A foreign parent company can fund its French subsidiary in a matter of hours by sending money to the subsidiary\u2019s bank account. The legal and tax file should take longer. The transfer may be share capital, a shareholder loan, a cash-pooling advance or an amount that has been booked incorrectly. Each qualification changes the documents, corporate approvals, filing route, interest analysis and evidence that the French tax administration can request.<\/p>\n
The practical question is often not simply whether a parent may lend to its subsidiary. It is whether the French subsidiary can show, years later, what it received, under which contract, on what repayment terms, at what rate, with which approvals, and whether the loan was declared on Form 2062. This article focuses on the recurring case of a foreign company financing a French SAS or SARL. It explains the threshold for the declaration of a loan, the distinction between Form 2062 and the separate rules for inter-company credit, the 2026 interest rules, and the evidence needed when the rate exceeds the statutory reference rate. It also sets out a recovery plan when the declaration was missed or the parent demands repayment during a difficult cash-flow period.<\/p>\n
The first document to prepare is a qualification memo, not a tax form. A transfer from the parent should be matched against its legal purpose, the entries in both ledgers and the parties\u2019 conduct. Founders who need the wider map can also consult the firm\u2019s French company-formation and corporate-law hub<\/a>. A capital contribution increases the subsidiary\u2019s equity and normally follows a corporate decision and a contribution procedure. A loan creates a debt: the subsidiary must, in principle, repay principal, and it may owe interest. A cash-pooling advance is usually part of a wider treasury arrangement in which several group companies lend or borrow through a centralised mechanism. A payment made without a contract, repayment schedule or reliable accounting trail may be treated differently from the label chosen by the group.<\/p>\n A French shareholder loan is often called a compte courant d\u2019associ\u00e9<\/em>. Despite the word \u201caccount\u201d, it is not the subsidiary\u2019s ordinary bank account. It records an amount that a shareholder has left or made available to the company and that may be repayable. The Conseil d\u2019\u00c9tat gave an important description in its decision of 8 November 2024, no. 470887. The court stated that such sums are, absent a special agreement or provision in the articles, \u201cremboursables \u00e0 tout moment<\/a>\u201d. It also held that reciprocal, sufficiently clear entries in the parent\u2019s and subsidiary\u2019s accounts can, unless contrary evidence is produced, show \u201cl\u2019octroi de la m\u00e8re \u00e0 sa filiale d\u2019une avance et non d\u2019une lib\u00e9ralit\u00e9\u201d. That is useful protection against an automatic reclassification as a gift, but it is not a substitute for a signed agreement and consistent records.<\/p>\n The banking-law question must be separated from the tax question. Article L.511-5 of the French Monetary and Financial Code states: \u201cIl est interdit \u00e0 toute personne autre qu’un \u00e9tablissement de cr\u00e9dit ou une soci\u00e9t\u00e9 de financement d’effectuer des op\u00e9rations de cr\u00e9dit \u00e0 titre habituel.<\/a>\u201d A foreign parent that makes one financing advance to its own subsidiary is not automatically conducting a banking business, but repeated lending to unrelated businesses raises a different issue. The group-treasury exception in Article L.511-6 is narrowly worded. It allows a company to \u201cProc\u00e9der \u00e0 des op\u00e9rations de tr\u00e9sorerie avec des soci\u00e9t\u00e9s ayant avec elle, directement ou indirectement, des liens de capital conf\u00e9rant \u00e0 l’une des entreprises li\u00e9es un pouvoir de contr\u00f4le effectif sur les autres<\/a>\u201d. The ownership chain, effective control and actual treasury purpose should therefore be documented rather than assumed.<\/p>\n This is also why an ordinary parent loan should not be confused with the statutory \u201cinter-company loan\u201d regime. The latter is a special exception with eligibility conditions linked to the relationship between the lender and borrower, the lender\u2019s accounts and the economic relationship between the companies. The official Service Public Entreprendre guidance on inter-company loans<\/a> describes those conditions and states that a qualifying loan is declared through Form 2062 within one month. That one-month rule belongs to the special inter-company-loan framework. It should not be copied mechanically onto every related-party loan from a foreign parent. For the ordinary qualifying loan declaration, the company should identify the applicable filing instructions for its status and accounting period and keep the exchange with its Service des imp\u00f4ts des entreprises, or SIE, which means the business tax office.<\/p>\n Prepare the loan instrument before the funds move. It should identify the foreign lender by its full legal name, incorporation country, registered office and registration number; the French borrower by its legal name, registered office and French identifiers; the currency; the amount or commitment ceiling; the drawdown date; the maturity; the repayment schedule; the interest formula; default consequences; any security or subordination; and the law and forum clauses. If the arrangement is a revolving facility, define the commitment, each drawdown and each repayment. If it is a cash pool, attach the treasury agreement and explain why this transfer falls within it. If it is a contribution, follow the capital process and do not leave a debt-shaped accounting entry.<\/p>\n Currency is not a cosmetic detail. A loan in US dollars, pounds sterling or another currency exposes the borrower and lender to exchange movements. The rate analysis must identify the currency in which an independent lender would have priced the same loan. The accounts must preserve the original amount, the euro translation method and the exchange differences. A later spreadsheet that converts a euro rate into a foreign-currency rate without explaining the date, benchmark and risk allocation is weak evidence. The contract should also state who bears transfer risk and whether the parent can demand repayment in the original currency.<\/p>\n The existence of the French subsidiary can be supported with official company documents. The INPI explanation of documents proving a company\u2019s existence<\/a> distinguishes the attestation of registration in the Registre national des entreprises, or RNE, from the Kbis extract. The RNE is the National Register of Enterprises. A Kbis is the official extract for a legal entity registered in the Registre du commerce et des soci\u00e9t\u00e9s, or RCS, the Commercial and Companies Register, issued by the competent commercial court registry, known as the greffe<\/em>. Put the Kbis or RNE attestation in the closing file with the loan agreement, but do not confuse proof that the company exists with proof that the debt exists.<\/p>\n A simple reconciliation should be completed on the day of funding:<\/p>\n