souscription, DPS). Under Article L225-132 of the Commercial Code: “Les actions comportent un droit préférentiel de souscription aux augmentations de capital.” Every shareholder is entitled, in proportion to the shares already held, to subscribe to new cash shares first. Shareholders may individually waive that right, and the meeting that decides or authorises the increase may suppress it for all or part of the issue under the conditions of Articles L225-136 to L225-138-1, acting on a board report and, where auditors exist, on a statutory auditor’s report, as Article L225-135 of the Commercial Code states. Suppressing the DPS is precisely what lets a newcomer take a stake while the existing owners step aside, voluntarily or because the majority imposes it. When the suppression targets named persons, the issue price must be justified and the auditors report, because the operation shifts value between shareholders. From abroad, the practical point is that a DPS waiver or suppression is never implied: it must appear in the meeting documents, be signed, and be kept with the subscription forms (bulletins de souscription), since a missing waiver is the first argument a diluted shareholder raises in court.
Subscription and payment follow a fixed chain. Each subscriber signs a subscription form stating the number of shares taken and the amount paid. Cash subscriptions must be paid up (libérées) at subscription for at least the fraction the law requires, with the balance callable later by the management, and each shareholder is a debtor of the company for whatever sum was promised, as Article 1843-3 of the Civil Code recalls: “Chaque associé est débiteur envers la société de tout ce qu’il a promis de lui apporter en nature, en numéraire ou en industrie.” The funds are deposited with a bank, the Caisse des dépôts or a notary, which issues the deposit certificate (certificat du dépositaire). Foreign founders often stumble here: the deposit must come with clean identification of each subscriber, proof of the origin of funds for anti-money-laundering checks, and, for non-resident subscribers, sometimes a translated passport and proof of address. A wire labelled “capital increase” from a personal account with no subscription form proves nothing; the form plus the certificate proves the payment. If the increase fails or is not completed, subscribers get their money back through the depositary, which is why the deposit step protects everyone, including the newcomer wiring funds from another continent.
For completeness, the SARL (société à responsabilité limitée, the limited liability company with parts sociales instead of shares) follows a heavier collective logic: apart from nationality changes, which require unanimity, other amendments to the articles are decided by shareholders holding at least three-quarters of the shares, as Article L223-30 of the Commercial Code provides, subject to the quorum rules for companies formed after 2005. Foreign owners who chose a SARL for its stability should check their articles before assuming that a simple majority suffices. Once the subscriptions are complete, the articles are amended to state the new capital, the management files the dossier on the Guichet unique (the single online company formalities portal run with the INPI, the French intellectual property and companies institute), the commercial court registry (greffe du tribunal de commerce) updates the company record in the national companies register, and the amendment appears in the BODACC (the Bulletin officiel des annonces civiles et commerciales, the official gazette of company notices). Only the updated Kbis proves the new capital to banks, notaries and courts.
B. Bringing a new foreign investor into the capital and setting the entry price
When the new money comes from an incoming investor rather than the existing owners, two questions dominate: may the shares go to this person, and at what price. On the first question, SAS articles frequently require prior approval (agrément) of any share transfer, since Article L227-14 of the Commercial Code provides: “Les statuts peuvent soumettre toute cession d’actions à l’agrément préalable de la société.” A capital increase reserved to a named newcomer is economically equivalent to letting that person in, so the approval logic, the competent body, the voting exclusion of the candidate and the buy-back procedure if approval is refused must be read together with the increase resolution. Founders who downloaded template articles sometimes discover an approval clause they had forgotten, or no clause at all where they wanted one. Review the articles before promising a stake to anyone: a subscription completed in breach of an approval clause exposes the company to litigation and freezes the whole file at the registry.
On price, newcomers almost never subscribe at nominal value (valeur nominale) when the company already has activity, clients or reserves. The difference between the subscription price and the nominal value is the share premium (prime d’émission), booked to a dedicated premium account that creditors read as part of equity. Setting the premium is a business negotiation, but it has legal edges: an absurdly low price dilutes the existing owners and can feed an abuse-of-majority claim, while an inflated price may hide a gift or a tax adjustment. Document the valuation method in the board report, attach recent accounts, and, where the stakes justify it, commission an independent valuation. The 2026 ruling of the Commercial Chamber of the Cour de cassation (France’s supreme court for civil and commercial matters) in the contributions field is a useful warning about independence generally: “Il résulte de la combinaison des articles L. 225-149-3, dans sa rédaction alors applicable, L. 225-147, L. 227-1 et L. 822-11-3, devenu L. 821-31, du code de commerce que les fonctions de commissaire aux apports sont, à peine de nullité des délibérations prises au vu de son rapport, incompatibles avec toute activité ou tout acte de nature à porter atteinte à son indépendance à l’égard de l’une des parties à l’opération d’apport ou d’une personne qui la contrôle ou qu’elle contrôle.” (Cass. com., 28 May 2026, No. 25-13.211, published in the Bulletin). The case concerned contributions in kind, not a cash premium, yet its spirit travels: whoever values what goes into the company must be independent of the contributor.
Contributions in kind (apports en nature) deserve their own paragraph because foreign investors often propose them: a patent portfolio, software, a business, foreign shares contributed to the French SAS. Under Article L225-147 of the Commercial Code: “En cas d’apports en nature ou de stipulation d’avantages particuliers, un ou plusieurs commissaires aux apports sont désignés à l’unanimité des actionnaires ou, à défaut, par décision de justice.” One or more contributions auditors are appointed unanimously or, failing that, by the court; they assess the value of the contributions under their own liability, and the extraordinary meeting votes on their report under the rules of Article L225-10. The formation-stage twin provision, Article L225-8 of the Commercial Code, follows the same logic. In the May 2026 case, the auditor had previously performed bookkeeping work for the company whose shares were contributed, and the Court held: “Il en est ainsi lorsque le commissaire aux apports a, avant sa désignation, accompli, pour le compte de la société dont les titres sont apportés, une mission d’expertise-comptable de cette société.” (Cass. com., 28 May 2026, No. 25-13.211). Before appointing the friendly accountant who already keeps the books, foreign owners should hear this sentence twice. Increases resulting from the exercise of securities giving access to capital follow a lighter track under Article L225-149 of the Commercial Code, which exempts them from some of the standard formalities, a useful tool for staged foreign investment through convertible bonds or warrants (bons de souscription).
Finally, tailor the shares themselves. Since incorporation or during the life of the company, preference shares (actions de préférence) with or without voting rights may be created, carrying special rights of any kind, temporary or permanent, defined in the articles, as Article L228-11 of the Commercial Code states: “Lors de la constitution de la société ou au cours de son existence, il peut être créé des actions de préférence, avec ou sans droit de vote, assorties de droits particuliers de toute nature, à titre temporaire ou permanent.” A foreign investor who wants a priority dividend but no management role, founders who want to keep voting control while raising cash, a veto on selling the business: all of this is engineered through preference shares plus a shareholders’ pact (pacte d’associés) handling approval, pre-emption, tag-along, drag-along and deadlock. The pact stays outside the articles and binds only its signatories, so combine both layers rather than stuffing personal promises into the articles. Sign the pact before the subscriptions, align its definitions with the amended articles, and keep an English version alongside the binding French text if the investor requires it.
II. Keeping control, proving the deal and challenging a flawed increase
Voting an increase is only half the job. The other half is arithmetic and evidence: understanding exactly how much of the company the foreign owner still holds the morning after, being able to prove the new capital with registry documents, and knowing how a flawed increase is attacked or saved. Foreign owners managing at a distance are the most exposed to all three risks, because they sign powers of attorney, rely on local managers, and sometimes learn of a dilution months after the meeting.
A. Dilution maths, control shields and the accordion trap
Dilution is pure arithmetic, and it should be computed before anyone signs. Take a foreign founder holding 800 of 1,000 shares, hence 80 percent. The company issues 1,000 new shares to a newcomer for fresh cash. The founder still holds 800 shares, but the total is now 2,000, so the stake falls to 40 percent. If the issue price equals 100 euros per share while the company was already worth 500,000 euros for 1,000 shares, the founder’s economic position is crushed twice: voting weight halved and value per share damaged. The default rule explains why percentages move mechanically: Article 1844-1 of the Civil Code provides that “La part de chaque associé dans les bénéfices et sa contribution aux pertes se déterminent à proportion de sa part dans le capital social et la part de l’associé qui n’a apporté que son industrie est égale à celle de l’associé qui a le moins apporté, le tout sauf clause contraire.” Profit shares and loss contributions follow the capital share unless the articles say otherwise, subject to the prohibition of lion clauses (clauses léonines) giving everything to one associate or nothing to another. Before voting, model the cap table after the operation: percentage held, voting rights, dividend rights, liquidation surplus. Insist that the board report shows the before-and-after table; a report silent on dilution is a red flag.
Control shields come in three layers. First, the articles: approval clauses, inalienability clauses (inaliénabilité) locking shares for up to ten years in an SAS, exclusion clauses, reinforced majorities, and multiple-vote or veto preference shares within the limits of Article L228-11. Second, the shareholders’ pact: anti-dilution undertakings, pre-emption rights on new issues, undertakings to vote for a reserved increase, deadlock and exit mechanics. Third, behaviour: exercising the DPS in full, subscribing to the uncovered fraction (à titre réductible) where offered, or negotiating a parallel warrant allocation that restores the balance later. Foreign owners who cannot travel should give a precise written power of attorney naming the meeting, the resolutions and the voting instructions, rather than a blank proxy, and should require same-day copies of the signed minutes. One structural warning matters more than the rest: the so-called accordion operation (coup d’accordéon), where capital is first reduced to zero to wipe out the existing shareholders and then immediately re-increased for the benefit of new money. The Cour de cassation polices it strictly: “Il résulte de ces textes que la réduction à zéro du capital d’une société par actions n’est licite que si elle est décidée sous la condition suspensive d’une augmentation effective de son capital amenant celui-ci à un montant au moins égal au montant minimum légal ou statutaire.” (Cass. com., 4 Jan. 2023, No. 21-10.609). A zero reduction not genuinely followed by an effective increase leaves the company with no capital and cannot legally take effect. Any foreign minority shareholder asked to approve a zero reduction ahead of a rescue increase should therefore verify, before voting, that the increase is real, funded and subscribed, because after the wipe-out there is nothing left to negotiate with.
Where founders once parked formation capital at the bank and then found it frozen by missing registry paperwork, the mirror problem after an increase is money wired but shares never issued. Our guide to recovering capital frozen at the bank and restarting the file describes the deposit certificate reflexes that apply symmetrically here: never release funds without identifying the subscriber, the resolution and the depositary certificate in the wire reference, and reconcile the bank statements with the subscription forms before filing. Keep a closing binder: convening notices, reports, waivers, subscription forms, deposit certificate, amended articles, filing receipt, Kbis before and after. Managed from abroad, this binder is your evidence kit; without it, every percentage and every payment becomes a swearing contest.
B. Proving the new capital and attacking or rescuing a flawed increase
Proof runs through the registry, not through bank statements. After the meeting, the articles are amended, the dossier is filed on the Guichet unique with the minutes, the reports, the subscription forms and the deposit certificate, the registry updates the record, and the notice is published in the BODACC. The updated Kbis then states the new capital, and that document is what banks, landlords, suppliers and judges read. Until the Kbis is updated, act as if the increase did not exist vis-à-vis third parties: sign bridge documents in the old capital, disclose the pending increase expressly, and avoid representing the new figure on invoices or headed paper. Foreign officers should calendar three dates: the meeting date, the filing date, and the Kbis issue date. If the registry rejects the file, and rejections of foreign-shareholder files for missing translations or unidentified subscribers are routine, fix the listed defect and refile rather than wiring more money into an unregistered structure. URSSAF (the body collecting social security contributions, Unions de recouvrement des cotisations de sécurité sociale et d’allocations familiales), the tax authorities and the auditors all start from the registered capital, so a mismatch between the Kbis, the accounts and the tax returns invites questions.
When the increase itself is flawed, French law offers both swords and shields. Nullity is the heavy weapon. In the May 2026 contributions case, the auditor’s lack of independence retrospectively poisoned the mission: beyond the nullity of the resolutions adopted on the strength of the report, the Court added: “Cette nullité s’étend à la lettre de mission elle-même.” (Cass. com., 28 May 2026, No. 25-13.211). The holding is public-order nullity (nullité d’ordre public): it cannot be regularised by a later vote and the parties cannot waive it. Transposed to cash increases, the equivalent landmines are decisions taken without the required reports, suppression of the DPS without the statutory procedure, subscriptions without payment, and backdated minutes. A diluted foreign shareholder who discovers such a defect sues for annulment of the resolutions, and, where the defect is public-order, expects the nullity to propagate to the acts that implemented it. Conversely, not every irregularity kills the operation. In a 2018 case about an SAS capital increase adopted without the mandatory employee-shareholding resolution, the Court approved regularisation by a later vote confined to the missing employee resolution: “Mais attendu que c’est à bon droit que la cour d’appel a retenu que le vote sur la seule résolution proposant de réserver aux salariés une augmentation de capital, qui n’avait pas été soumise à la précédente assemblée statuant sur la résolution tendant à l’augmentation de capital, suffisait à régulariser cette augmentation de capital, sans qu’il y ait lieu à nouvelle délibération sur cette première résolution ; que le moyen n’est pas fondé ;” (Cass. com., 28 Nov. 2018, No. 16-28.358). Defence strategy therefore starts by classifying the defect: curable procedural omission, which a fresh compliant vote can heal, or public-order violation, which dooms the resolutions and everything built on them.
Abuse of majority (abus de majorité) is the second sword, wielded by diluted minorities against increases that serve the controllers rather than the company. The test is settled: a resolution contrary to the corporate interest (intérêt social), adopted with the sole design of favouring the majority to the detriment of the minority. A reserved increase at a derisory price that halves a foreign minority while the funds serve no documented company need fits the textbook pattern; the remedy is annulment plus damages. Abuse of minority (abus de minorité) is the mirror: a minority blocking a vital rescue increase against the corporate interest can see its opposition overridden by the court appointing an agent to vote in its place. Add two companion actions: liability against the managers and auditors who engineered or certified the flawed operation, and the expert investigation (expertise de gestion) letting minority shareholders obtain information on management decisions. Time limits are short and run from the meeting or the publication, so a foreign owner who receives alarming minutes should have them reviewed immediately rather than waiting for the next trip to Paris. Practical closing checklist from abroad: verify the Kbis within days of filing, reconcile the cap table with the bank statements, store apostilled and translated powers with the minutes, confirm the BODACC publication, and diarise the limitation dates. An increase is finished only when the registry says so and no writ arrives.
Conclusion
A capital increase is how foreign money legally becomes French equity: an extraordinary decision or a compliant delegation, respected subscription rights or a documented waiver, real payment evidenced by a deposit certificate, amended articles, a Guichet unique filing, and an updated Kbis. Price the entry with a defensible premium, screen the newcomer through the approval clause, value any contribution in kind through a genuinely independent auditor, and model dilution before voting rather than regretting it after. When the operation goes wrong, classify the defect calmly: a curable omission can be healed by a fresh vote, while a public-order violation annuls the resolutions and what was built on them, and a self-serving dilution answers to abuse of majority. Foreign owners who keep a complete closing binder, verify the Kbis line by line, and calendar their remedies turn a cross-border funding round from a leap of faith into a documented corporate act.