You wired 50,000 euros from London, New York or Dubai to your new French company, and your French accountant booked it as “compte courant d’associé”. You did not increase the capital, you signed nothing at the bank, and now the money sits in the company books under your name. What exactly did you do, can you take the money back whenever you want, and will the French tax administration accept the interest your company pays you? For a foreign founder, this single bookkeeping line answers three urgent questions at once: how to fund the company quickly without a capital increase, how to recover the funds from abroad, and how to avoid a painful tax reassessment later. French law gives this mechanism a precise name, the shareholder current account, and surrounds it with strict company-law and tax-law gates. Used correctly, it is the fastest and most flexible way for a foreign owner to finance a French SAS or SARL. Used carelessly, it triggers regulated-agreement disputes, non-deductible interest and demands for repayment at the worst possible moment. This guide explains both sides in plain English, with the exact legal texts and court decisions behind each rule.

I. How a Foreign Shareholder Living Abroad Legally Advances Personal Money to a French Company

A. What Your French Accountant Means by a Shareholder Current Account and Why Foreign Founders Use It

A shareholder current account, in French a compte courant d’associé, is a loan you make to your own company, in addition to your capital contribution. The vocabulary confuses every foreign founder at first, so let us fix it. The capital (capital social) is the money or assets written into the articles of association (statuts) when the company is formed or when a capital increase is registered; it can only come back to you through a formal capital reduction, a dividend distribution, or the liquidation of the company. The current account is everything else you leave at the company’s disposal: a wire from your personal account in London to pay the first rents, the invoices you paid yourself while waiting for the corporate bank account to open, the cash advance that covers the first salaries. Your accountant records these sums on a dedicated ledger account in your name, and the company owes them back to you as a creditor debt, not as an owner distribution.

French law treats this advance as a genuine loan. Article 1892 of the Civil Code defines the loan for consumption as follows: “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.” Money you transfer to your French company fits this definition exactly: the company spends it and owes you back the same amount. That qualification matters because it carries the whole law of loans with it: proof of the transfer, interest only if agreed, and repayment according to the agreed terms or on demand.

You may wonder why a private individual is allowed to lend money at all, since banking in France is a regulated monopoly. The answer sits in Article L. 511-7 of the Monetary and Financial Code, which lists the operations that the banking monopoly defined in Article L. 511-5 leaves outside the prohibition. Shareholder advances belong to these authorised exceptions: a shareholder, like a group company for treasury operations, may advance funds to the company outside the banking circuit, provided the applicable conditions are met. The official business portal confirms the practical reading: associates, officers or employees may place funds at the company’s disposal as current-account advances, and these advances are treated as interest-bearing loans (Service-Public Entreprendre, shareholder current account: operation and taxation). In other words, the moment your wire lands on the company account and is booked in your name, you hold a creditor claim against your own French company.

For a foreign founder, three practical points follow. First, the advance must be traceable. A wire transfer from your personal foreign account to the French corporate account, labelled as shareholder advance, with the bank statements kept, is the proof that the money is a loan and not a hidden capital contribution or unexplained revenue. Cash deposits without documentation invite the tax administration to reclassify the sum. Second, the advance should be booked promptly and separately per lender: your accountant opens one current-account ledger per associate, records each payment and each repayment, and computes interest if agreed. Third, interest is never automatic. If no rate was agreed in writing, the advance is deemed interest-free, and you cannot claim interest retroactively. A short written agreement (convention de compte courant) setting the amount or ceiling, the interest rate, and the repayment terms protects both you and the company, and it becomes the reference document in any later dispute with a co-shareholder, a bank, or the tax office.

Foreign founders often ask whether they can lend in dollars, pounds or dirhams from abroad. Yes, provided the bookkeeping converts the advance into euros and exchange differences are tracked. Keep the foreign bank advice, the conversion slips and the euro credit on the French account together: if you later demand repayment from abroad, this file proves the origin and the amount of your claim. Companies whose corporate bank account was hard to open, a frequent situation for foreign-owned SAS structures that had to fight for a deposit certificate (certificat de dépôt des fonds) and a Kbis extract, the company identity card issued by the court clerk’s office (greffe) through the INPI single portal (Guichet unique), often survive their first months exclusively on shareholder advances. That makes clean documentation even more important, because these early wires predate almost every other company record.

One final warning for this section: the current account works in one direction only here. You lend to your company. The reverse, the company lending to you as an individual officer or associate, is prohibited in most French companies, and we detail that ban below. Never confuse the two.

B. The Company-Law Gates Every Foreign Owner Must Clear Before Advancing Funds

French company law does not let money move between a company and its owners without procedure. Three gates matter for a foreign shareholder: the regulated-agreement procedure (conventions réglementées), the strict ban on the company lending to its own officers, and the fully-paid-capital condition that governs interest.

Start with the regulated agreements. Any agreement between the company and one of its officers, or a shareholder holding a significant stake, must be disclosed and approved by the shareholders, because the person on both sides of the table cannot be trusted to judge their own deal. In a SAS (société par actions simplifiée, the flexible joint-stock company most foreign founders choose), Article L. 227-10 of the Commercial Code requires the statutory auditor (commissaire aux comptes), or the president if none was appointed, to present a report on regulated agreements, defined as “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”, and the shareholders vote on that report. An agreement that is not approved still takes effect, but the interested person, and possibly the officers, must bear any harmful consequences for the company. In a SARL (société à responsabilité limitée, the limited-liability company with rigid rules), Article L. 223-19 of the Commercial Code sets the equivalent procedure, with one sharp difference: the interested manager or shareholder cannot vote, and their shares are ignored for quorum and majority. If your French company has a single shareholder, the procedure is lighter but not absent: the agreement is simply recorded in the register of decisions (registre des décisions). A foreign sole owner of a SASU or EURL who advances 100,000 euros and forgets that one-line entry creates a paperwork gap that a later buyer, auditor or judge will exploit.

In practice, this means your current-account agreement should be put in writing and submitted to the shareholder vote at the next annual meeting, even when you are the only shareholder and the vote is a formality. Attach the fund movements, the rate applied, and the interest computed for the year. Banks granting a loan to your French company routinely ask for the current-account statements and the approval trail; a missing regulated-agreement report reads as a governance failure and can slow or block financing.

The second gate is the absolute ban on borrowing from your own company. Article L. 225-43 of the Commercial Code provides that “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, ainsi que de faire cautionner ou avaliser par elle leurs engagements envers les tiers.” The same ban covers the general manager and extends to spouses, parents, children and intermediaries. For the SARL, Article L. 223-21 of the Commercial Code mirrors the prohibition for managers and individual shareholders. Note the asymmetry: a natural person running the company cannot take a loan from it, while a corporate shareholder, for example your foreign holding company that owns the French SAS, is not caught by this ban. Foreign groups therefore route intra-group funding through the parent company rather than through the individual director, and this single distinction explains why your lawyer asks whether the lender is you personally or your foreign company. Lend as shareholder and document it; never let the French company fund your personal expenses through a debit current account, because that contract is void and the liability consequences fall on you.

The third gate is the capital condition. Under Article 39, 1-3° of the General Tax Code, interest paid to shareholders is deductible only within strict limits: “Les intérêts servis aux associés à raison des sommes qu’ils laissent ou mettent à la disposition de la société, en sus de leur part du capital, quelle que soit la forme de la société, 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.” And: “Cette déduction est subordonnée à la condition que le capital ait été entièrement libéré.” Read that twice: if you formed your SAS with 10,000 euros of capital but only paid 5,000 euros into the bank, none of the interest on your current account is deductible until you release the balance. Foreign founders who choose a symbolic 1-euro or 1,000-euro capital and fund everything by current account should therefore release the full subscribed capital first; it costs little and unlocks the tax deduction on all later interest. The same article sets the maximum deductible rate by reference to the average annual rate banks charge companies on long variable-rate loans, a table the tax administration publishes and updates, currently visible on the BOFiP official commentary (BOI-RPPM-RCM-10-20-20-20). Any interest above that ceiling stays non-deductible for the company, even if your agreement provides for it.

Two extra checkpoints complete the picture for foreign lenders. First, if the lender is your foreign parent company rather than you personally, the deductibility of interest also passes through Article 212 of the General Tax Code, which caps deductible interest on sums left by a related or associated company at the Article 39 rate or, where higher, at a market rate proven by comparable borrowing: “Dans la limite de ceux calculés d’après le taux prévu au premier alinéa du 3° du 1 du même article 39 ou, s’ils sont supérieurs, d’après le taux que cette entreprise emprunteuse aurait pu obtenir d’établissements ou d’organismes financiers indépendants dans des conditions analogues”. Keep a comparable bank offer or document the market rate when the amounts are significant. Second, register where the company publishes its life events: shareholder advances themselves are not filed at the court clerk’s office, but the regulated-agreement report feeds the annual accounts filed through the INPI portal, and any blocking of your account in favour of a bank is recorded in the bank’s security file. A lender who keeps the wire proofs, the signed convention, the shareholder approval and the ledger in one file never has to reconstruct the story years later from abroad.

II. How a Foreign Owner Living Abroad Gets the Money Back, With Interest, Without a Tax Dispute

A. When You Can Demand Repayment From Abroad and How to Lock or Delay It Cleanly

The golden rule of the shareholder current account delights foreign founders: unless you agreed otherwise, you can demand your money back at any time, for any reason. The Court of Cassation confirmed it in a widely noted 2025 ruling concerning a shareholder who claimed both the price of her redeemed shares and her current-account balance. The Commercial Chamber recalled the governing principle: “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” (Cass. com., 12 February 2025, appeal No. 23-17.483, Bouras v. Financière L.). The court added that the obligation to pay the share-redemption price and the obligation to repay the current account are independent of each other. For a foreign owner, the message is concrete: your current account is repayable on simple demand, even if you are simultaneously negotiating an exit, a share buyback or a transformation of the company, and the company cannot tie the two payments together unless a clause says so.

Bookkeeping decides what your claim legally is, as a second 2025 ruling shows. A lender had assigned a 1,599,038-euro receivable against a French property company, and the parties fought over its true nature: shareholder current-account balance or receivable attached to a shareholding (créance rattachée à une participation)? The balance sheets pointed in opposite directions depending on who produced them, and the court of appeal held the claim was not a current-account debt but a shareholding-attached receivable, hence a loan of indefinite duration, with the limitation period running only from the formal demand of 15 January 2016. The Commercial Chamber approved that analysis in full: “De ces constatations et appréciations, la cour d’appel a exactement déduit que la créance de la société Loma à l’égard de la société Fleur’s Flat n’était pas une créance de compte courant mais une créance rattachée à une participation et donc un prêt à durée indéterminée, et que l’action en remboursement introduite par Mme [Z] [X] le 19 janvier 2016 n’était pas prescrite, le délai de prescription n’ayant commencé à courir qu’à compter de la mise en demeure délivrée le 15 janvier 2016” (Cass. com., 18 June 2025, appeal No. 24-14.829, Loma v. Fleur’s Flat). For a foreign owner, the practical lesson is double: book each advance under the right heading from day one, because re-labelling years later rarely survives a dispute, and always claim repayment by formal written demand, since that letter starts both default interest and the limitation clock. Three drafting lessons follow: date every convention explicitly, state whether it covers past advances or future ones only, and never assume that financial hardship alone blocks repayment — the official business portal confirms the company cannot refuse repayment even in difficulty. When trouble appears, convene the shareholders, document each movement, and take advice before moving money.

Because on-demand repayment can strangle a young company, French practice offers one clean brake: the blocking agreement (convention de blocage). The company and the shareholder agree in writing that the account stays frozen for a defined period or until a defined event, typically the full repayment of a bank loan. The official business portal describes the mechanism precisely: the decision is taken either unanimously at the shareholders’ meeting or in a blocking convention signed between the company and the shareholder, and it serves as security for bank lending (Service-Public Entreprendre, shareholder current account: operation and taxation). Banks financing a French subsidiary systematically require the foreign parent or founder to block their current account for the loan duration; without that freeze, the bank knows the shareholder could empty the company the day after disbursement. If you sign a blocking agreement, negotiate its boundaries: fixed term with an end date, release triggers such as a leverage ratio or a refinancing, and the interest regime during the freeze. An open-ended freeze with no exit is a trap, especially when you live abroad and cannot attend every meeting to negotiate the release.

What if the company simply cannot pay when you call the loan? French law draws a firm line. The same official portal states that when the shareholder claims repayment, the business cannot refuse repayment, even when it faces financial difficulties, nor can it unilaterally cap repayment to an instalment plan. The company’s only judicial shield is to ask the court for grace periods: under Article 1343-5 of the Civil Code, a judge may grant the debtor up to two years of deferred payment considering its situation and the creditor’s needs. In the Paris 2023 case above, the borrower requested exactly that fallback. Courts grant such delays sparingly, and they never erase the debt. For a foreign owner, the operational advice is therefore symmetrical: as lender, send a formal written demand (mise en demeure) by registered letter or bailiff’s writ (commissaire de justice, formerly huissier, the enforcement officer) before suing, because it starts default interest running and proves exigibility; as company officer facing a co-shareholder’s demand, do not invent a refusal, apply to the court quickly if cash is genuinely short, and convene the shareholders to approve emergency financing instead.

Limitation periods close this section. A current-account repayment claim is a personal action subject to the five-year commercial limitation, running from each demand for the sums then due. From abroad, calendar the deadlines in the company’s file, keep every demand and every partial repayment with its date, and remember that annual approval of the accounts acknowledging the balance can restart the clock. A claim left sleeping for years becomes a gift to the company; a claim monitored yearly stays enforceable.

B. The Tax Frame a Non-Resident Lender Must Respect: Deductible Interest, Withholding and Reclassification Risks

Interest taxation is where foreign lenders lose the most money, and where the rules are the most mechanical. Take them in order: deductibility for the French company, taxation of the interest in your hands as a non-resident, and the reclassification traps that turn interest into dividends.

Deductibility for the company follows Article 39, 1-3° of the General Tax Code, whose key rule is worth quoting in full: “Les intérêts servis aux associés à raison des sommes qu’ils laissent ou mettent à la disposition de la société, en sus de leur part du capital, quelle que soit la forme de la société, 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.” In practice, the tax administration publishes quarterly tables of this maximum rate, reproduced in the BOFiP commentary (BOI-RPPM-RCM-10-20-20-20), and your accountant applies the average over your financial year. Two consequences follow. First, draft your convention rate at or below the expected ceiling; a 7% contractual rate in a year when the ceiling averages 4.5% means the excess is permanently non-deductible and taxed as company profit. Second, remember the capital condition quoted earlier: “Cette déduction est subordonnée à la condition que le capital ait été entièrement libéré.” Release the subscribed capital before booking interest, and keep the deposit certificate and the Kbis showing the capital…

When the lender is a related foreign company, for instance your US LLC or UK Ltd that owns the French SAS, Article 212 of the General Tax Code adds its own ceiling: deductible interest is capped as follows: “Dans la limite de ceux calculés d’après le taux prévu au premier alinéa du 3° du 1 du même article 39 ou, s’ils sont supérieurs, d’après le taux que cette entreprise emprunteuse aurait pu obtenir d’établissements ou d’organismes financiers indépendants dans des conditions analogues”. Document that market rate with a bank term sheet or a transfer-pricing memo when the advances exceed a few hundred thousand euros, because the tax auditor will ask for it. The same logic extends to thin-capitalisation and hybrid rules for large groups, which exceed this guide but should trigger a specialist review above one million euros of intra-group debt.

Taxation in your hands depends on where you live. Interest paid by a French company to a non-resident individual or company generally suffers French withholding tax at source, with the rate and the procedure depending on the bilateral tax treaty between France and your country of residence and on EU directives for parent-subsidiary interest flows. The treaty typically reduces or allocates the taxing right, but the reduction is never automatic: you must provide a certificate of tax residence, and the French paying company must file the relevant withholding return. Many foreign founders discover this when their French accountant asks for a residence certificate months after the first interest payment. Anticipate it: confirm the treaty rate with your adviser before the first payment date, supply the certificate early, and align the interest payment calendar with the company’s withholding filings. Keep also in mind the French-side reporting: interest paid to individuals appears on the annual securities and interest return (IFU, imprimé fiscal unique), and the company must declare non-deductible excess interest separately.

Three reclassification traps then threaten the unwary. First, excessive interest above market levels can be recharacterised as a distribution: the excess is treated as a dividend, with dividend withholding and no deduction. Second, a current account that never moves, bears no interest and is never claimed can be re-read by an auditor or a court as a disguised capital contribution or, in distress, as grounds to hold the shareholder liable for supporting an artificial credit. Third, abandoning your current account to rescue the company, a common gesture when the French subsidiary breaches the half-capital threshold (perte de la moitié du capital social) and must decide between dissolution and recapitalisation, follows its own tax regime: a waiver granted for commercial reasons is deductible under conditions, while a purely financial waiver is generally not, and part of the waived sum may return to taxable profit if the company recovers. Never abandon a current account by a simple email; have the shareholders vote the waiver, state its commercial motive in the minutes, and book it on advice.

Close with the foreign-exchange and proof checklist that keeps the whole structure audit-proof from abroad. Keep the SWIFT messages of every advance and every repayment, the euro conversions applied, the signed convention with its rate and term, the annual regulated-agreement report approving the account, the ledger extracts, the residence certificates and the withholding returns. When the amounts are lent by your foreign holding company, add the intercompany loan agreement, the market-rate evidence for Article 212, and the transfer-pricing documentation if the group exceeds the thresholds. A French tax audit typically opens three years back; a file that answers every question on day one shortens the procedure dramatically and often avoids penalties. Fund fast through the current account, but fund like someone who expects to be audited, because one day you will be.

Conclusion

The shareholder current account is the foreign founder’s best friend in France: faster than a capital increase, repayable on demand unless you validly froze it, and interest-bearing within the tax ceilings. Its safety rests on four reflexes. Put every advance in writing with a rate at or below the deductible ceiling. Submit the agreement to the shareholder vote each year and record sole-shareholder decisions in the register. Release the subscribed capital in full before deducting interest. And when you lend from abroad or through a foreign parent, keep the wire proofs, the residence certificates and the market-rate evidence in one file. With those reflexes, your own money works for your French company without becoming hostage to it, and your return home, repayment plus lawful interest, survives both a co-shareholder dispute and a tax audit. When the amounts grow or a bank asks you to block the account, have the convention reviewed before signature: a single clause decides whether your 50,000 euros come home on demand or wait five years.

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