You live in London, New York, Dubai or Singapore, and you want to sell, hire or raise money in France. The first legal decision you face is the vehicle: do you form a SAS (société par actions simplifiée, the simplified joint-stock company) or a SARL (société à responsabilité limitée, the limited liability company)? Both limit your liability to the amount you contribute, both give you a French Kbis (the official company registration certificate issued from the commercial court registry, the greffe, after entry in the national company register), and both are incorporated today through the INPI Guichet unique, the single online filing portal. Yet they behave very differently once the company starts running. The SAS lets you write almost any governance you like in the bylaws, the statuts, while the SARL applies a rigid statutory framework that protects each associé (shareholder or member) but slows every change. The director of a SAS pays social charges under the general employee-linked regime, while the majority gérant (manager) of a SARL pays under the separate self-employed regime with its own minimum bills. Choosing the wrong vehicle does not just cost filing fees: it changes what you pay yourself, how you remove a manager who fails, and whether an investor will sign. This guide compares the two companies rule by rule, with the exact articles and two recent Court of Cassation rulings, so that a foreign founder can choose once and choose well. If you have not yet read the general roadmap, start with our step-by-step guide to setting up a company in France as a foreign founder, then use this article to settle the SAS or SARL question.
French acronyms appear everywhere in this process, so keep this key beside you. The greffe is the registry of the commercial court that records companies. The Kbis is the extract that proves your company exists. BODACC (Bulletin officiel des annonces civiles et commerciales) is the official bulletin where company events are published. URSSAF is the agency that collects social contributions. The RBE (registre des bénéficiaires effectifs) is the register of ultimate beneficial owners. IS (impôt sur les sociétés) is French corporate income tax. The CGI (Code général des impôts) is the General Tax Code. The EURL (entreprise unipersonnelle à responsabilité limitée) is a one-person SARL, and the SASU (société par actions simplifiée unipersonnelle) is a one-person SAS.
I. How the SAS and the SARL Differ When You Start From Abroad
A. SAS or SARL: Which Company Matches Your Project, Your Capital, and Your Control Needs?
Start with what the two companies share, because the common ground is reassuring. Article L. 227-1 of the Commercial Code states, word for word: “Une société par actions simplifiée peut être instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leur apport.” In English: a simplified joint-stock company can be formed by one or more persons whose liability for losses is limited to their contributions. Article L. 223-1 says the same for the SARL: “La société à responsabilité limitée est instituée par une ou plusieurs personnes qui ne supportent les pertes qu’à concurrence de leurs apports.” A foreign founder is therefore never risking personal assets beyond the money and assets put into the company, provided the company is run honestly and the founder has not given personal guarantees to a bank or a landlord, which banks routinely ask foreign-owned newcomers to sign.
Both companies can be formed alone. A one-person SAS is called a SASU, and a one-person SARL is called an EURL. The sole associé exercises the powers of the shareholders alone, which suits a founder who wants full control while keeping limited liability. Both can also host a foreign parent company as their sole shareholder, which is the standard way to create a French subsidiary: the parent holds 100 percent of the SASU or EURL, appoints a local or foreign president or gérant, and keeps the French business inside a separate legal person, unlike a branch, which has no legal personality of its own.
Capital is not the obstacle many founders fear. Article L. 223-2 of the Commercial Code provides: “Le montant du capital de la société est fixé par les statuts. Il est divisé en parts sociales égales.” The amount of a SARL’s capital is therefore set freely in the bylaws and divided into equal parts. The SAS works the same way in practice: the founders fix the capital in the statuts, and no significant statutory minimum blocks a foreign founder. Do not read that freedom as an invitation to file one euro of capital. French banks open corporate accounts for companies whose capital looks serious, suppliers check the Kbis and the published accounts, and a company with derisory capital that takes on debt invites creditors to argue mismanagement later. Founders who expect to hire, lease offices or import stock typically contribute several thousand euros, deposit the funds with a bank or a notary, obtain the deposit certificate, file on the Guichet unique, and receive the Kbis a few days later. Practical guidance on each filing step is published by the INPI and the service-public.fr portal.
The real difference lies in governance, and it is decisive. Article L. 227-5 of the Commercial Code says, in one short sentence: “Les statuts fixent les conditions dans lesquelles la société est dirigée.” The bylaws of a SAS set the conditions under which the company is managed. You decide who votes, on what, with which majority, and with which special rights. Voting rights can be multiplied for the founder, reserved matters can require the foreign parent’s written consent, an investor can receive a veto on debt or hiring above a threshold, and a shareholders’ pact can be mirrored inside the statuts so that it binds the company itself. For a foreign group that wants Paris to execute and the head office abroad to control, that contractual freedom is the reason the SAS dominates foreign direct investment in France.
The SARL offers the opposite bargain: protection through rigidity. The Commercial Code writes most of the rules for you. The gérant manages the company, the assemblée générale (the shareholders’ meeting) votes under statutory majorities, and the parts sociales (the SARL’s units, as opposed to the SAS’s freely transferable actions or shares) transfer under a strict approval procedure that keeps strangers out. A founder who runs a family business or a small agency with one or two partners often welcomes that straitjacket, because nobody can rewrite the power balance behind their back. A founder who plans to raise venture capital, distribute employee shares or bring in an American or British fund will find the same straitjacket painful: investors accustomed to preferred shares and board seats routinely refuse the SARL and demand a SAS before wiring funds.
Transfer rules sharpen the contrast. In a SARL, selling parts to an outsider requires the approval of the existing associés, which means a minority partner can block an exit for months. In a SAS, the statuts decide: transfers can be free, subject to approval, locked for a period, or combined with pre-emption rights that let existing shareholders buy first. That single drafting choice often determines whether a future fundraising or buy-out runs smoothly or ends in litigation, so foreign founders should settle it before incorporation rather than after the first dispute.
Representation toward third parties follows the same logic of freedom against framework. Article L. 227-6 of the Commercial Code provides: “La société est représentée à l’égard des tiers par un président désigné dans les conditions prévues par les statuts. 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.” The SAS is represented toward third parties by a president appointed under the conditions set by the bylaws, and that president holds the broadest powers to act in all circumstances in the company’s name within the limit of the corporate purpose. Behind that president, the statuts may create a directeur général (managing director), a board, committees and delegated signatories with any titles the business uses at home, so a foreign group can reproduce its global governance in French. Article L. 223-18 gives the SARL its mirror rule: “La société à responsabilité limitée est gérée par une ou plusieurs personnes physiques. Les gérants peuvent être choisis en dehors des associés.” The SARL is managed by one or more natural persons, and the managers can be chosen outside the shareholders. There is no board, no share classes, no tailor-made bodies: one or more gérants, who must be individuals, run the company within a statutory frame.
Three typical foreign-founder profiles illustrate the choice. A solo consultant moving clients to Paris who wants low running costs and simple decisions often takes an EURL or SASU with themselves as manager, and the decision turns on the social-charge analysis in the next section. Two co-founders splitting 50/50, one in Paris and one abroad, usually need a SAS, because the SARL’s statutory majorities deadlock at 50/50 while SAS bylaws can give a casting vote, a buy-out clause and a deadlock resolution path. A foreign parent creating a French sales subsidiary with venture investors waiting in the wings should form a SASU from day one, since converting later costs unanimity and auditor fees, as explained in Part II. The wrong default is the SARL chosen by habit because an adviser called it simpler: simpler at filing, often more expensive at every later step.
B. What Your Own Position Costs: Taxed Salary in a SAS or Independent Gérant in a SARL?
Many foreign founders discover the cost of their choice only when the first URSSAF bill arrives, so this section puts numbers on logic without quoting rates that change every year. The president of a SAS, and any dirigeant the bylaws designate, belongs to the general social security regime as an assimilated employee. Article L. 311-3 of the Social Security Code lists, at paragraph 23: “23° Les présidents et dirigeants des sociétés par actions simplifiées et des sociétés d’exercice libéral par actions simplifiées ;” The presidents and managers of simplified joint-stock companies are covered persons. In practice that means social contributions are charged as a percentage of actual salary paid. A president who takes no salary pays no contributions, but accrues no health, pension or daily-allowance rights either, and a president who pays themselves a real executive salary faces the full weight of French employer and employee contributions, roughly three-quarters on top of net pay once all schemes combine, in exchange for genuine coverage. Crucially, an assimilated employee has no unemployment insurance: a president who stops being paid gets no allocation chômage (unemployment benefit) from the salaried scheme, whatever the contributions paid. Founders arriving from countries where directors insure themselves against job loss must hear that point before they set their salary, not after.
The gérant majoritaire (the manager who holds more than half of a SARL’s parts, alone or with family) belongs to a different world: the independent workers’ regime for non-salaried workers. Contributions there are partly flat-rate minimums billed even in a loss-making year, plus proportional charges once profits appear, and the coverage, particularly for pensions and daily allowances, is thinner than the general regime for an equivalent cost at low incomes. A young profitable consultancy can therefore cost its owner more in a SARL than in a SAS at the same take-home pay, while a founder who expects lean early years may resent paying minimum contributions on zero drawings. The gérant minoritaire ou égalitaire (a manager holding half or less) rejoins the assimilated-employee regime like a SAS president, which is why 50/50 co-founders sometimes engineer the split with that status in mind. Foreign founders should model both routes with an accountant before signing the statuts, using the current scales published by URSSAF, because the gap between the two regimes often exceeds the entire first-year legal budget.
Salary is only half the pay question; the other half is dividends, and here the two vehicles converge before diverging again at the border. Both the SAS and the SARL pay corporate income tax on their profits first. Article 219 of the CGI states the current rule plainly: “Le taux normal de l’impôt est fixé à 25 %.” The standard rate of the tax is set at 25 percent. Only after that tax can the shareholders vote a distribution, and only if the accounts show distributable reserves, which the annual approval process confirms. A founder who confuses revenue with distributable profit and wires money home mid-year risks withdrawing fictitious dividends, a classic ground for liability that the annual-accounts discipline exists to prevent.
When dividends cross a border to a founder or parent with no French tax residence, France applies withholding at source. Article 119 bis of the CGI 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.” Investment income of the listed kinds triggers withholding at the rate set by Article 187 when it benefits persons whose seat is in France or abroad or who have no tax domicile in France. The practical machinery is published by the impots.gouv.fr portal. Tax treaties signed by France then reduce or eliminate that withholding for residents of partner states, provided the beneficial owner proves residence with the proper certificate before payment, and European parent companies may qualify for exemption regimes under conditions the treaty and the CGI define. Founders who simply wire the gross dividend and assume the treaty applied by itself learn the cost of that assumption when the French subsidiary is assessed for the missing withholding plus penalties. Groups outside the European Union that receive French-source dividends without any local presence should also check whether they need a fiscal representative, as explained in our guide on appointing a fiscal representative in France.
The salary-against-dividends trade-off therefore looks like this for a foreign founder. Salary is deductible for corporate tax, builds social rights, and funds a visa or a mortgage file, but it carries heavy social charges and income tax at once. Dividends are paid from after-tax profit, bear no social charges for most non-resident shareholders, but suffer withholding that treaties only partly soften, and they require approved accounts and a lawful distribution vote. Most owner-managers combine a modest salary that covers health and pension with an annual dividend voted after the accounts, and they revisit the mix each year as profits, residence and treaty positions evolve. Neither the SAS nor the SARL changes that arithmetic; the vehicle changes the social regime of the manager, the flexibility of share classes that can carry different dividend rights, and the ease of bringing in the investors who will share those dividends.
II. Running the Company and Taking Money Out Without Costly Mistakes
A. How Do You Remove a Manager, Approve Accounts, and Survive Heavy Losses?
The clause founders skip at incorporation is the one that decides the first crisis: how do we remove the manager. In a SAS, the answer is whatever the statuts say, and the Court of Cassation enforces that answer strictly. On 9 July 2025 the Commercial Chamber, in a ruling published in the Bulletin under appeal number 24-10.428, recalled the rule in these terms: “Il résulte de ces textes que les statuts de la société par actions simplifiée fixent les conditions dans lesquelles celle-ci est dirigée, notamment les modalités de révocation de ses dirigeants. Si une décision des associés peut compléter les statuts sur ce point, elle ne peut y déroger, quand bien même aurait-elle été prise à l’unanimité.” In English: the bylaws of a simplified joint-stock company set the conditions under which it is managed, including how its managers are removed; a shareholders’ decision may supplement the bylaws on this point but cannot contradict them, even unanimously. Read the full ruling on the Cour de cassation website, appeal 24-10.428 of 9 July 2025. The facts show why the rule bites: the bylaws allowed removal of the directeur général at any time without cause by the president, while a unanimous shareholders’ meeting had approved side conditions limiting removal to three defined cases, and the Court held the side document unenforceable against the bylaws.
The same chamber had already said so on 12 October 2022, in appeal number 21-15.382: “Il résulte de la combinaison des articles L. 227-1 et L. 227-5 du code de commerce que les statuts de la société par actions simplifiée fixent les conditions dans lesquelles la société est dirigée, notamment les modalités de révocation de son directeur général. Si les actes extra-statutaires peuvent compléter ces statuts, ils ne peuvent y déroger.” The bylaws set the management conditions including removal of the managing director; side agreements may supplement the bylaws but cannot contradict them. See the Cour de cassation ruling of 12 October 2022, appeal 21-15.382. For a foreign founder the lesson is operational, not academic. If you want your SAS president removable at will, write removal ad nutum, without cause or compensation, into the statuts themselves. If you promise a hired director protection or a golden parachute, put it in the statuts or in an amendment voted under the statutory procedure, never in a side letter or meeting minutes that contradict the bylaws. And if you are the director being hired from abroad, reverse the check: read the statuts before signing, because a side promise the bylaws contradict will not survive cassation.
In a SARL the statute, not the bylaws, writes the removal rule, and it protects the gérant differently. Article L. 223-25 of the Commercial Code provides: “Le gérant peut être révoqué par décision des associés dans les conditions de l’article L. 223-29 , à moins que les statuts prévoient une majorité plus forte. Si la révocation est décidée sans juste motif, elle peut donner lieu à des dommages et intérêts. En outre, le gérant est révocable par les tribunaux pour cause légitime, à la demande de tout associé.” A manager can be removed by shareholder decision under statutory majorities unless the bylaws require a higher one; removal without just cause can give rise to damages; and any shareholder can ask the courts to remove a manager for lawful cause. Three consequences follow for a foreign owner. First, a majority shareholder can remove a minority gérant, but pays damages if no genuine management fault supports the removal, so the file must document the fault before the vote, not after. Second, a 50 percent gérant cannot be removed by the co-associé alone, which turns every 50/50 SARL into a potential deadlock that only negotiation or a court order unlocks. Third, a minority shareholder oppressed by an entrenched gérant is never helpless: the courts can remove the manager for lawful cause at any shareholder’s request. Founders who choose a SARL for its simplicity should price that rigidity: removing a failing manager costs a documented fault file and sometimes a court case, where a well-drafted SAS would have needed one board vote.
Beyond removals, running either company means an annual discipline foreign founders often underestimate. Each year the shareholders must approve the accounts, vote on the allocation of profits, renew or replace the managers, and file the approved accounts at the greffe, which publishes a notice in BODACC. Missed filings draw reminders, then a court injunction from the president of the commercial court, then fines, and our companion guide on missed annual accounts filings walks through the fix. The discipline matters doubly when the company loses money. Article L. 223-42 of the Commercial Code provides for the SARL: “Si, du fait de pertes constatées dans les documents comptables, les capitaux propres de la société deviennent inférieurs à la moitié du capital social, les associés décident, dans les quatre mois qui suivent l’approbation des comptes ayant fait apparaître cette perte s’il y a lieu à dissolution anticipée de la société.” If losses shown in the accounting documents push equity below half of the share capital, the shareholders must decide within four months after approving those accounts whether to dissolve the company early. If they continue, they must rebuild equity to at least half the capital by the end of the second financial year following the loss, or reduce the capital, with the resolution published as the article requires. The SAS follows equivalent recapitalisation logic through the rules the Code applies to it. Foreign owners who inject cash as unstructured shareholder loans instead of formal capital increases discover at this stage that loans do not rebuild equity: only a capital increase, a documented waiver of shareholder advances into reserves, or a formal capital reduction restores the ratio. Calendar the four-month decision the day the accounts are approved, because the greffe, the auditors and a future buyer will all check the dates.
B. How Do You Pay Yourself From Abroad and Switch Vehicles If You Chose Wrongly?
Paying yourself from a French company while living abroad combines the three threads of this guide: corporate profit, social charges and border tax. The order of operations never changes. First the company earns revenue and pays its suppliers and staff. Then it pays corporate tax at the standard 25 percent rate of Article 219 on its taxable profit. Then the shareholders, on approved accounts showing distributable sums, vote either a salary policy for the managers or a dividend distribution, or both. Salary paid to a president or gérant who works in France triggers French payroll withholding and URSSAF contributions under the regime of Part I, wherever the manager’s passport was issued. Dividends wired to a non-resident trigger the withholding machinery of Article 119 bis, softened only by an applicable treaty and a residence certificate produced on time. Every shortcut around that order, interim transfers labelled as advances with no paperwork, dividends voted without approved accounts, treaty relief claimed without a certificate, converts a cash-flow convenience into a tax reassessment with penalties, and the reassessment lands on the French company, which is the easiest target the administration can seize.
Paperwork decides how much of the payment survives. A salary needs an employment or mandate basis, monthly payslips, payroll filings and a residence position consistent with where the work is actually done. A dividend needs approved accounts, a distribution resolution that states the amount per share and the payment date, a withholding computation with the treaty rate applied, and the certificate of residence in the file before the wire. A shareholder loan, the compte courant d’associé (the shareholder current account through which an owner lends to the company), needs a written agreement, an interest rate consistent with market practice, and repayment terms the company can actually meet. Founders who mix the three, taking unlabelled wires whenever the balance allows, create the worst of all worlds: sums the administration reclassifies as salary with social charges, or as constructive dividends with withholding, plus penalties for bad faith. The discipline is boring and it is the whole game: label every euro before it moves, and keep the resolution that authorised it.
Residence overlays everything. A founder who directs the French company from abroad while keeping a home, family or management seat in France may be treated as French tax resident on worldwide income, while a founder genuinely settled abroad stays taxable in France mainly on French-source income and under the treaty’s allocation rules. Social security follows yet another map of regulations and bilateral agreements, and working physically in two countries without a posting certificate or an applicable-regulations determination produces double bills that take years to unwind. None of this is a reason to avoid France; it is a reason to fix residence, social coverage and pay mix in one conversation with counsel before the first payment, because each later correction costs a multiple of the planning fee.
When the vehicle itself proves wrong, French law offers a defined exit: transformation. The operation changes the company’s legal form without creating a new legal person, so contracts, debts, the Kbis number and the history survive, while the governance switches from one regime to the other. The price of that continuity is consent. Article L. 227-3 of the Commercial Code states: “La décision de transformation en société par actions simplifiée est prise à l’unanimité des associés.” A decision to convert into a SAS is taken unanimously. Every associé must agree, which means the minority partner a founder hoped to sideline can block the conversion and must be bought out or persuaded first. Conversions in the other direction follow Article L. 223-43, which requires unanimity for some destinations and, for conversion into a listed-type company, a majority with an auditor’s report on the company’s position: “La décision est précédée du rapport d’un commissaire aux comptes inscrit, sur la situation de la société.” The decision is preceded by a report from a registered statutory auditor on the company’s position. In practice a SARL-to-SAS conversion therefore means an auditor’s valuation report, a unanimous extraordinary resolution, amended statuts rebuilt from scratch to use SAS freedom, and filings on the Guichet unique with publication in a legal notices journal and BODACC. Budget several thousand euros and several weeks, longer if an associés’ dispute simmers underneath.
That cost explains the planning advice this article closes its technical part with. If fundraising, employee equity or an American parent’s governance is anywhere on the two-year horizon, form the SAS now and avoid paying for unanimity later. If the project is a small service business with stable partners and no outside capital, the SARL’s rigidity is a cheap form of mutual protection, and the savings on bespoke bylaws are real. If the capital is already raised in a SARL and investors demand a SAS, start the conversion before the term sheet expires: commission the auditor, negotiate the buy-out of any reluctant associé, and draft SAS bylaws that carry over the approval clauses and pre-emption rights the SARL enforced by statute. And whichever vehicle you hold, keep the annual machinery turning, approved accounts, filed at the greffe, equity above half the capital, managers removable under a clause you actually wrote, because buyers, banks and courts value a company on its paperwork before they value it on its profits. The full text of every article cited here is freely verifiable on Légifrance.
Conclusion
The SAS and the SARL both give a foreign founder limited liability and a French Kbis, and the choice is therefore never about safety but about control, cost and future freedom. The SAS hands the founders a blank page: bylaws that set management, removal, transfers and investor rights almost at will, a president with the broadest representative powers, and a social regime that taxes real salaries while leaving undistributed profits alone, all policed by a Court of Cassation that enforces the bylaws against side deals without mercy. The SARL hands the founders a finished frame: a gérant with statutory powers, removal only on documented cause failing which damages follow, transfers locked by statutory approval, and an independent-workers social regime with minimum bills that lean years cannot avoid. Pay in both cases runs the same gauntlet of 25 percent corporate tax, approved accounts, and withholding at the border softened only by treaties proved on time. Convert a SARL into a SAS later and unanimity plus an auditor’s report will bill you for the freedom you declined at the start. Founders who match the vehicle to the two-year plan, write the removal clause before the honeymoon ends, and label every euro that crosses a border, get from France exactly what they came for: a company that hires, sells and distributes without surprises. The ones who choose by habit get the same France, with interest and penalties.
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