You live in London, New York, Dubai or Singapore and your French company needs cash quickly. The share capital is already paid up, the Kbis (the official company identity certificate issued by the greffe, the registry of the commercial court) is in hand, and the business must pay a supplier, a first salary or a Paris office deposit next week. Raising the share capital again means a notary or a lawyer, a new bank certificate, a publication in a legal announcements journal, a filing with the guichet unique (the single online company registration portal) and several weeks of waiting. A bank loan means guarantees, personal security and a credit committee that does not know you. There is a third route that almost every French group uses every day: you wire money from your own account or from your foreign parent company to the French company and record it as a shareholder loan, called in French a compte courant d’associé, literally a shareholder current account. It is fast, flexible and cheap, but it obeys strict French rules on paper trails, interest rates, repayment rights, regulated agreements and tax. This guide explains, for a foreign founder or foreign parent company, how to set up that loan from abroad, how to draft the paperwork that proves it, when you can take the money back, how much interest the French company can deduct, what tax the lender pays, and which mistakes turn a friendly cash advance into hidden profit distribution, a gift to the tax office or even a criminal file.

I. How to Lend Money to Your Own French Company From Abroad and Take It Back Safely

A. How Does a Shareholder Current Account Work for a Foreign Founder and Which Documents Prove the Loan?

A compte courant d’associé is not a bank account. It is a bookkeeping account in the French company’s balance sheet that records every euro a shareholder lends to the company, plus interest, minus repayments. Under French civil law, 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. Your wire transfer is that delivery, and the company’s obligation to return the same amount is the other side of the contract. No notarial deed is required, no capital increase, no publication in the BODACC (Bulletin officiel des annonces civiles et commerciales, the official gazette where company creations and insolvency notices appear). That speed is exactly why foreign founders love the tool, and exactly why the French tax administration looks at it so closely when the lender lives abroad.

French banking law starts with a blunt prohibition. Il est interdit à toute personne autre qu’un établissement de crédit ou une société de financement d’effectuer des opérations de crédit à titre habituel. You, as a foreign individual or foreign company, are not a bank, so you cannot lend money in France as a business. Shareholder loans escape this monopoly only because they remain occasional advances linked to your position as a shareholder, not a lending activity offered to the public. The practical line is simple: lend only to a company in which you hold shares, document the shareholder link, keep the loan occasional and tied to the company’s cash needs, and never lend to strangers for profit. If you are the foreign parent company of the French subsidiary, the statute gives you an even clearer shelter: Les interdictions définies à l’article L. 511-5 ne font pas obstacle à ce qu’une entreprise, quelle que soit sa nature, puisse : […] Procéder à des opérations de trésorerie avec des sociétés ayant avec elle, directement ou indirectement, des liens de capital conférant à l’une des entreprises liées un pouvoir de contrôle effectif sur les autres. A cash pooling agreement or an intra-group treasury agreement between your foreign holding company and the French subsidiary therefore sits on solid statutory ground, provided real control exists and the terms are written down.

Before choosing this tool, read the broader map of French company vehicles for foreign investors set out in our pillar guide on choosing between a SAS, a SARL, a branch office and a subsidiary when investing in France from abroad, because the loan regime interacts with the vehicle. In a SAS (société par actions simplifiée, the flexible joint-stock company most foreign founders pick), the articles of association can freely organise shareholder advances. In a SARL (société à responsabilité limitée, the limited liability company with intuitu personae shares), transfers and withdrawals follow stricter collective rules. In a succursale (a French branch of a foreign company, which has no separate legal personality), there is no share capital and no compte courant d’associé at all: money sent from head office is an internal allocation, not a loan, and the whole analysis below does not apply. Confirm first that your French entity is a real subsidiary with its own Kbis, its own SIREN number (the nine-digit company identifier issued by INSEE, the national statistics institute) and its own bank account.

The most common trap for founders living abroad is informality. A wire labelled advance with no agreement, no interest clause and no entry approved in the company books looks, to a French auditor, like either a hidden capital contribution or a disguised distribution. Build the paper trail before you wire, not after the URSSAF (Unions de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the agency that collects French social security contributions) or the tax office asks questions. At a minimum, prepare a signed loan agreement or current-account agreement stating the lender, the borrower, the amount, the currency and exchange-rate rule, the interest rate or the expressly interest-free character, the term or the on-demand nature, the repayment mechanics, the governing law and the competent court. Have both sides sign it, even if you sign on both sides as shareholder and as president (président, the legal representative of a SAS) or gérant (the manager of a SARL): the document still proves the meeting of minds. Keep the SWIFT confirmation, the bank statements on both ends showing the same amount on the same date, and the bookkeeping entries in the French company’s accounts under account 455 for individual shareholders or 451 for group companies under the French chart of accounts. If the loan exceeds the modest thresholds your accountant applies, ask for a statutory auditor or at least an independent accountant letter confirming the entry.

Foreign founders should also organise signing from abroad properly. A PDF signed with a qualified electronic signature is valid in France, and a scanned wet signature exchanged by email is routinely accepted for a current-account agreement between consenting parties. What matters is proof of consent and date: keep the email chain, the time-stamped signature certificate and one original or certified copy in the company’s registered office files in France. If your Paris accountant or your domiciliation agent (the licensed provider that gives your company its registered address) holds the corporate books, send the agreement the same week as the wire so the entry is recorded in the right financial year. Companies whose registered office sits in Paris file their annual accounts with the greffe du tribunal de commerce de Paris, and that greffe checks consistency between the balance sheet, the shareholders’ meeting minutes and the tax return. A loan that appears in the bank statements but nowhere in the minutes or the notes to the accounts invites a request for clarification.

Finally, record the loan in the company’s corporate life. In a SARL, advances by shareholders are regulated agreements that must go through the yearly procedure described below. In a SAS with several shareholders, present the agreement to the shareholders even when the articles do not expressly require it, and file the signed copy with the meeting records. In a single-shareholder SASU (société par actions simplifiée unipersonnelle) or EURL (entreprise unipersonnelle à responsabilité limitée), enter the agreement in the decision register (registre des décisions) kept at the registered office. This single habit defeats most later disputes: heirs, co-founders, incoming investors, banks and tax inspectors all ask the same first question, which is where the signed agreement is.

B. When Can You Demand Your Money Back and How Do You Lock It In Without Destroying the Company?

The central feature of a French shareholder current account, and the one foreign lenders most often misunderstand, is that the money is repayable on demand unless you agreed otherwise. The Cour de cassation (the French supreme court for civil and criminal matters) states the rule in these exact terms: les dispositions de l’article 1900 du code civil, qui offrent au juge la possibilité de fixer un terme pour la restitution d’un prêt, ne sont pas applicables au compte courant d’associé, dont la caractéristique essentielle, en l’absence de convention particulière ou statutaire le régissant, est d’être remboursable à tout moment. That decision, Commercial Chamber, 10 May 2011, appeal number 10-18.749, rejected a company argument that the trial judges should have granted it extra time by fixing a term for repayment once they had found no blocking agreement. The Court confirmed the opposite: without a specific blocking agreement or a statutory clause, the shareholder gets the money back when the shareholder asks. The Court confirmed the same principle again on 12 February 2025, appeal number 23-17.483: Si, sauf stipulation contraire, tout associé est 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 constitue un prêt à durée indéterminée. Motives do not matter, urgency does not matter, the company’s embarrassment does not matter. Only a valid contrary stipulation matters.

For a founder living abroad, this on-demand right cuts both ways. On the creditor side, it is precious: if the French venture stalls, you can call the loan and recover your cash ahead of any dividend, because dividends require profits, a shareholders’ vote and a full annual cycle, while a current account requires only a written demand. On the company side, it is dangerous: a sudden demand for several hundred thousand euros can push a healthy young company into cessation des paiements (the legal state of being unable to pay debts due with available assets, the trigger for insolvency proceedings) and expose the president or gérant to a claim for late filing. Professional lenders therefore always pair the advance with a blocking agreement, called a convention de blocage, under which the shareholder promises not to demand repayment for a fixed period or until a defined event such as a bank financing, a fundraising or the approval of the next annual accounts. Banks routinely require such a blocking letter before granting a loan to a French SME, because they want the shareholder money to behave like quasi-equity while the bank credit is outstanding.

A blocking agreement is enforceable only if it is real, precise and accepted. It must state the blocked amount, the start date, the end date or the lifting event, the interest treatment during the blocking period, and whether early repayment with unanimous consent remains possible. A board minute that vaguely notes that shareholders agree to leave their money in the company, without a signature from the lending shareholder, does not block anything: the 2011 case above rejected exactly that kind of informal board statement. Unanimity matters, because no shareholder can be forced to increase his commitments without his consent, and a court will not infer a waiver of the fundamental right to immediate repayment from silence or from attendance at a meeting. If you are both the lender and the sole shareholder, sign the blocking agreement expressly in your capacity as lender as well as in your corporate capacity, and have the shareholders’ meeting acknowledge it. If there are several shareholders, each lender signs his own blocking letter, and the minutes record each commitment individually.

Mind the mirror trap on the way back. French company law strictly forbids the reverse flow: the company lending to its own managers or individual shareholders. In a SARL, 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 same prohibition hits directors of a société anonyme: 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. In plain English, money must flow from the shareholder to the company, never from the company to the individual shareholder as a personal loan, and a debit current account (a negative balance showing the shareholder owes the company) held by an individual is void and can feed an abus de biens sociaux case (misuse of corporate assets, a criminal offence). Only loans to or from legal entities, such as your foreign parent company, escape this nullity, and even then the agreement must follow the regulated-agreements procedure. Foreign founders who use the French company card for personal expenses and let the accountant park the amounts in a debit current account are therefore building a null contract on top of a criminal risk. Repay any debit balance immediately, document the repayment, and route future personal spending outside the company.

From abroad, organise repayment demands with the same discipline as the original wire. Send a dated written demand by email with acknowledgment of receipt and by registered letter with acknowledgment of receipt to the registered office, state the account, the amount, the bank details for repayment and a reasonable deadline such as fifteen or thirty days, and keep proof of sending and receipt. If the company cannot pay at once, negotiate a written repayment schedule rather than seizing the account informally, because disorderly transfers out of a struggling company look like preferential payments once insolvency proceedings open. If the company refuses without a valid blocking agreement, a mise en demeure (formal demand letter) followed by a court claim for payment before the commercial court of the registered office usually unlocks the situation, and French judges order repayment quickly when the ledger shows a credit balance and no blocking clause. For Paris-registered companies, that court is the tribunal de commerce de Paris, and the greffe of that court can supply certified copies of the filed accounts that prove the balance.

II. What Interest Can You Charge From Abroad, What Tax Hits the Loan, and Which Errors Turn Cash Into a Dividend?

A. How Much Interest Can Your French Company Deduct and How Is Your Interest Taxed as a Foreign Lender?

Interest on a shareholder loan is optional in France: the agreement can provide for interest at a fixed rate, a variable rate, or expressly state that the advance is interest-free. An interest-free loan from a shareholder is perfectly lawful, and many founders start that way for simplicity. But the tax consequences diverge sharply, so choose the rate deliberately and write it into the agreement before the first euro lands. As a practical guide, the official service-public.fr business portal summarises the functioning and taxation of shareholder current accounts on its dedicated page for Compte courant d’associé: fonctionnement et fiscalité, which your accountant in Paris will use as a checklist alongside the statutes and the case law below.

On the French company side, interest paid to a related-party lender is deductible only within a legal ceiling. The relevant article provides that Les intérêts afférents aux sommes laissées ou mises à disposition d’une entreprise par une entreprise qui est son associée ou par une entreprise liée, directement ou indirectement, au sens du 12 de l’article 39, sont déductibles : 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. In practice, the deductible rate is capped at the average rate for floating-rate bank loans to French companies, published quarterly by the tax administration, unless the company proves it could have borrowed the same amount from an independent bank at a higher rate in similar conditions. That proof is hard for a young subsidiary with no credit history, so most foreign groups simply apply the published maximum rate and keep the official table in the tax file. Interest above the ceiling is permanently non-deductible for corporate income tax (IS, impôt sur les sociétés) purposes, and since the 2019 finance law a second general cap under the European anti-avoidance rules further limits net financial expenses above three million euros to thirty percent of adjusted EBITDA. Excess interest must be tracked year by year, because only part of it can be carried forward.

Thin capitalisation adds a second ceiling when the French company is heavily funded by debt from its own group. If the average related-party debt exceeds one and a half times the company’s equity and the related-party interest exceeds certain thresholds, additional fractions of interest become non-deductible in the current year. Foreign founders who fund a French SASU entirely with a multi-million euro parent loan and one euro of capital, then charge a high interest rate to strip profits out of France, hit both ceilings at once and create a documented abnormal management act that the tax office loves to reassess. Capitalise the company seriously on day one, keep the debt-to-equity ratio reasonable, apply a market interest rate supported by a comparability note or a bank offer, and have the board minutes explain the business reason for debt rather than equity, such as speed, reversibility or regulatory capital requirements in the lender’s home country.

On the lender side, French domestic law treats the interest as income from movable capital. The statute states that Sont considérés comme revenus au sens du présent article, lorsqu’ils ne figurent pas dans les recettes provenant de l’exercice d’une profession industrielle, commerciale, artisanale ou agricole, ou d’une exploitation minière, les intérêts, arrérages, primes de remboursement et tous autres produits : […] Des comptes courants. If you are a French tax resident individual, that interest joins your income tax return with a flat-rate withholding as an advance. If you live abroad, France generally levies a withholding tax on interest paid by a French company to a non-resident lender, subject to reduction or elimination under the applicable double tax treaty and European directives for parent-subsidiary interest flows. The treaty network is generous but formalistic: to obtain the reduced rate, the foreign lender must deliver a tax residence certificate, prove beneficial ownership of the interest, and file the correct claim form before or shortly after payment. A foreign parent that simply receives gross interest with no certificate and no treaty analysis will either suffer over-withholding that is painful to reclaim or, worse, be accused of receiving a disguised distribution taxed as a dividend at a higher rate.

Dividends and interest follow different withholding regimes, different reporting forms and different treaty articles, so never relabel one as the other. Interest must be paid under the loan agreement on its contractual dates, recorded as financial expense, declared on the interest reporting forms and supported by the bank transfer references. Dividends require distributable profits, a shareholders’ resolution allocating them, a dividend tax return and a different withholding rate. When a tax inspector finds regular monthly payments labelled management fees or interest with no agreement, no market rate and no deduction cap computation, the reassessment routinely reclassifies the whole flow as a distribution, denies the corporate deduction, applies dividend withholding with penalties and late interest, and notifies the lender’s home country under exchange-of-information treaties. The cheapest protection is boring paperwork: one agreement, one rate memo, one annual computation of the deductible fraction, one set of declarations filed on time.

Foreign individual lenders face one more French reporting layer. If you are tax resident in France for part of the year, for instance because you moved to Paris to run the company while keeping a foreign domicile, interest received on your French current account must be declared in France even if it was paid to a foreign bank account, and the paying company must apply the correct French withholding as paying agent. If you are fully non-resident, keep evidence of your foreign tax residence, the treaty article you rely on, and the foreign tax return where you declared the interest, because the French inspector will ask for all three. Exchange of bank information under the common reporting standard means the inspector often already holds the foreign bank statements before the meeting starts.

B. Which Corporate Approvals, Tax Reclassifications and Criminal Risks Must You Neutralise When the Lender Lives Abroad?

Shareholder loans are regulated agreements, not private side letters, and French company law punishes founders who skip the approval procedure. In a SARL, the statute requires that 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. The interested shareholder does not vote, his shares are excluded from quorum and majority, and the meeting minutes record the approval or disapproval. A disapproved agreement still produces its effects, but the interested party bears any harmful consequences for the company. In a SAS, the parallel rule provides that Le commissaire aux comptes ou, s’il n’en a pas été désigné, le président de la société présente aux associés un rapport sur les conventions intervenues directement ou par personne interposée entre la société et son président, l’un de ses dirigeants, l’un de ses actionnaires disposant d’une fraction des droits de vote supérieure à 10 % ou, s’il s’agit d’une société actionnaire, la société la contrôlant au sens de l’article L. 233-3. In a single-shareholder SASU or EURL, the agreement is simply entered in the decision register, but it must still be written and filed. Foreign founders who sign both sides and see no point in reporting to themselves miss the purpose: the report protects the company against the founder, informs future shareholders, and proves to the tax office that the loan was handled at arm’s length.

The tax reclassification risk is the most expensive one, and cross-border loans attract it automatically. French tax law provides that Sont considérés comme revenus distribués : Toutes les sommes ou valeurs mises à la disposition des associés, actionnaires ou porteurs de parts et non prélevées sur les bénéfices. Unexplained credits to a shareholder current account are therefore presumed to be distributions, not loans. The First Civil Chamber of the Cour de cassation confirmed the mechanism on 9 September 2020, appeal number 19-16.047, in a case where the administration had found that les sommes de 127 013,29 euros et 126 866,71 euros inscrites en 2008 au crédit de son compte courant devaient être regardées comme des revenus distribués. The Court recalled the governing presumption, constant in administrative case law, that il résulte de l’article 109 du code général des impôts que les sommes inscrites au crédit d’un compte courant d’associé ont, sauf preuve contraire apportée par l’associé titulaire du compte, le caractère de revenus distribués. The burden then flips to the shareholder to prove, by any means, that the credit corresponds to a genuine loan, a documented transfer of an existing claim, or another real debt of the company. In that 2020 case the shareholder blamed his lawyer for not producing the assignment and delegation deeds before the administrative courts, which shows how decisive the paper trail is: the deeds existed, but because they were produced late and without proper accounting entries, the distribution stood and only a malpractice claim remained.

For a foreign lender, three fact patterns trigger this presumption most often. The first is the round-trip: you wire money in, the company wires a similar amount back to you or to a company you control within days, with no agreement and vague labels. The inspector reads a disguised dividend or a hidden sale price supplement. The second is the dormant credit: a large balance sits in your current account for years, bears no interest, is never called, and is never blocked in writing. The inspector reads a waiver of a claim, which is a gift to the company taxable in your hands as a distribution followed by a contribution, or an abnormal act if the lender is the parent. The third is the overfunded startup: the French subsidiary has minimal capital, permanent operating losses, and a parent current account growing every quarter with interest capitalised but never paid. The inspector reads equity in disguise, denies the interest deduction, reclassifies the interest as dividends, and applies withholding. Each pattern is defeated by the same disciplines: a signed agreement before funding, a real interest clause or an explicit interest-free term with a business reason, annual statements of the account sent to the lender and acknowledged, interest actually paid or formally capitalised by amendment, and accounts that reconcile to the tax return to the euro.

Criminal exposure exists at the edges and foreign managers underestimate it because the conduct feels internal. If the president or gérant uses company money for personal purposes and parks the amounts in a debit current account, the prosecutor can pursue abus de biens sociaux even when the accounts balance, because the use was contrary to the company’s interest and for a personal purpose. If a manager blocks repayment abusively or organises insolvency to avoid repaying a shareholder lender, civil liability for mismanagement and, in serious cases, banqueroute (fraudulent bankruptcy) proceedings follow. If shareholder loans are used to siphon cash out of a company that then defaults on salaries, URSSAF contributions or VAT, the criminal court examines the whole chain, including foreign recipients, through mutual legal assistance. None of this threatens a founder who documents genuine cash needs, respects the approval procedure, keeps the company able to pay its debts, and calls or grants repayment transparently. Keep the DSN (déclaration sociale nominative, the monthly payroll and social security return), VAT returns and supplier payments current while the loan is outstanding, because a company that pays its shareholder-lender while leaving wages or VAT unpaid looks insolvent and preferential.

When the loan must be cleaned up from abroad, act in writing and in the right order. First, reconcile the account with your French accountant and agree the exact principal, accrued interest, repayments and remaining balance at a fixed date, with supporting bank records. Second, have the shareholders approve the reconciliation and any amendment, such as capitalisation of interest, extension of a blocking period or partial conversion into capital, in the language of the company’s articles. Third, file the approval in the corporate records and, if the loan is converted into shares, run the formal capital increase through the guichet unique with a statutory auditor’s report where required. Fourth, correct the tax returns if interest was over-deducted or withholding was missed, using a voluntary correction before any audit notice, because spontaneous regularisation sharply reduces penalties. Fifth, if the company cannot repay despite demand, do not empty the account by unilateral transfers: send the formal demand, propose a schedule, and if needed assign the claim or set off mutual debts by a signed compensation agreement rather than by silent netting. Each step can be signed electronically from abroad, but each step must exist on paper in France before the inspector or the judge asks for it.

Conclusion

A shareholder loan is the fastest way to fund a French company from abroad, but only a documented loan survives contact with French auditors, banks and courts. Wire only under a signed agreement that states the amount, the rate, the term and the repayment path. Respect the on-demand nature of the compte courant d’associé confirmed by the Cour de cassation on 10 May 2011 and 12 February 2025, and neutralise it with a precise written blocking agreement whenever the company, a bank or a fundraising requires stability. Keep interest within the deductible ceiling of article 212 of the French tax code, declare and withhold correctly on cross-border interest, and never let an unexplained credit sit in the account, because article 109 presumes it is a distribution and the 9 September 2020 decision shows that late paperwork does not save it. Run every loan through the regulated-agreements procedure of your SARL or SAS, keep debit balances and personal spending out of the company, and reconcile the account every year with your accountant before the Paris greffe and the tax office see the numbers. Handled this way, the shareholder current account does exactly what foreign founders need: it puts cash into the French company in days, pays a fair return, and comes back on demand without a capital increase, a bank negotiation or a tax dispute.