You wired 60,000 euros from London, New York or Dubai to keep your French company alive, and the money sits in its accounts as a shareholder loan. Months later you ask for it back, and the answers start piling up: the accountant says the funds are blocked, your co-shareholder votes against any repayment, or the new manager simply stops replying to your emails. From abroad, this feels like your own money has been confiscated by your own company. French law sees the situation very differently from how most foreign founders imagine it. The sums you left at the disposal of the company are not a capital contribution. They form a shareholder current account, known in France as a compte courant d’associé, which the law analyses as a loan that makes you a creditor of your own company. That status gives you real weapons: repayment can be demanded at any time, the company cannot hide behind cash-flow difficulties, and interest can remunerate your advance within strict tax ceilings. But the same status carries traps that foreign lenders discover too late, from blocking agreements signed to obtain a bank loan, to non-deductible interest, to outright prohibitions when the account runs the wrong way. This guide explains, step by step, how to recover a shareholder loan from abroad and how to price it without triggering a French tax reassessment.
I. How to get your shareholder loan repaid when you live abroad and the company stalls
Before choosing a vehicle for your French venture, most foreign founders compare the SAS, the SARL and the French branch of a foreign company, because the form you chose determines who decides on repayment. Once the money is inside the company, however, the same repayment logic applies across all forms: your advance is a debt of the company, recorded on the liabilities side of its balance sheet, and you rank as an ordinary unsecured creditor. Understanding that single point changes the whole negotiation, because a creditor does not ask for permission to be paid. A creditor sends a formal demand, counts a deadline, and then goes to court. The sections below follow exactly that path, adapted to the practical reality of a lender who lives outside France.
A. Demand repayment from abroad: the on-demand rule and the written demand that starts the clock
The starting rule is remarkably favourable to the lender. Where neither the articles of association nor a separate current-account agreement sets a term or a notice period, the credit balance on your shareholder current account is repayable at any time. The Cour de cassation confirmed this in plain terms on 12 February 2025, holding that “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, no. 23-17.483). In other words, unless you signed something that says otherwise, you do not need a shareholder vote, a board resolution or a justification. You need a demand.
From abroad, that demand must be built like evidence, because everything afterwards depends on its date. Send a written request for repayment by a means that proves receipt in France: a lettre recommandée avec accusé de réception addressed to the registered office (the siège social), or a bailiff’s writ (assignation or commandement) served through a French commissaire de justice, who in French procedure is the enforcement officer formerly called huissier. Email alone is weak evidence of receipt, and a phone call proves nothing. State the exact amount of the credit balance as shown in the company accounts, demand payment, and set a clear deadline, typically fifteen to thirty days. Keep the bank statements proving each transfer you made, the company balance sheets showing the liability, and any emails in which the manager acknowledged the debt. If you are both shareholder and lender through a foreign company, make sure the demand comes from the correct creditor: the foreign parent that actually advanced the funds, acting through its legal representative, not from you in a personal capacity.
Two practical points matter specifically for non-resident lenders. First, limitation: your claim is subject to the ordinary five-year limitation period for contractual debts, and the clock needs a starting point, which is another reason the written demand matters. Second, distance does not suspend anything: French courts will apply the same deadlines to you as to a Paris-based creditor, with only narrow extensions of time for parties domiciled outside France in contentious proceedings. Do not wait for the next shareholders’ meeting to raise the subject orally. A shareholder meeting approves accounts; it does not pay creditors. Your repayment demand runs on a separate track, and the sooner it is served, the sooner interest on late payment and court options become available.
If the company ignores the demand, the next step is a payment order procedure (injonction de payer) before the commercial court (tribunal de commerce) of the company’s registered office, or an ordinary action for payment. The injonction de payer is a fast, largely paper-based route suited to undisputed documentary debts, and it can be filed by a French lawyer acting under a power of attorney while you remain abroad. Where the company disputes the debt, the case moves to a full hearing, and this is where your paper trail decides the outcome: transfers proved, balance acknowledged in approved accounts, demand served, deadline expired. Founders who instead try to recover the money by offsetting it against sums they owe the company, or by emptying the company bank account with their retained access, expose themselves to criminal liability and destroy their negotiating position. A creditor enforces through the court. That discipline is what makes the rest of this guide work.
B. What the company can still oppose: blocking agreements, grace periods and insolvency ranking
The on-demand rule has three genuine limits, and each of them usually comes from a document the foreign founder signed without measuring its effect. The first is the blocking agreement, the convention de blocage. When the company borrowed from a bank, the bank frequently required the shareholders to block their current accounts so that the company would show stable quasi-equity. A blocked account cannot be reclaimed while the blocking lasts, and the block is typically decided unanimously by the shareholders or written into a contract between the company and the lender. Before sending any demand, re-read every document you signed around each bank financing: loan offers, shareholder resolutions, side letters. If a blocking agreement exists and is still in force, a repayment action will fail, and the correct move is to negotiate a partial release with the bank, often against fresh security, rather than suing the company. If no blocking clause exists, say so expressly in your demand letter, because managers sometimes invoke an imaginary block to buy time.
The second limit is the judicial grace period. When you sue for repayment, the debtor company may ask the court for time, and article 1343-5 of the Civil Code allows the judge, “compte tenu de la situation du débiteur et en considération des besoins du créancier, reporter ou échelonner, dans la limite de deux années, le paiement des sommes dues”. The judge can therefore spread payment over up to two years, and can attach conditions that secure the debt. This is not a refusal: it is a delay, and it confirms that the debt itself is not contestable. For the foreign lender, the practical consequence is to ask the court, in the alternative, for conservatory measures over French assets while the schedule runs, so that the grace period does not become a window for emptying the company.
The third limit is collective insolvency proceedings, and here timing is everything. Once a sauvegarde, redressement judiciaire or liquidation judiciaire is opened, the company is no longer allowed to pay you, and you must declare your claim to the court-appointed administrator (mandataire judiciaire) or liquidator: article L. 622-24 of the Commercial Code requires that “tous les créanciers dont la créance est née antérieurement au jugement d’ouverture” declare their claims after the opening judgment is published. Miss the declaration deadline and your claim may be extinguished, which is why a foreign lender who senses insolvency must monitor the BODACC, the French official bulletin that publishes insolvency openings, and declare immediately. Inside the proceedings, shareholder lenders rank as ordinary unsecured creditors, paid after employees, the tax authorities and secured banks, and only if funds remain. One recent clarification matters: the Cour de cassation reversed its own case law on 11 September 2024 and now holds that “l’ouverture ou le prononcé d’une liquidation judiciaire n’a pas pour effet d’entraîner la clôture du compte courant du débiteur”, because “le compte courant non clôturé avant le jugement d’ouverture constitue un contrat en cours” (Cass. com., 11 September 2024, no. 23-12.695). Concretely, the balance does not automatically become due against a guarantor on the day of the opening judgment, and every step must follow the insolvency timetable instead. If your advance was made while the company was already insolvent, expect the administrator to scrutinise the payment for possible clawback, and take advice before moving money in the suspect period.
II. Interest, deductions and the traps that turn a friendly advance into an expensive mistake
Getting repaid is only half the matter. Most foreign founders also want their advance to earn interest, and most French companies want to deduct that interest from their taxable profit. Both are possible, but France polices shareholder interest with unusual intensity: a capped deductible rate, a fully-paid-capital condition, special rules for related companies, an annual disclosure form, and criminal prohibitions when the account flows in the wrong direction. The official starting point, available in English, is the service-public guide to the associate current account, which summarises who may advance funds, how the account is fed, and how interest is taxed. The sections below go further, with the exact texts a foreign lender needs before fixing a rate or signing an agreement. Readers comparing financing routes should also look at how a capital increase dilutes existing shareholders, since leaving money in a current account is often chosen precisely to avoid that dilution.
A. Charging interest from abroad: the deductible ceiling, the annual paperwork and the withholding question
Interest on a shareholder current account is first a matter of contract: the rate is fixed by the articles of association or, far better, by a written current-account agreement signed between the company and the lender before the funds move. The agreement should state the amount advanced, the rate, the payment dates, the term or on-demand character of the loan, and the governing law. For a non-resident lender this document is the single most valuable piece of paper in the file: it proves the loan character of the transfer against any later claim that the money was a hidden capital contribution or a gift, it sets the rate the tax administration will test, and it governs repayment. Advances recorded only as vague accounting entries, fed by uncollected dividends or deferred salary with no agreement, are the classic source of disputes with co-shareholders and with the tax authorities.
On the company side, deductibility is capped. Article 39, 1-3 of the General Tax Code allows deduction of “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”, and adds that “Cette déduction est subordonnée à la condition que le capital ait été entièrement libéré”. Two consequences follow. First, only interest up to the published fiscal reference rate is deductible; the excess is added back to taxable profit, account by account with no offsetting between accounts. The reference rate moves with each year-end: it stood at 4.55 percent for financial years closed 31 December 2025, and the current table is published in the tax administration’s official commentary BOI-BIC-CHG-50-50-30 (BIC, interest on shareholder advances, rate limit), where BOFiP is the public database of French tax doctrine and BIC the industrial and commercial profits category. Second, if the company’s share capital is not fully paid up, none of the interest is deductible, a frequent surprise in newly formed SAS companies where founders left part of the capital unpaid. Before fixing a rate above the reference level, the company should model the real after-tax cost, because the excess interest is paid with after-tax money.
Where the lender is itself a company related to the borrower, typically a foreign parent funding its French subsidiary, article 212 of the General Tax Code provides that interest on sums left at the disposal of the company by a related company is deductible within the limit of the article 39 rate or, if higher, within the limit of “le taux que cette entreprise emprunteuse aurait pu obtenir d’établissements ou d’organismes financiers indépendants dans des conditions analogues”. In practice the French subsidiary may therefore deduct a market rate above the fiscal reference rate, but only if it can prove, with bank offers or comparable loan documentation, what an independent bank would have charged it in similar conditions. Large balances then meet a second ceiling: article 212 bis of the General Tax Code caps deductible net financial charges at the higher of “trois millions d’euros” or “30 % de son résultat” determined under that article, with carry-forward mechanics for the disallowed portion. Shareholder interest counts toward that cap alongside bank interest, so an intra-group loan that looked cheap can become expensive once aggregated with the company’s other financing. The company must also file each year a loan-agreement return (the form 10142 declaration of loan contracts) by the corporate tax return deadline, since shareholder advances legally constitute loans. Missing that disclosure does not kill deductibility by itself, but it flags the file for the auditor.
On the lender side, the tax treatment depends on who you are and where you are taxed. If you are an individual French tax resident, the interest is investment income taxed under the single flat-rate levy (the PFU, prélèvement forfaitaire unique, a flat tax of 30 percent including social charges, technically 31.4 percent in some presentations) or, on election, under the progressive income-tax scale; article 125 A of the General Tax Code organises the levy collected on such interest, expressly including interest on sums made available to a company by its shareholders and carried on an individual blocked account. If you are not a French tax resident, the picture is more favourable than most founders fear: according to published international tax summaries, interest on French-source loans paid to lenders domiciled outside France has generally been exempt from French withholding since 1 March 2010, with treaty provisions and a 75 percent levy reserved for payments to entities in non-cooperative states (ETNC, the French list of non-cooperative tax jurisdictions). That general exemption removes a cash-flow obstacle, but it does not remove the reporting: the interest remains taxable in your country of residence, the applicable treaty must be checked before the first payment, and the French company must keep proof of the lender’s residence. If you are a foreign company subject to French corporate tax (IS, impôt sur les sociétés) on the interest, for example through a French branch (succursale), the interest is financial income included in the French taxable result, and the rate discussion in this section applies symmetrically. Readers who need the wider French corporate tax picture, rates, instalments and filing deadlines, will find it in the corporate tax guide for foreign-owned French companies.
B. The red lines: debit accounts, interest-free loans between companies and the thin-capitalisation signal
The prohibitions come first, because violating one can void the contract itself. A shareholder current account is meant to be in credit: the shareholder lends to the company. The reverse, a debit account where the shareholder owes the company, is forbidden to individuals on pain of nullity. Article L. 223-21 of the Commercial Code provides that “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”. The same prohibition applies in public limited companies through article L. 225-43, and it is extended to the simplified joint-stock company by article L. 227-12, under which “Les interdictions prévues à l’article L. 225-43 s’appliquent, dans les conditions déterminées par cet article, au président et aux dirigeants de la société”. In plain terms: if you are an individual manager or president of a SARL (the French limited liability company), an SA (the public limited company) or a SAS (the simplified joint-stock company, the vehicle most foreign founders choose), you may not borrow from the company or leave your current account in debit. Only legal entities, companies lending to companies, may carry debit balances, which is the everyday reality of intra-group cash pooling. A foreign founder who pays personal expenses from the French company account and lets the balance go negative is not managing cash flexibly. That founder is signing a void loan and waving a flag at the tax administration and, in serious cases, at the criminal courts.
The second red line is the interest-free loan between companies. An individual shareholder may freely waive interest; a company lender may not do so without risk. Where a foreign parent leaves funds with its French subsidiary without charging interest, the French tax administration can treat the forgone interest as an abnormal management act (acte anormal de gestion) and add notional interest back to the French company’s profit, or treat the advantage as a deemed distribution with withholding consequences. The same logic extends to services billed interest-free and to guarantees given for nothing. Documenting an arm’s-length rate in the current-account agreement, supported by the bank-comparable evidence described for article 212, is therefore not optional styling. It is the file that answers the auditor’s first question. Symmetrically, an excessive rate far above any market level invites recharacterisation of the excess as a disguised dividend, taxed in the hands of a shareholder lender as a distribution rather than as interest, with the corresponding withholding regime. The safe corridor runs from the fiscal reference rate up to a documented market rate, and every step outside it must be priced and justified in writing before the year-end, not reconstructed during the audit.
The third signal is the balance-sheet picture the loans create. A French subsidiary financed almost entirely by shareholder current accounts, with minimal equity, attracts attention on two fronts. For tax purposes, the thin-capitalisation limitations and the article 212 bis cap described above mechanically reduce the value of debt funding past a point. For company law purposes, persistent losses that halve the equity trigger the formal procedure for recapitalisation or dissolution, and directors who keep trading while the company is insolvent face personal liability for the shortfall. This is why the choice between leaving money in a current account and converting it into capital must be revisited every year at the accounts meeting, not once at incorporation. Conversion of a current-account balance into capital, by set-off of the claim against new shares, is a standard operation, and it is also the moment to compare dilution, deductibility lost on converted interest, and the bank ratios that the company’s lenders require. Founders who opened the company account from abroad and fought the deposit paperwork will remember how the initial capital deposit and the company bank account were set up; the current account is the continuation of that financing story, and it deserves the same documentary care.
Conclusion
A shareholder loan to your French company is neither a gift nor a hostage. It is a loan, repayable on demand unless you agreed otherwise, carrying interest within fiscal ceilings, and enforceable from abroad through a documented demand and the French commercial courts. Before you act, pull the full file: the current-account agreement, every blocking clause signed for a bank, the capital release status, the rate table for your year-end, and the insolvency position of the company. Send the written demand, calendar the five-year limitation, declare the claim immediately if proceedings open, and never recover the money by hand. Price the interest inside the safe corridor, file the annual loan return, and keep companies on interest-bearing terms. Handled this way, the compte courant d’associé does exactly what foreign founders need: flexible funding on the way in, and a creditor’s rights on the way out.