You formed a French SAS from London, New York or Dubai with 1,000 euros of share capital, received the Kbis (the official company identity certificate issued by the greffe, the registry office of the commercial court), and now the company needs 60,000 euros to pay the first salaries, the office deposit and the VAT advance. The French bank will not grant an overdraft to a company with no track record, and you do not want to go back to the notary-style capital increase procedure. So you wire the money yourself from your personal account abroad and record it as a shareholder loan. Six months later, three questions arrive at once: was that payment legally a loan or a hidden capital contribution, can the company deduct the interest you charged, and can you take the money back whenever you want while living outside France? This guide answers those three questions for foreign founders and foreign parent companies that fund a French company from abroad. It explains every French acronym as it goes: compte courant d’associé (shareholder current account, the technical name of a shareholder loan), greffe (court registry), URSSAF (the social security collection agency), BODACC (the official bulletin that publishes company registrations and insolvency openings), DGFIP (the French tax administration), and CGI (Code général des impôts, the French Tax Code). If you have not yet decided on the vehicle itself, read first our guide on choosing the right French vehicle (SAS, SARL, branch or subsidiary) as a foreign founder, then come back here to finance it correctly.

I. Can a Foreign Shareholder Lend Money to His French Company Instead of Increasing Capital?

A. Is a Shareholder Loan (Compte Courant d’Associé) Legal When You Live Abroad?

Yes. A shareholder loan, called in French a compte courant d’associé, is simply a loan from a shareholder to his own company, recorded in a dedicated current account in the company’s books. French civil law defines the mechanism without any nationality or residence condition. Article 1892 of the Civil Code states: “Le prêt de consommation est un contrat par lequel l’une des parties livre à l’autre une certaine quantité de choses qui se consomment par l’usage, à la charge par cette dernière de lui en rendre autant de même espèce et qualité.” (Article 1892, Civil Code). Money is the classic consumable thing: you transfer a sum, the company uses it, and it must return the same amount. Nothing in that definition requires the lender to live in France, to hold a French bank account, or to be a natural person: a foreign individual shareholder and a foreign parent company can both lend.

Two banking-law provisions confirm the point and draw the boundary you must respect. First, the general prohibition: 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.” (Article L511-5, Monetary and Financial Code). You, as a founder, are not a bank, so you may not lend money professionally and repeatedly to strangers. Second, the shareholder exception: Article L312-2 of the same Code provides that “ne sont pas considérés comme fonds remboursables du public : 1. Les fonds reçus ou laissés en compte par les associés en nom ou les commanditaires d’une société de personnes, les associés ou actionnaires, les administrateurs, les membres du directoire et du conseil de surveillance, les directeurs généraux et directeurs généraux délégués, les présidents de sociétés par actions simplifiées ou les gérants ainsi que les fonds provenant de prêts participatifs” (Article L312-2, Monetary and Financial Code). In plain English: money that a shareholder leaves in his current account with the company is not treated as public deposits, so the banking monopoly does not block it. A parallel exception in Article L511-7 expressly allows cash operations between companies linked by capital control (“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 L511-7, Monetary and Financial Code). A foreign parent company that controls its French SAS therefore has its own dedicated legal corridor for intra-group treasury loans.

The practical consequence is a sharp contrast with a capital increase. Increasing capital means amending the articles, filing with the guichet unique (the single online company registration portal that replaced the former CFE desks), publishing, waiting for the updated Kbis, and sometimes depositing new funds with a bank or notary. A shareholder loan requires none of that: no amendment of the articles, no filing with the greffe, no BODACC notice, no new Kbis. The loan is recorded by a simple accounting entry and a signed loan agreement held at the registered office. That speed is exactly why foreign founders use it to bridge the gap between incorporation and the first revenues. The official company-creation portal service-public.fr describes the capital deposit and Kbis steps for incorporation, and the INPI Guichet Unique portal centralises post-incorporation filings; neither requires a shareholder loan to be registered, which confirms that the loan lives in the contract and the accounts, not in the registry.

Direction matters enormously, and foreign founders sometimes confuse the two directions. What we describe here is the shareholder lending to the company (the account is a credit in favour of the shareholder). The reverse, the company lending to its own shareholder or director, is strictly forbidden in most companies and punished by nullity of the contract. Article L223-21 of the Commercial Code states: “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.” (Article L223-21, Commercial Code). The same prohibition exists for public limited companies in Article L225-43: “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” (Article L225-43, Commercial Code). In an SAS, case law and doctrine extend comparable vigilance to the president and senior managers through the regulated-agreements procedure. So remember the one-way rule: you may lend to your French company at any time; your French company may not lend to you personally, and any attempt to draw company cash for private use through a debit current account exposes you to nullity, tax reassessment of disguised dividends, and, in serious cases, criminal liability for misuse of company assets.

Two transfer mechanics deserve attention when the money starts abroad. First, label the wire correctly from day one: the transfer reference should read “shareholder loan / apport en compte courant” with the company name and, if possible, the loan agreement date. A wire labelled “capital” or “investment” without qualification invites the tax administration or a future auditor to treat it as a capital contribution, with different accounting and tax consequences. Second, keep the foreign-exchange trail: the debit advice from your foreign bank, the credit advice on the French company account, and any currency conversion slips. If the DGFIP or the statutory auditor asks where the funds came from, that chain proves the origin, the date of value, and the exact euro amount credited. Companies whose shareholder lives outside the eurozone should also record in the agreement which exchange rate applies and who bears conversion costs, because a 60,000-dollar wire that arrives as 55,200 euros creates a booking difference that must be allocated explicitly.

B. What Written Agreement, Interest Rate and Duration Protect a Non-Resident Lender?

An oral shareholder loan is valid, but a founder living abroad should never rely on one. Distance multiplies every evidentiary risk: the French tax administration asks for the contract during an audit, the statutory auditor (commissaire aux comptes) asks for it before certifying the accounts, a co-shareholder challenges the payment in a dispute, and the commercial court asks for it if the company later enters insolvency. A written agreement signed by both sides, even by electronic signature, settles five points in advance: the principal amount in euros, the interest rate or the expressly zero-interest character, the term (repayable on demand or blocked until a fixed date), the repayment mechanics from abroad, and the governing language. Draft it in English with a French translation or bilingually; French courts accept English contracts between business parties, but a bilingual version avoids translation disputes before the greffe or the tax inspector.

Interest is optional but strictly framed when you charge it. Article 1905 of the Civil Code provides: “Il est permis de stipuler des intérêts pour simple prêt soit d’argent, soit de denrées, ou autres choses mobilières.” (Article 1905, Civil Code). Article 1907 adds the decisive formal rule: “Le taux de l’intérêt conventionnel doit être fixé par écrit.” (Article 1907, Civil Code). Without a written rate, no interest accrues, whatever you believed was agreed over the phone. State the rate as a precise annual figure, the base (for example ACT/360 or 365 days), the payment dates, and whether unpaid interest capitalises. If you want an zero-interest loan, write “zero-interest” expressly; silence combined with no interest paid is generally read as zero-interest, but an express clause removes all debate with the auditor.

The rate you set has a tax ceiling on the company side. Article 39 of the Tax Code (CGI) 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” but only “dans la limite de ceux calculés à un taux égal à la moyenne annuelle des taux effectifs moyens pratiqués par les établissements de crédit et les sociétés de financement pour des prêts à taux variable aux entreprises, d’une durée initiale supérieure à deux ans” (Article 39, CGI, via Légifrance). In practice, the tax administration publishes that maximum rate every quarter (it has moved between roughly 5 and 6 percent in recent quarters), and the DGFIP international pages and BOFIP tax doctrine explain how to apply it. Any interest above the quarterly ceiling is permanently non-deductible for the company, even though you as lender remain taxable on the full amount. A second ceiling applies when the lender is a related company: Article 212 of the CGI provides 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” within statutory limits (Article 212, CGI). And deductibility of any interest presupposes that the share capital has been fully paid up: a company whose subscribed capital is not entirely liberated cannot deduct shareholder-loan interest at all. Foreign founders who incorporated with partly paid capital should complete the liberation (pay up the balance into the company bank account and record it) before expecting any interest deduction.

Duration is the clause founders regret most when it is missing. By default, a shareholder current account with no fixed term is repayable on demand, as the next section explains. But banks that finance a young French company routinely demand the opposite: a convention de blocage (blocking agreement) under which the shareholder promises not to claim repayment for two, three or four years, often combined with a subordination of the loan to the bank debt. A Paris Court of Appeal decision of 15 May 2025 (RG 24/05837) shows how seriously courts take that promise. The facts established that the shareholders had signed a four-year blocking and pledge commitment covering 150,000 euros of current accounts when the bank loan was taken out, with one associate alone leaving 30,000 euros blocked until 28 February 2026. After that associate was removed from office and demanded immediate repayment, the court rejected his claim for the 30,000 euros and kept the blocking commitment in force until its expiry (Paris Court of Appeal, Pôle 5, Chambre 9, 15 May 2025, RG 24/05837). The lesson for a founder abroad is symmetrical: sign a blocking agreement only if the bank truly requires it, negotiate its exact duration and amount, insist on an early-release clause if the bank loan is repaid ahead of schedule, and never promise a blocked amount larger than the cash you can genuinely leave untouched.

Corporate approval is the final protective layer, and it differs between a one-person company and a multi-shareholder SAS. Article L227-10 of the 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. Les associés statuent sur ce rapport.” (Article L227-10, Commercial Code). In plain terms, a loan from a director or a shareholder holding more than 10 percent of voting rights is a regulated agreement: it must be disclosed in a report and voted on by the shareholders, even though “Les conventions non approuvées, produisent néanmoins leurs effets” (the same article). Failure to run the procedure does not void the loan, but it leaves the interested person liable for any harmful consequences to the company. In a one-person SAS (SASU), the same article simplifies the formality: “il est seulement fait mention au registre des décisions des conventions intervenues directement ou par personnes interposées entre la société et son dirigeant, son associé unique” (Article L227-10). From abroad, hold the consultation in writing or by videoconference as your articles allow, record the loan in the minutes or the decision register, and file the signed copy with the company records. That paper trail is what the auditor, the bank and a future buyer will ask for first.

II. How Do You Get Repaid, Deduct Interest and Pay Tax as a Non-Resident Lender?

A. Can You Demand Repayment at Any Time While Living Outside France?

The default rule favours the lending shareholder, and the Court of Cassation restated it in 2025 in terms every foreign founder should know. In a dispute about a shareholder whose shares had been bought back without repayment of his current account, the Commercial Chamber recalled that “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” (Court of Cassation, Commercial Chamber, 12 February 2025, appeal no. 23-17.483, full decision on courdecassation.fr). In English: unless the contract says otherwise, any shareholder may demand repayment of his current-account balance at any time, for any reason, because the advance is legally an open-term loan. The Court added that the obligation to pay the share-buyback price and the obligation to repay the current account were independent of each other, so a buyback without repayment does not automatically collapse, but the repayment right itself stands intact.

From abroad, exercise that right with the same discipline you would use for any cross-border debt collection. Send a written demand (mise en demeure) by registered letter with acknowledgment of receipt or by any durable medium your agreement recognises (the French postal registered letter can be sent online from abroad via the postal operator’s electronic registered service), stating the exact balance from the last approved accounts, the agreement date, and a payment deadline of, say, fifteen days to the company’s French bank account details you nominate for the return wire. If the company pays, keep the incoming wire advice against the accounting entry that clears the account. If it does not pay, that letter is the starting point for interest on late payment and for any court claim, and it fixes the date from which a judge will count. Where the company stalls or claims the funds are unavailable, our companion guide to recovering a stuck shareholder loan, interest and blocked repayment from abroad walks through formal notice, court recovery and the insolvency declaration step by step. Claims for payment of a commercial debt between traders prescribe after five years: Article L110-4 of the Commercial Code provides that “Les obligations nées à l’occasion de leur commerce entre commerçants ou entre commerçants et non-commerçants se prescrivent par cinq ans” (Article L110-4, Commercial Code), and the general civil rule in Article 2224 states 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.” (Article 2224, Civil Code). A founder who waits six years to ask for his money back may therefore hold a valid contract and still lose the lawsuit.

The blocking agreement is the one enforceable exception, and the 2025 Paris decision quoted above proves it bites even after a dismissal. The revoked general manager demanded his 30,000 euros immediately; the first judges ordered payment with statutory interest from the demand letter; the Court of Appeal reversed and rejected the repayment claim because the four-year blocking commitment given to the lending bank was still running until 28 February 2026. Neither the revocation nor the shareholder’s personal need overrode the signed promise. Before you sign such a commitment from abroad, check four points: the precise expiry date, whether the block covers the full balance or only part of it, whether interest continues to accrue and be paid during the blocking period, and what happens if the bank loan is refinanced or repaid early. If you are asked to pledge (nantir) the current account as security for the bank loan, understand that the pledge lets the bank intercept the repayment; have the pledge deed reviewed before signing, because it survives a change of management.

Insolvency changes the picture radically, and distance must not delay your reaction. If the company enters sauvegarde (safeguard), redressement judiciaire (judicial reorganisation) or liquidation judiciaire (judicial liquidation), the opening judgment published in BODACC freezes individual repayment claims: you cannot simply wire the money back to yourself, and any repayment obtained after the cessation-of-payments date can be challenged. You must declare (déclarer) your current-account claim to the appointed insolvency representative (mandataire judiciaire) within the statutory deadline running from the BODACC publication, currently two months for creditors domiciled in France and four months for those domiciled abroad. Miss the deadline and the claim is excluded from distributions unless you obtain a court-ordered late filing (relevé de forclusion), which judges grant sparingly. Shareholder current accounts rank as ordinary unsecured claims (créances chirographaires), behind employees, the tax authorities and secured banks; in a liquidation with few assets, they often recover little. That ranking is the strongest argument for keeping shareholder loans proportionate to equity, documenting them irreproachably, and never using them to keep an insolvent company artificially alive, which can trigger personal liability for wrongful trading (insuffisance d’actif) against the director.

B. What Tax Applies to Interest Paid to a Lender Living Abroad, and What Are the Paris Practicalities?

Tax follows the interest in both directions: deduction for the French company, taxation for you as the lender, and a possible withholding at the French border. On the company side, the two ceilings described above apply cumulatively. First, the Article 39 quarterly maximum rate caps deductible interest on amounts made available by shareholders “en sus de leur part du capital” (Article 39, CGI). Interest above that rate is added back to taxable profit in the corporate tax return, which at the standard 25 percent corporate income tax (impôt sur les sociétés) rate directly increases the tax bill. Second, for loans from a related company, Article 212 imposes its own limit and documentation logic, and the general thin-capitalisation and interest-barrier rules can defer or disallow further interest for highly leveraged groups. Zero-interest loans create no deduction and no lender income, which is simple but leaves money on the table when the group could legitimately price the time value of money. Have the French chartered accountant (expert-comptable) compute the deductible fraction each year-end from the published quarterly rates and attach the schedule to the tax file; that one-page schedule is the document the DGFIP auditor always requests.

On the lender side, interest paid by a French company to a person living abroad is French-source income and, as a starting point, suffers a French withholding tax (retenue à la source) collected by the paying company before the wire leaves France. The applicable rate, declaration form and payment timetable depend on whether the lender is an individual or a company and on the double-tax treaty between France and the lender’s country of residence, many of which reduce the withholding to 10, 5 or even zero percent for qualifying beneficial owners, subject to a residence certificate and the treaty claim form. The DGFIP international portal publishes the forms and treaty network, and service-public.fr explains how investment income paid to non-residents is declared. Because the paying company is liable for any shortfall in withholding, agree in the loan contract who bears the withholding cost (gross-up or net-of-tax clause), which treaty the parties rely on, and who provides the residence certificate each year. A founder who moved from London to Dubai mid-loan, for example, may change treaty mid-stream; the applicable treaty is the one of the lender’s residence at the payment date, evidenced by that year’s certificate.

Repayment of principal, by contrast, is not income: the return of the 60,000 euros you lent is a tax-neutral capital flow on both sides, provided the accounts clearly separate principal from accrued interest. Each repayment wire should reference the loan agreement and state the split between principal, interest and any withholding applied. That labelling protects you twice: it prevents the DGFIP from recharacterising an undocumented cash return as a disguised dividend, and it prevents a co-shareholder from arguing that the payment was salary, a dividend advance, or an informal distribution. If the company cannot repay in cash and proposes to convert the loan into shares (a conversion en capital), that is legally a capital increase by set-off (compensation de créance), which requires a statutory auditor’s certificate confirming the claim is liquid and due, a shareholders’ vote, and a filing with the guichet unique followed by an updated Kbis. Do not simply re-label the account “capital” in the books; without the formal increase procedure, the loan remains a loan and the shareholder holds no additional shares.

Paris and Île-de-France add practical specifics worth integrating rather than treating as a separate topic. Companies registered with the Paris greffe (the Paris commercial court registry, one of the busiest in France) file loan-to-capital conversions and related corporate changes through the national guichet unique, but processing backlogs mean you should allow several weeks between the shareholders’ vote and the updated Kbis when planning a conversion. Paris-based companies also deal with the Paris business tax offices for withholding filings and with the Paris URSSAF office for any related payroll questions if the founder cumulates a director’s mandate with employment. Keep a complete bilingual closing file at the Paris registered office or with your Paris accountant: signed loan agreement, blocking agreement if any, wire advices both ways, annual interest computations with the quarterly maximum rates, withholding filings with residence certificates, shareholder minutes approving the regulated agreement, and the current-account ledger. When the DGFIP sends a request for information to a company whose shareholder lives abroad, it typically allows thirty days to respond; a complete file held in Paris turns a stressful cross-border scramble into a same-day reply.

Conclusion

A shareholder loan is the fastest way for a founder living abroad to keep a young French company funded: it needs no registry filing, it can carry interest within the legal ceilings, and by default it is repayable on demand at any moment for any reason. That speed comes with three non-negotiable disciplines. Put the loan in a signed written agreement that fixes the amount, the written interest rate or the zero-interest character, the term or the on-demand nature, and the cross-border payment mechanics. Run the regulated-agreement approval in the shareholders’ minutes or the sole-shareholder decision register so the auditor and the bank find it without asking. And manage the tax border by computing the deductible interest under the Article 39 quarterly ceiling, applying the correct treaty withholding with an annual residence certificate, and labelling every wire as principal or interest. Sign a blocking commitment only deliberately, for a defined amount and duration, because the Paris courts enforce it to the letter even after a dismissal. Handled this way, the compte courant d’associé does exactly what a foreign founder needs: bridge finance that is lawful under banking law, provable from thousands of kilometres away, and repayable when the company can afford it.