You formed a SAS (société par actions simplifiée, the simplified joint-stock company most foreign founders choose in France), you were appointed president, the Kbis (the official company identity extract issued by the greffe, the clerk’s office of the commercial court) bears your name, and money is starting to come in. One question now dominates every other: how do you lawfully pay yourself while living abroad? Two channels exist, salary and dividends, and they obey completely different legal logics. Salary runs through the French social security system from the first euro, with contributions collected by URSSAF (the body that collects social contributions) and declared through the DSN (the monthly electronic payroll return). Dividends run through company law and tax law: they require voted profits, a shareholder decision taken collectively, and they trigger a 12.8% levy for founders who are French tax residents or a withholding tax for founders who are not. Choosing badly means paying contributions you could have avoided, leaving deductible salary on the table while the company pays corporation tax at 25%, or voting yourself money that a co-founder or a court later unwound. This guide explains both routes with the exact texts that govern them, two recent Court of Cassation rulings that every foreign president should know, and the shareholder votes that secure whatever you take. It complements our step-by-step guide to setting up a company in France as a foreign founder, from bank account to Kbis, VAT and first hire, which covers the creation of the company itself.

I. The Salary Route: A SAS President Covered by the General Social Scheme

A. How a Foreign President Ends Up Affiliated Like an Employee Without Being One

The first surprise for most foreign founders is that the president of a SAS is covered by the general social security scheme, the régime général, even though the president is not an employee and has no employment contract. The mechanism is a statutory assimilation. A SAS itself is defined by the Commercial Code in these terms: “Une société par actions simplifiée peut être instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leur apport.” The company is represented toward third parties by a president appointed under the conditions set by the articles: “La société est représentée à l’égard des tiers par un président désigné dans les conditions prévues par les statuts.” And that president holds sweeping powers: “Le président est investi des pouvoirs les plus étendus pour agir en toute circonstance au nom de la société dans la limite de l’objet social.” Because the president acts with such authority, social security law attaches him to the general scheme by an express listing. Article L. 311-3 of the Social Security Code provides, in its paragraph 23: “Les présidents et dirigeants des sociétés par actions simplifiées et des sociétés d’exercice libéral par actions simplifiées” are among the persons subject to the obligation of article L. 311-2. In plain terms, from the day your appointment takes effect, any remuneration paid to you as president triggers employee-style social contributions, both the employer share paid by the company and the employee share withheld from your pay, at the rates set by the Social Security Code and declared each month through the DSN.

This assimilation holds whether you live in Paris, London, New York or Dubai, and whether you hold 100% of the shares or only a fraction. Residence abroad does not remove the affiliation, because the affiliation follows the office held in a French company, not the personal address of the office-holder. It also holds even if you draw no salary at all: with zero remuneration, zero contributions are due, but the status is dormant, not extinguished. Many foreign founders deliberately start with no presidential salary while the company has no revenue, precisely to avoid running contributions on nothing, and only vote themselves a salary once cash flow allows. That sequencing is lawful, but it must be conscious: the moment a salary is paid, the DSN filings, the payslips and the URSSAF payments must follow, and URSSAF can reassess contributions on sums it considers disguised remuneration. The boundary of who counts as a director for affiliation purposes was tested very recently before the Court of Cassation. In a ruling of 5 June 2025, pourvoi No. 23-13.887, concerning a SAS and an URSSAF reassessment on the remuneration of the president of its supervisory board, the Second Civil Chamber recalled the governing text word for word: “Selon l’article L. 311-3, 23°, du code de la sécurité sociale, dans sa rédaction applicable au litige, sont obligatoirement affiliés aux assurances sociales du régime général les présidents et dirigeants des sociétés par actions simplifiées et de sociétés d’exercice libéral par actions simplifiées.” The Court added the limiting principle that protects persons who only supervise: “ayant pour seule mission de contrôler les organes de direction de la société sans en assumer la gestion, les membres du conseil de surveillance ne sont en principe pas affiliés aux assurances sociales du régime général, sauf à démontrer qu’ils exercent en réalité une fonction de direction.” In that case the reassessment was upheld because the supervisory board president was shown to exercise real management functions, designated in the BODACC (the official bulletin in which corporate registrations and appointments are published) as a person with habitual power to bind the company. For a foreign founder who is the appointed president, the lesson is direct: you are the paradigm case of affiliation, and only a purely supervisory role, with no management act, escapes it.

The contribution base itself is defined by statute. Article L. 242-1 of the Social Security Code states: “Les cotisations de sécurité sociale dues au titre de l’affiliation au régime général des personnes mentionnées aux articles L. 311-2 et L. 311-3 sont assises sur les revenus d’activité tels qu’ils sont pris en compte pour la détermination de l’assiette définie à l’article L. 136-1-1” Every euro of presidential salary therefore feeds the contribution base, and the company must register as an employer, obtain its employer accounts, and file. Foreign founders sometimes assume that because they are already covered by health insurance or a pension scheme in their home country, France will simply stand aside. Within the European Union, posted-worker and multi-state rules can coordinate coverage, but they require formal certificates and prior applications; outside the European Union, bilateral social security agreements are narrow and rarely cover a company directorship. Nothing in the affiliation text makes residence abroad an exemption, so the working assumption for a president paid by a French SAS must be full French affiliation on that salary, with any coordination mechanism treated as an exception to be built deliberately, with paperwork, before the first payslip.

The contrast with the rival company form sharpens the point. A SARL (société à responsabilité limitée, the limited liability company) is managed by one or more natural persons: the Commercial Code provides that the SARL is run by gérants, and a majority gérant falls under the self-employed scheme, the travailleurs indépendants, whose contributions are computed on a different base: “Les cotisations de sécurité sociale dues par les travailleurs indépendants non agricoles ne relevant pas du dispositif prévu à l’article L. 613-7 sont assises sur l’assiette définie à l’article L. 136-3.” The SAS president pays the higher, employee-style contributions, but accrues the general scheme’s protection, including the CPAM (caisse primaire d’assurance maladie, the local health insurance fund) coverage and validation of pension quarters, while the majority SARL manager pays lower contributions with thinner protection. For a foreign founder who already has health coverage abroad and cares mostly about net cash, the SARL can look cheaper; for one who wants French health rights, maternity coverage, and a French pension record, the SAS assimilation is a feature, not a bug. The choice between the two forms is therefore also a choice of social regime, and it should be made with the contribution logic in view, not discovered afterwards on the first URSSAF notice.

B. Why a Deductible Salary Changes the Corporation Tax Equation

The second pillar of the salary route is tax deductibility. A salary paid to the president, including the employer share of social contributions, is a charge of the financial year that reduces the company’s taxable profit, provided it is booked, declared and actually paid for real management work. The symmetry is written into the General Tax Code. Article 62 provides: “Les traitements, remboursements forfaitaires de frais et toutes autres rémunérations sont soumis à l’impôt sur le revenu au nom de leurs bénéficiaires s’ils sont admis en déduction des bénéfices soumis à l’impôt sur les sociétés par application de l’article 211”, even where the financial year closes at a loss. Read from the company’s side, the same euro cannot be both a non-deductible distribution and deductible pay: what qualifies as remuneration for genuine duties leaves the corporate tax base, and what is taxed in the hands of the director as salary has first reduced the profit taxed at company level. The company-level rate is fixed by article 219 of the General Tax Code: “Le taux normal de l’impôt est fixé à 25 %.” Every euro of justified presidential salary therefore saves up to twenty-five cents of corporation tax, the IS (impôt sur les sociétés), while dividends, by contrast, are paid out of after-tax profit and never reduce it.

A simplified comparison makes the trade-off concrete. Imagine a French SAS with 100,000 euros of profit before presidential pay. If it pays no salary and distributes everything, the company first pays corporation tax at 25%, leaving 75,000 euros available for dividends, and the founder then bears the dividend levies described in Part II below. If instead it pays the founder a gross salary of 60,000 euros plus employer contributions, the taxable profit falls to 100,000 minus the full salary cost, so the corporation tax bill falls proportionally, and the founder receives cash that builds French social rights. Which route leaves more net cash in the founder’s pocket depends on the contribution rates applicable that year, the founder’s personal income tax situation, and whether the founder is tax resident in France or abroad. No article can give a universal winner, because the variables move with legislation and with personal circumstances. But the structure of the choice is stable: salary converts 25%-taxed corporate profit into personally taxed income plus social protection, at the price of immediate, heavy contributions; dividends skip the contributions but are paid from profit that has already borne the full 25%.

Two practical consequences follow for founders living abroad. First, the salary must correspond to real duties and be formally set. In a SAS, the articles of association decide how remuneration is fixed, and the corresponding resolution should be minuted, signed and kept with the corporate records, because both the tax administration and URSSAF can ask on what basis a sum was paid. A monthly transfer labelled as salary, with no corporate decision behind it and no payslip, invites reclassification in both directions: URSSAF may treat undocumented transfers as salary anyway and claim late contributions with surcharges, while the tax administration may refuse the deduction if the sum looks like a disguised distribution. Second, the founder’s personal tax residence determines where the salary is taxed and at what mechanics. A founder who is tax resident in France declares the salary as employment-type income; a founder who lives abroad and performs the duties abroad will generally be taxable in the state of residence under the applicable double tax treaty, with France sometimes retaining a right to tax directors’ fees connected to a French company. Treaty analysis is therefore inseparable from the salary decision, and it must be done before the pay starts, country by country, because the answer for a founder in London is not the answer for a founder in Dubai or Singapore. The salary route is powerful, but it is an administered route: affiliation, payslips, DSN, minutes, treaty position. Each element has a text behind it, and each missing element has an administration ready to price it.

II. The Dividend Route: Voted Profits, Levies, and the Non-Resident Withholding

A. No Profits, No Vote, No Dividends: The Levy and the Withholding That Follow

Dividends obey company law first. In a SAS, the articles determine which decisions must be taken collectively by the shareholders, in the forms they provide, but the law reserves certain attributions to collective decision in all cases. Article L. 227-9 of the Commercial Code states: “Les statuts déterminent les décisions qui doivent être prises collectivement par les associés dans les formes et conditions qu’ils prévoient.” Annual accounts and profits are among the matters exercised collectively by the shareholders under the conditions set by the articles. Concretely, dividends can only be paid out of distributable profit as shown by approved accounts, and only after the shareholders, or the sole shareholder, have voted the allocation of the year’s result between reserves, retained earnings (report à nouveau) and distribution. A foreign sole shareholder can hold this decision by written consultation or in a meeting he convenes himself, even from abroad, provided the articles allow it and the formalities are respected; with co-founders, the majority rules of the articles apply, and the minority’s rights begin exactly where the majority’s power to pile profits into reserves year after year becomes systematic and purposeless. A founder who simply wires himself company money without accounts, without a result to distribute and without a vote has not paid a dividend; he has taken an irregular distribution that can be reclaimed, taxed as salary, or worse.

Once a dividend is regularly voted, tax law takes over, and the founder’s tax residence splits the analysis in two. For a founder who is fiscally domiciled in France, article 117 quater of the General Tax Code provides: “Les personnes physiques fiscalement domiciliées en France au sens de l’ article 4 B qui bénéficient de revenus distribués mentionnés aux articles 108 à 117 bis et 120 à 123 bis sont assujetties à un prélèvement au taux de 12,8 %” This 12.8% levy is collected at payment and credited against the income tax due on the dividend, within the flat-rate mechanism organized by article 200 A of the same code, which provides that “L’impôt sur le revenu dû par les personnes physiques fiscalement domiciliées en France au sens de l’article 4 B à raison des revenus, gains nets, profits, distributions, plus-values et créances énumérés aux 1° et 2° du A du présent 1 est établi par application du taux forfaitaire prévu au B du présent 1”. A founder who lives in France and takes dividends therefore faces a two-stage cost: corporation tax at 25% inside the company, then the flat-rate income tax mechanism on the dividend received. Whether that total cost beats salary depends on the numbers of the year, but the comparison must always start from after-tax profit, never from turnover.

For a founder who lives abroad and is not fiscally domiciled in France, the mechanism is different and harsher in its mechanics, though treaties often soften it. Article 119 bis of the General Tax Code provides: “Les revenus de capitaux mobiliers entrant dans les prévisions des articles 118,119, 238 septies B et 1678 bis donnent lieu à l’application d’une retenue à la source dont le taux est fixé par le 1 de l’article 187″, 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.” The French company itself must withhold at payment and remit to the Treasury; the founder receives the net. The applicable double tax treaty between France and the state of residence then determines whether the treaty rate caps the French withholding and whether the residence state taxes the dividend with a credit. A founder in a treaty state with a reduced dividend rate pays less French withholding than the domestic statutory rate, but must claim the treaty benefit through the proper forms and residence certificate before or after payment, depending on the procedure. A founder in a state with no treaty, or who files no claim, bears the full domestic rate. The practical checklist before any dividend to a founder abroad is therefore short and strict: approved accounts showing distributable profit, a collective decision allocating it, computation of the withholding at the correct domestic or treaty rate, timely remittance by the company, and a certificate trail the founder can use at home. Each missing step converts a cheap distribution into an expensive dispute.

One further dividend trap deserves explicit mention because it catches foreign sole shareholders who assume a company with one owner needs no formalities. Even alone, the founder must still approve the accounts and allocate the result in a dated, signed decision kept with the registers. The vote is not theatre; it is the legal act that transforms accounting profit into a claim the shareholder can collect. Banks, auditors and buyers in a future sale all ask for these decisions, and a dividend paid without them can be challenged as a fictitious distribution. The discipline is symmetrical with salary: undocumented salary risks reclassification as a distribution, undocumented drawings risk reclassification as salary or as an unlawful taking. In both directions, paper protects cash.

B. The Vote That Sets Pay Binds Everyone, and Only Narrow Grounds Undo It

Whether the founder takes salary, dividends or a mix, the amounts rest on shareholder decisions, and those decisions have a legal strength that cuts both ways: they protect the founder against later second thoughts, but they also bind the founder once voted. The leading recent illustration is a Court of Cassation ruling of 13 January 2021, pourvoi No. 18-21.860, in which a buyer who had just taken over a SAS refused to pay exceptional premiums voted to the former manager by pre-sale shareholder meetings, arguing they were abusive and contrary to the company’s interest. The Commercial Chamber quashed the appeal court’s annulment and laid down the rule in terms worth quoting exactly: “une délibération de l’assemblée générale des associés d’une société octroyant une rémunération exceptionnelle à son dirigeant ne peut être annulée qu’en cas de violation des dispositions impératives du livre II dudit code ou de violation des lois qui régissent les contrats, et non au seul motif de sa contrariété à l’intérêt social, sauf fraude ou abus de droit commis par un ou plusieurs associés pour favoriser ses ou leurs intérêts au détriment de ceux d’un ou plusieurs autres associés.” A resolution granting exceptional remuneration to the manager cannot be annulled merely because a judge finds it excessive or contrary to the corporate interest; annulment requires a breach of mandatory company-law provisions or of contract law, or else fraud or abuse of rights by one or more shareholders favouring their interests to the detriment of others. For a foreign founder, the message is that a properly voted remuneration is remarkably solid: a new co-founder, a new majority, or a buyer with regrets cannot simply refuse to pay what the shareholders validly decided.

The mirror image matters just as much. Because only narrow grounds undo a voted remuneration, a founder who votes himself an excessive premium on the eve of selling his shares, thirteen times the annual result as in the 2021 case, invites the fraud and abuse analysis the Court expressly reserved. Between co-founders, the majority shareholder who votes his own pay while starving the minority of dividends walks into the classic abuse-of-majority territory: a decision contrary to the corporate interest taken with the sole design of favouring the majority to the minority’s detriment. The 2021 ruling does not weaken that doctrine; it channels it, by insisting that the claimant prove the violation, the fraud or the abuse rather than relying on a general sense of excess. Foreign founders in 50/50 or majority-minority SAS structures should therefore treat every pay vote as a potential exhibit: state the duties performed, keep the amounts proportionate to the company’s results, record the business reasons in the minutes, and vote dividends and reserves with a coherent policy rather than opportunistic swings. A file that reads as management will survive; a file that reads as extraction will not.

Two drafting precautions in the articles make all of this easier from abroad. First, state expressly who fixes the president’s remuneration, by what procedure, and whether written consultation and videoconference are allowed, so that a pay decision taken while the founder is outside France cannot be attacked for defective form. Second, give the rules for current-account advances (comptes courants d’associés, the shareholder loan accounts through which a founder lends money to his company) their own clause, because founders living abroad constantly mix three different transfers: salary for work, dividends for shares, and repayments of loans they made to the company. Only the first two are income; loan repayments return capital the founder had advanced. Confusing them in the bank statements creates the exact reclassification risk described above. Separate resolutions, separate labels, separate accounting lines: the founder who keeps the three channels distinct can defend each of them with its own text, while the founder who blends them hands every administration the argument it needs.

Conclusion

A foreign founder who presides over a French SAS while living abroad pays himself through two regulated channels, not one informal tap. Salary draws on the general social scheme by express statutory assimilation, builds French protection, and reduces the company’s 25% corporation tax base, at the price of full contributions from the first euro and a payroll discipline of minutes, payslips and monthly returns. Dividends draw on voted, distributable profit, pass through the 12.8% levy for French tax residents or the withholding mechanism for founders abroad with its treaty procedures, and never reduce corporate profit. The shareholder vote is the lock on both doors: it creates the right to be paid, and since the Court of Cassation’s 13 January 2021 ruling it can only be broken on narrow, proven grounds, while the 5 June 2025 ruling confirms that real management means real affiliation. The winning practice is therefore a yearly pay policy rather than ad hoc drawings: fix the salary already in the articles’ procedure, vote it, declare it and affiliate it; approve the accounts, allocate the result, compute the levy or the withholding, and distribute only what the vote allows. Run that cycle once, with the texts beside you, and the second year becomes routine; skip it, and every euro you take remains contestable by a co-founder, a buyer, URSSAF or the tax administration.