You wired 40,000 euros from London, New York or Dubai to your French company last year so it could pay the deposit on the office, cover the first payroll or survive a slow quarter. The money sits in the accounts under a familiar label, the compte courant d’associé, the shareholder current account, and your French accountant calls it a loan you can take back whenever you want. Then two things happen at once. You ask for the money back and the company, or the co-shareholder who runs it day to day, tells you the funds are frozen. And your accountant warns you that the 5 percent interest you planned to charge will be partly thrown out by the tax office. Both warnings can be true at the same time, and both have precise legal answers. This guide is written for the foreign shareholder who has already lent money to a French company and now wants three things: recover the funds from abroad, charge interest the tax administration will accept, and come out of a tax audit without a reassessment. It explains the repayment rule that protects you, the written freeze that can lawfully delay you, the ceiling that caps deductible interest, and the file you must keep so an advance is never reclassified as a hidden dividend. Each key point is tied to the exact statute or court decision that creates it, with the official text quoted, so you can act on it from another country with a complete file.

I. How to get your shareholder loan repaid from abroad: the anytime rule and the written freeze

A. How to demand repayment of your compte courant at any time, even from abroad

A shareholder current account is not a gift, a contribution to capital or a favour to the company. Under French law it is a loan, and more precisely a prêt de consommation, the consumption loan defined by the Civil Code. Article 1892 of the Civil Code provides: 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 is the classic consumable thing in this sense: the company spends it and must return the same amount. Because no statute fixes a term for this advance, courts treat it as a loan of indefinite duration, and that classification carries a powerful consequence for you as the lender. In a decision of 12 February 2025, appeal number 23-17.483, published in the Bulletin, the commercial chamber of the Court of Cassation held: 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. In plain English, unless you agreed otherwise, you as a shareholder can demand repayment of your current account balance at any time, whatever your reason, because the advance is a loan with no fixed term. The Court added that this right is independent of other obligations between you and the company: in that case the company owed the price of redeemed shares and the shareholder was owed his current account balance, and the failure to repay the account could not be used to undo the share redemption. Your repayment right stands on its own feet.

The practical lesson is that no one in France needs to authorise your demand. Neither a shareholder vote, nor the signature of the manager, nor your physical presence at the registered office is required to trigger repayment. The official business guidance published by the French administration confirms the strength of this position: when the shareholder claims reimbursement of his current account, the business cannot refuse it, even by invoking financial difficulties, and it cannot unilaterally limit repayment to the amount it finds convenient. That guidance page, the English version of the service-public.fr fact sheet on the shareholder current account, is worth reading before you write your demand letter: Current account of partner: operation and taxation. A refusal based on cash-flow problems is therefore not a legal argument, it is the start of a dispute you can win, provided your paperwork is in order.

From abroad, the procedure is straightforward but must be documented. Send a written demand for repayment of the exact balance shown in the company accounts, by email with acknowledgment of receipt and, in parallel, by registered letter with acknowledgment of receipt to the siège social, the registered office of the company. State the amount, the account in which the advance is recorded, a payment deadline, and the bank details for the refund transfer abroad. Keep the transfer slips that prove you originally funded the account from your foreign bank account, because the company or a co-shareholder in a dispute will sometimes claim the money was a gift or an undisclosed capital contribution. If the company does not pay by the deadline, French law gives you a fast recovery route that works even when you live outside France. Article 1405 of the Code of Civil Procedure provides: Le recouvrement d’une créance peut être demandé suivant la procédure d’injonction de payer lorsque : 1° La créance a une cause contractuelle ou résulte d’une obligation de caractère statutaire et s’élève à un montant déterminé. A shareholder advance with a determined balance is exactly that kind of claim, so your French lawyer can file a payment-order petition, a requête en injonction de payer, before the competent court, obtain an order without an initial hearing, and have it served on the company, which then has one month to object or pay. You do not need to fly to France for this step; a lawyer with a power of attorney handles the filing and the service.

Two time limits frame your action. First, your claim is subject to the ordinary five-year limitation for personal actions. Article 2224 of the Civil Code provides: 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. Each time the company acknowledges the debt, for example by recording your balance in the approved annual accounts or by paying you interest, the clock restarts, so check the most recent bilan, the balance sheet, for your name and balance. Second, if the company is sliding toward insolvency, move fast: once a collective insolvency proceeding opens, individual enforcement is frozen and your advance ranks with ordinary unsecured claims. A demand sent while the company can still pay is worth far more than the same demand sent after the filing. If you are setting up the structure now rather than recovering money, the companion pillar guide to doing business in France walks through the full formation sequence from abroad: Setting Up a Company in France as a Foreign Founder: Bank Account, Kbis, VAT and Your First Hire. The Kbis, the official company identity certificate issued by the greffe, the registry office of the commercial court, through the INPI one-stop shop, the Guichet unique, is the document your bank will ask for before it releases or receives any shareholder funds.

B. When the company can lawfully make you wait: the written blocking agreement

The anytime rule has one lawful exception, and it is the trap most foreign shareholders discover too late: the convention de blocage, the written blocking agreement. When you signed the advance agreement, the shareholder loan contract, or a side letter demanded by the bank that financed the company, you may have accepted that your account would be frozen, bloqué, for a fixed period, often one to five years, or until a bank loan is repaid. The official guidance describes this mechanism exactly: the freeze is decided either by unanimous vote of the shareholders or by a blocking contract signed between the company and the shareholder, and it commonly serves as a warranty given to a bank lending to the business, as explained on the service-public.fr page on the shareholder current account. During the freeze, a repayment demand can be lawfully refused, not because the company is short of cash, but because you contractually gave up the right to ask. The Court of Cassation formula quoted above starts with the words that matter most, sauf stipulation contraire, unless otherwise agreed, and the blocking agreement is precisely the stipulation contraire that reverses the default rule.

For the freeze to bind you, it must be real, written and accepted. An oral understanding, a vague email from the manager, or a clause buried in minutes you never signed will not survive a serious challenge. Check three documents today: the convention d’avance en compte courant itself, the bank loan agreement and any subordination letter you countersigned, and the minutes of the shareholder meeting that approved the freeze. A valid freeze states its duration or its end event, for example full repayment of the bank facility, the exact accounts concerned, whether interest continues to accrue during the freeze, and what happens at the end, automatic release or a new vote. If any of these elements is missing, your lawyer can argue the freeze is unenforceable or has expired, and demand immediate repayment under the default rule. Conversely, if the freeze is airtight, do not waste money on a demand letter that invites a refusal; negotiate instead. Banks regularly accept a partial release against new guarantees, a conversion of part of the frozen account into capital, or a staggered release calendar, because a shareholder who feels trapped is a risk to the company they are financing.

Distance makes this negotiation harder but also more formal, which helps you. Ask the manager to send the full text of the alleged freeze, the bank’s written position on any release, and the latest annual accounts showing your balance and any mention of the freeze in the annexes. If the manager refuses to produce the documents, that refusal itself is evidence: a company that cannot show the contract that supposedly freezes your money will struggle to defend that freeze before a judge. Where several shareholders hold frozen accounts, verify that the freeze applies equally to all of them. A freeze that blocks only the foreign shareholder while the local manager’s own account stays freely repayable looks like unequal treatment and can support a claim for abuse, depending on the facts. Finally, remember that the freeze suspends repayment, not the existence of the debt. Interest agreed in the contract keeps running unless the freeze says otherwise, the balance stays on the books as a company liability, and at the end of the freeze the anytime rule revives in full. Calendar the end date now and send your demand the week it expires, because companies that relied on frozen shareholder money for years rarely volunteer to release it.

II. How interest and tax decide what your loan really earns: caps, deductions and audit defence

A. How much interest you can charge: the legal rate, the written rate and the tax ceiling

Interest on a shareholder loan is never automatic in France. If no rate was agreed in writing, the advance is presumed interest-free and you cannot claim interest after the fact. Article 1907 of the Civil Code provides: L’intérêt est légal ou conventionnel. L’intérêt légal est fixé par la loi. L’intérêt conventionnel peut excéder celui de la loi, toutes les fois que la loi ne le prohibe pas. Le taux de l’intérêt conventionnel doit être fixé par écrit. The last sentence is the one that decides cases: the agreed rate must be set in writing. A verbal promise of 5 percent, a rate mentioned only in a presentation slide, or interest the accountant books without a contractual basis will be struck out in a dispute or an audit. If you are already in that situation, fix it now with a written amendment signed by the company and yourself, stating the rate, the base, the calculation dates and the payment terms. The amendment cannot rewrite the past, but it stops the bleeding for the future, and it converts an undocumented hope into an enforceable contractual right.

Even with a written rate, tax law caps what the company can deduct. The company pays corporate income tax, the impôt sur les sociétés, on its profit after charges, and interest on your advance is one of those charges, but only within a ceiling. Article 39, paragraph 1-3 of the General Tax Code, the Code général des impôts, CGI, provides: 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 deductible interest equals the interest computed at a rate matching the yearly average of the average effective rates charged by banks on variable-rate business loans longer than two years. The tax administration publishes this maximum rate quarterly in its official bulletin, the BOFIP, under the reference BOI-BIC-CHG-50-50-30, available at BOI-BIC-CHG-50-50-30 on bofip.impots.gouv.fr, and your accountant must check the rate for each quarter, not once a year. Two further conditions apply. First, the deduction is allowed only if the share capital has been fully paid up, entièrement libéré, so a company whose capital was never fully released cannot deduct a single euro of shareholder-account interest. Second, any interest above the ceiling is not lost for you as the recipient, it is reclassified: the excess is treated as a distribution to you, taxed as a dividend in your hands, while remaining non-deductible for the company, the worst of both worlds.

Where the lender is not you personally but your foreign parent company, a second ceiling applies on top of the first. Article 212, paragraph I of the General Tax Code provides: 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 the limit of interest computed at the article 39 rate or, if higher, at the rate the borrowing company could have obtained from independent banks in similar conditions. A French subsidiary financed entirely by intra-group debt from its Dubai, London or Delaware parent must therefore be ready to prove, with bank term sheets or comparable offers, that an independent lender would have lent at the same rate. Groups that set the intra-group rate at 8 or 10 percent without any market comparison routinely lose the deduction and collect transfer-pricing adjustments on top. The safe method is to set the rate at or below the published quarterly maximum, document the capital release, and, for parent-company loans, keep one page of market evidence in the file. Interest is then deductible for the company and taxable for you under the normal rules of your country of residence, subject to the applicable tax treaty, instead of becoming a double penalty.

B. How to survive a tax audit: requalified advances, debit balances and the file that protects you

The most expensive audit outcome is not the loss of an interest deduction but the reclassification of your advance as a disguised profit distribution. The mechanism sits in the distributed-income rules of the tax code. Article 111, paragraph a of the General Tax Code provides: Sont notamment considérés comme revenus distribués : a. Sauf preuve contraire, les sommes mises à la disposition des associés directement ou par personnes ou sociétés interposées à titre d’avances, de prêts ou d’acomptes. The presumption works against you: any sum made available to a shareholder as an advance, loan or down payment is deemed distributed income unless you prove otherwise. And the parent provision confirms the scope: Article 109, paragraph 1-2 of the General Tax Code treats as distributed Toutes les sommes ou valeurs mises à la disposition des associés, actionnaires ou porteurs de parts et non prélevées sur les bénéfices, all sums or assets made available to shareholders and not taken from profits. In an audit, the inspector who finds undocumented transfers from the company to you or your relatives, round-tripping between your account and the company’s cash, or an advance with no repayment schedule, will simply apply the presumption. The consequence is brutal: income tax on deemed dividends in your hands, plus withholding tax if you live abroad, plus late-payment interest and penalties, while the company loses the deduction. The only defence is the file described below, produced before the auditor writes the adjustment proposal.

The mirror situation, money flowing from the company to you beyond what you lent, is not just a tax problem but a nullity. Company law prohibits managers and individual shareholders from borrowing from their own company or running a debit current account, meaning an account where you owe the company money. For public limited companies, Article L.225-43 of the Commercial Code provides: 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. For limited liability companies the equivalent ban reads identically in substance: Article L.223-21 of the Commercial Code provides: 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. The contract is void, the sums must be returned, and in a SARL or SAS run by an individual manager the tax office will combine the nullity with the article 111 presumption above. Note the exception built into both texts: legal entities, personnes morales, are outside the ban, so a loan from the French company to its foreign parent company is not automatically void under these articles, though it must still survive the transfer-pricing, thin-capitalisation and regulated-agreement controls. Never let your personal account go into debit, even for a week, even by accident, and reconcile the account before each year-end: a credit balance for you is a loan to the company, a debit balance in your name is a prohibited loan from the company.

Your advance is also a regulated agreement, a convention réglementée, which means it must be disclosed and approved, not hidden in the accounting software. In a SARL, Article L.223-19 of the Commercial Code requires a report on agreements between the company and its managers or shareholders: Le gérant ou, s’il en existe un, le commissaire aux comptes, présente à l’assemblée ou joint aux documents communiqués aux associés en cas de consultation écrite, un rapport sur les conventions intervenues directement ou par personnes interposées entre la société et l’un de ses gérants ou associés, and the meeting votes on that report with the interested person excluded from the vote. In a SAS, the contract of a SAS with simplified joint-stock form, Article L.227-10 of the Commercial Code entrusts the report to the statutory auditor or, where none was appointed, to the president of the company: 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. The courts enforce this disclosure strictly. On 11 March 2003, appeal number 01-01.290, the commercial chamber quashed a decision that had treated a one-off agreement with a director as an ordinary transaction, holding: sauf si elle porte sur des opérations courantes et conclues à des conditions normales, toute convention intervenue entre une société anonyme et l’un de ses administrateurs doit être soumise à autorisation préalable du conseil d’administration. A shareholder loan at a bespoke rate is not a routine transaction concluded at normal conditions, so it belongs in the regulated-agreement report of every company form, and its absence from the report is the first thing an auditor or an opposing shareholder will notice.

Build the audit-proof file now, before any control begins, because every missing document becomes a presumption against you. The file contains the signed advance agreement with the amount, the written interest rate or the explicit statement that the advance is interest-free, the term or the statement that it is repayable on demand, and any blocking clause with its duration. It contains the bank transfer slips in both directions, each labelled with the account and the date, the shareholder-meeting minutes approving the agreement under the regulated-agreement procedure, the BOFIP quarterly maximum rate for each year with your computation of deductible versus reclassified interest, proof that the capital is fully paid, and, for parent-company funding, the market evidence supporting the rate. With this file, an advance stays an advance: repayable at any time under the 2025 case law, bearing deductible interest within the article 39 ceiling, and approved as a regulated agreement. Without it, the same money becomes, at the auditor’s choice, a frozen balance you cannot recover, non-deductible interest, or a deemed dividend taxed in France while you live abroad.

Conclusion

A shareholder loan to your French company is the most flexible funding tool available to a foreign founder, and also the most misused. The default rule works in your favour: the advance is a loan of indefinite duration that you can reclaim at any time unless a written freeze says otherwise, and the Court of Cassation confirmed that right in plain terms in February 2025. The freeze, where it exists, must be written, time-limited and accepted; anything vaguer is negotiable, and anything airtight must be calendared so your demand lands the week it expires. Interest must be written to exist at all, and it is deductible only within the quarterly-published ceiling and only if the capital is fully paid, with an extra market-rate test for parent-company loans. Above all, document everything as a regulated agreement, keep your personal balance in credit, and hold the transfer slips, because undocumented money is presumed distributed under article 111 and taxed as such. Run these five checks this week: read your advance agreement for a freeze, confirm the written rate, compute the ceiling for each open year, verify the capital release, and reconcile the balance with the latest accounts. If any check fails, fix the paper before the auditor or the co-shareholder finds the gap, because in French company law the shareholder who writes things down gets repaid, and the shareholder who trusted a handshake gets reassessed.

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Telephone consultation: 80 EUR including VAT, within 48 hours, with a lawyer of the firm. Call 06 46 60 58 22 or write via our contact page. We review shareholder loan agreements, blocking clauses, interest computations and audit replies for foreign founders with companies in France.