You formed a company in France, it finally makes money, and you live in London, New York, Dubai or Singapore. The profits sit in the French bank account, and a simple question blocks everything: how do you lawfully move that money to yourself? Wiring it out as a transfer, an invoice with no substance or an informal advance exposes you to some of the harshest reclassifications in French law, from fictitious dividends to withholding tax reassessed with penalties. There is only one clean route, and it runs in two stages. First, the company must approve its annual accounts and vote a dividend distribution in strict compliance with the French Commercial Code, even when every shareholder and director lives abroad. Second, France withholds tax at source on the dividends paid to non-residents, and you recover the excess only through the exemption or treaty mechanism that fits your situation. This article walks you through both stages, with the exact code provisions, two recent court decisions that show where foreign owners lose, and the practical calendar that keeps the distribution valid.<\/p>\n
No dividend can exist before the annual accounts are approved. Article L. 232-11 of the French Commercial Code defines the starting point: \u201cLe b\u00e9n\u00e9fice distribuable est constitu\u00e9 par le b\u00e9n\u00e9fice de l’exercice, diminu\u00e9 des pertes ant\u00e9rieures, ainsi que des sommes \u00e0 porter en r\u00e9serve en application de la loi ou des statuts, et augment\u00e9 du report b\u00e9n\u00e9ficiaire.\u201d<\/a> In plain English, the distributable profit is the profit for the financial year, minus prior losses and the sums that must go to reserves by law or by the articles of association (the statuts), plus any retained earnings carried forward (the report \u00e0 nouveau). If that calculation gives zero or a negative figure, there is nothing to distribute, and any payment labelled a dividend is unlawful.<\/p>\n Once the accounts are approved and distributable sums are identified, article L. 232-12 provides that \u201cApr\u00e8s approbation des comptes annuels et constatation de l’existence de sommes distribuables, l’assembl\u00e9e g\u00e9n\u00e9rale d\u00e9termine la part attribu\u00e9e aux associ\u00e9s sous forme de dividendes.\u201d<\/a> Only the shareholders, acting collectively after approving the accounts, decide the share paid out as dividends. Neither the pr\u00e9sident of a SAS (soci\u00e9t\u00e9 par actions simplifi\u00e9e, the flexible joint-stock company most foreign founders choose) nor the g\u00e9rant of a SARL (soci\u00e9t\u00e9 \u00e0 responsabilit\u00e9 limit\u00e9e, the limited liability company with stricter statutory rules) can distribute dividends alone. In a SAS, the statuts decide which decisions must be taken collectively by the shareholders and in what form, since \u201cLes statuts d\u00e9terminent les d\u00e9cisions qui doivent \u00eatre prises collectivement par les associ\u00e9s dans les formes et conditions qu’ils pr\u00e9voient.\u201d<\/a> under article L. 227-9, but the approval of the annual accounts and the allocation of profits always belong to the shareholders collectively. In a SARL, the same logic applies through the ordinary general meeting.<\/p>\n Living abroad changes nothing about these duties, and it does not excuse absence. Article 1844 of the French Civil Code states that \u201cTout associ\u00e9 a le droit de participer aux d\u00e9cisions collectives.\u201d<\/a> Every shareholder has the right to take part in collective decisions, and in practice foreign owners exercise it remotely: well-drafted statuts of a SAS allow consultation in writing or by videoconference, and a sole shareholder (associ\u00e9 unique) simply records the decisions in signed minutes (proc\u00e8s-verbal). What matters is the paper trail: dated minutes identifying the meeting, the accounts approved, the distributable profit calculated, and the dividend voted. A foreign shareholder who signs nothing and lets the French accountant \u201chandle it\u201d has no proof that a valid distribution was ever decided, and that gap becomes expensive the day the tax administration or a co-shareholder challenges the payments.<\/p>\n Approval is also a filing obligation, not a private formality. After the meeting, the company must file its annual accounts, and the dedicated official page explains the procedure for the d\u00e9p\u00f4t des comptes annuels d’une soci\u00e9t\u00e9<\/a>, now routed through the single digital gateway (guichet unique) operated at procedures.inpi.fr<\/a> by the INPI (Institut national de la propri\u00e9t\u00e9 industrielle, the French intellectual property and business formalities office). The greffe (the registry office of the commercial court, which keeps the RCS, the Registre du commerce et des soci\u00e9t\u00e9s, the French companies register) receives the accounts, and third parties \u2014 including banks and future buyers \u2014 check them there. Filing late does not cancel the dividend, but it signals disorder, draws penalties, and weakens your position if the distribution is later disputed.<\/p>\n The most dangerous trap for foreign owners concerns retained earnings. Suppose year one ends with a profit that the shareholders leave in the report \u00e0 nouveau instead of distributing. In year two, the shareholders meet outside the annual approval meeting and vote a dividend taken from that carried-forward profit. The Cour de cassation (the French supreme court for civil and commercial matters) ruled on exactly this pattern on 12 February 2025 in a widely noted SAS case (pourvoi no. 23-11.410, published in the Bulletin, ECLI:FR:CCASS:2025:CO00072<\/a>). The Court held that the carried-forward profit of one year is included in the distributable profit of the following year, so that \u201cseule l’assembl\u00e9e approuvant les comptes de cet exercice pourra d\u00e9cider son affectation et, le cas \u00e9ch\u00e9ant, sa distribution.\u201d<\/em> Only the meeting that approves the accounts for that following year can allocate the carried-forward profit and distribute it. A separate meeting, convened months later to distribute the old report \u00e0 nouveau, adopts a resolution that incurs nullity. Foreign groups that \u201csweep\u201d old retained earnings by a quick written resolution between closings must therefore attach every distribution to the annual approval meeting for the year in which the carried-forward profit sits, or the dividend can be annulled.<\/p>\n The distribution resolution must say precisely what is distributed and from which line it comes. Where the shareholders draw on reserves at their disposal, the decision must expressly identify the reserve accounts used, because article L. 232-11 requires that transparency and gives priority to the distributable profit of the year. A resolution that votes \u201ca dividend of 80,000 euros\u201d without stating whether it comes from the yearly profit, the report \u00e0 nouveau or a specific reserve is an invitation to dispute: in a later conflict between a departing foreign shareholder and the remaining partners, or during a tax audit (contr\u00f4le fiscal), nobody can reconstruct what was decided. The minutes should therefore record the amount of distributable profit, the portion allocated to dividends per share, the portion carried forward or placed in reserves, and the payment date.<\/p>\n That payment date is not free. Article L. 232-13 of the Commercial Code provides that \u201cla mise en paiement des dividendes doit avoir lieu dans un d\u00e9lai maximal de neuf mois apr\u00e8s la cl\u00f4ture de l’exercice. La prolongation de ce d\u00e9lai peut \u00eatre accord\u00e9e par d\u00e9cision de justice.\u201d<\/a> Dividends voted must actually be paid within nine months after the financial year-end, and only a court can extend that period. A foreign owner who votes a dividend in June for a December year-end and only wires the funds fourteen months later, once the home-country cash need arises, breaches the rule. The practical fix is simple: align the approval meeting and the cash planning so the nine-month deadline is met, or apply to the court (tribunal) for an extension before the deadline expires, with reasons linked to the company’s cash position.<\/p>\n Paying without profits is punished as a fictitious dividend (dividende fictif). Article L. 232-12 closes with the warning that \u201cTout dividende distribu\u00e9 en violation des r\u00e8gles ci-dessus \u00e9nonc\u00e9es est un dividende fictif.\u201d<\/a> Any dividend distributed in breach of the rules on distributable profit and proper approval is fictitious. The consequences fall on two sides: the shareholders may be ordered to repay dividends received in bad faith, and the directors face criminal liability for distributing fictitious dividends. For a foreign founder who is also pr\u00e9sident or g\u00e9rant, that criminal exposure is personal and does not disappear at the border. The URSSAF (Unions de recouvrement des cotisations de s\u00e9curit\u00e9 sociale et d’allocations familiales, the French social security collection agency) and the tax administration share information, so an unjustified cash extraction flagged in one audit quickly migrates to the other.<\/p>\n Paradoxically, even a defective resolution produces effects until a court kills it. In the same 12 February 2025 ruling, the Cour de cassation recalled that \u201cles d\u00e9lib\u00e9rations d’une soci\u00e9t\u00e9 commerciale s’imposent aux associ\u00e9s tant que la nullit\u00e9 n’en a pas \u00e9t\u00e9 prononc\u00e9e.\u201d<\/em> Corporate resolutions bind the shareholders until annulment is pronounced. In that case, the sellers of the shares had voted themselves a 60,000 euro dividend from the report \u00e0 nouveau after signing a sale agreement, the buyer refused to pay it, and the court of appeal sided with the buyer \u2014 but the Cour de cassation quashed that outcome, because the buyer had never obtained annulment of the distribution resolution. The lesson for a foreign owner cuts both ways. If you are the beneficiary, a buyer or a hostile majority cannot simply ignore a voted dividend; they must have it annulled in court. If you are the new owner discovering that the sellers voted themselves a dividend from old retained earnings just before the sale, you must act fast and seek annulment rather than refusing payment unilaterally. In share deals involving French targets, the dividend clause of the sale agreement (convention de cession) should therefore state who owns distributions voted before and after closing, and the purchaser should verify in the greffe filings and the minutes which meeting voted what.<\/p>\n From abroad, execution is a matter of discipline: signed minutes, updated shareholder ledger (registre des mouvements de titres) for a SAS, bank transfer referencing the resolution date, and accounts filed on the guichet unique. Each document answers one question an auditor or a judge will ask \u2014 was there a profit, who approved it, when was it paid. When all four answers are documented, the distribution survives; when any is missing, the foreign owner discovers that French company law has no \u201csubstance over form\u201d rescue for dividends.<\/p>\n The moment a French company pays dividends to a shareholder who is not a French tax resident, France taxes at source. The Conseil d’\u00c9tat (the supreme court for administrative and tax disputes) summarised the mechanism in these terms: \u201cLe 2 de l’article 119 bis du code g\u00e9n\u00e9ral des imp\u00f4ts soumet \u00e0 une retenue \u00e0 la source les revenus distribu\u00e9s par des personnes morales fran\u00e7aises \u00e0 des personnes qui n’ont pas leur domicile fiscal ou leur si\u00e8ge en France.\u201d<\/a> Article 119 bis, paragraph 2, of the CGI (Code g\u00e9n\u00e9ral des imp\u00f4ts, the French general tax code) subjects income distributed by French legal persons to a withholding tax (retenue \u00e0 la source) when the beneficiary has neither a tax domicile nor a registered office in France. The full provision is readable at article 119 bis du CGI<\/a>. For a foreign founder, this means the French company withholds the tax itself and pays you the net dividend; you never receive the gross amount and \u201csettle later\u201d in France.<\/p>\n The rate depends on who you are. Article 187 of the CGI, which sets the withholding rates, is available at article 187 du CGI<\/a>. For corporate shareholders and bodies of any form, the rate is the standard corporate income tax rate set by article 219 \u2014 and article 219, paragraph I, states that \u201cLe taux normal de l’imp\u00f4t est fix\u00e9 \u00e0 25 %.\u201d<\/a> the standard rate of IS (imp\u00f4t sur les soci\u00e9t\u00e9s, French corporate income tax) is 25 percent. For individual beneficiaries, article 187 sets the rate at 12.8 percent. And where dividends are paid into a non-cooperative state or territory (\u00c9tat ou territoire non coop\u00e9ratif, the French blacklist defined by reference to article 238-0 A), the rate jumps to 75 percent unless the payer proves the payment has neither the object nor the effect of locating the income there for tax fraud purposes. A foreign holding company therefore faces 25 percent French withholding on the gross dividend, a foreign individual 12.8 percent, and structures routed through blacklisted jurisdictions a prohibitive 75 percent.<\/p>\n The main exit from the 25 percent levy is the European parent-subsidiary exemption. Article 119 ter of the CGI provides that \u201cLa retenue \u00e0 la source pr\u00e9vue au 2 de l’article 119 bis n’est pas applicable aux dividendes distribu\u00e9s \u00e0 une personne morale qui remplit les conditions \u00e9num\u00e9r\u00e9es au 2 du pr\u00e9sent article par une soci\u00e9t\u00e9 ou un organisme soumis \u00e0 l’imp\u00f4t sur les soci\u00e9t\u00e9s au taux normal.\u201d<\/a> The withholding does not apply to dividends paid by a company subject to corporate tax at the standard rate to a legal person meeting the listed conditions. Those conditions, verified in the version of article 119 ter in force on 14 September 2026, are cumulative: the parent must prove it is the effective beneficiary (b\u00e9n\u00e9ficiaire effectif) of the dividends; it must have its place of effective management in a European Union member state or in a European Economic Area state that has an administrative assistance treaty with France; it must take one of the listed EU company forms; it must hold directly, uninterrupted for two years or more, at least 10 percent of the capital of the distributing company (or commit to hold it for two years and appoint a tax representative); and it must itself be liable to corporate tax in its state without option or exemption. Where the parent cannot yet show two years of holding, the commitment mechanism with a designated representative keeps the exemption available from day one, provided the two-year holding is actually completed.<\/p>\n But the exemption is policed, and the leading warning for foreign groups comes from the Conseil d’\u00c9tat’s decision of 13 June 2018 (no. 397127, ECLI:FR:CECHS:2018:397127.20180613<\/a>). A French SAS had paid dividends to a Luxembourg SARL owned through a chain ending with a non-EU resident, and the tax administration reassessed the withholding by invoking the anti-abuse exception. The Conseil d’\u00c9tat upheld the reassessment, finding in its sovereign assessment that \u201cla cha\u00eene des participations en litige avait comme objet principal, au sens des dispositions du 3 de l’article 119 ter du code g\u00e9n\u00e9ral des imp\u00f4ts, de tirer avantage de l’exon\u00e9ration de retenue \u00e0 la source pr\u00e9vue au 1 du m\u00eame article et que la soci\u00e9t\u00e9 requ\u00e9rante ne pouvait d\u00e8s lors b\u00e9n\u00e9ficier de cette exon\u00e9ration.\u201d<\/em> The participation chain had as its principal object taking advantage of the withholding exemption, so the exemption was lost. Note the historical detail: at the time, the anti-abuse test targeted chains controlled by non-EU residents; the current paragraph 3 of article 119 ter now denies the exemption to dividends paid under an arrangement whose principal purpose is obtaining a tax advantage contrary to the provision’s object, where the arrangement is not genuine in light of all relevant facts. For a foreign founder outside the EU who inserts a holding company in an EU member state mainly to erase French withholding, the Eurotrade Fish ruling is the precedent the auditor will cite. The holding must have economic reality \u2014 premises, staff, decision-making, activity \u2014 or the 25 percent withholding returns with interest and penalties.<\/p>\n Outside the EU exemption, bilateral tax treaties (conventions fiscales) are the second relief channel. France has signed treaties with most investor home countries, and nearly all of them cap the French withholding on dividends at 15 percent, 10 percent or even 5 percent for substantial corporate holdings, provided the beneficiary is genuinely resident in the treaty state. The mechanism works in two modes. Under the reduced-rate-at-source procedure, the foreign shareholder gives the French payer a certificate of residence before the payment, and the company withholds at the treaty rate directly. Under the refund procedure, the company withholds at the domestic rate and the shareholder reclaims the difference from the French tax administration afterwards. The residence affidavit used for this purpose is the official form no. 5000-SD, published by the French tax administration at impots.gouv.fr (form 5000-SD, affidavit of residence)<\/a>, to be completed with the help of the home-country tax authority and returned through the French payer or directly to the non-residents tax office (Service des imp\u00f4ts des particuliers non-r\u00e9sidents). Deadlines are strict, and a reclaim filed late or on the wrong form is rejected without examination of the merits, so diarise the treaty timetable as carefully as the nine-month payment deadline.<\/p>\n Individual founders sometimes discover that the 12.8 percent French withholding exceeds what their home country would charge, or that it creates double taxation when the home country taxes the same dividend. Most treaties solve this by letting the home country grant a tax credit for the French withholding up to the treaty-capped rate, with any French excess refundable in France. Keep every voucher (attestation de retenue) issued by the French company: the home-country return and the French reclaim both require proof of the amount actually withheld. Founders resident in the United States, the United Kingdom or the Gulf states should check their treaty’s dividend article before the distribution is voted, because the applicable cap and the \u201cbeneficial owner\u201d condition vary, and restructuring shareholding after the dividend is voted never improves the rate.<\/p>\n Three errors account for most of the files that reach our office. The first is distributing without approved accounts that show distributable profit \u2014 the fictitious dividend trap of article L. 232-12, which ends in repayment orders and, for the director, criminal exposure. The second is voting the dividend at the wrong meeting, typically a mid-year resolution sweeping old retained earnings, which the Cour de cassation’s 12 February 2025 decision exposes to annulment. The third is assuming the money can travel gross: paying a foreign parent or a foreign individual the full dividend and leaving the withholding for \u201clater\u201d creates an immediate shortfall debt of the company toward the Treasury, with late interest running from the payment date. Each error has the same root cause \u2014 treating the French company as a branch of the founder’s foreign business rather than as a French legal person with its own meetings, filings and tax duties. The BODACC (Bulletin officiel des annonces civiles et commerciales, the official gazette where company events are published) and the greffe filings keep a permanent trace of what was decided and when, so reconstruction after the fact never works.<\/p>\n The compliant sequence, run from abroad, therefore looks like this: close the accounts with the French accountant (expert-comptable); hold the approval meeting \u2014 physically, by videoconference or in writing as the statuts allow \u2014 that approves the accounts, computes the distributable profit and votes the dividend with its payment date inside the nine-month window; file the accounts on the guichet unique; have the company withhold at the correct domestic, exempted or treaty rate, with the residence certificate or exemption file assembled before payment; wire the net dividend with a reference to the resolution; and calendar the reclaim if tax was over-withheld. Done in this order, the distribution is valid under company law, correctly taxed at source, and documented for both the French auditor and the home-country tax return.<\/p>\n Taking profits out of a French company from abroad is neither a simple transfer nor a negotiation with the accountant: it is a two-stage legal operation. Company law decides whether a dividend exists at all \u2014 approved accounts, distributable profit, collective shareholder vote, payment within nine months \u2014 and the Cour de cassation’s 12 February 2025 ruling shows that even the meeting chosen for the vote can void the distribution. Tax law then decides how much of that dividend crosses the border \u2014 domestic withholding at 25 percent for foreign companies and 12.8 percent for foreign individuals, EU parent-subsidiary exemption under strict and policed conditions, or treaty-capped rates recovered through the official reclaim forms. Foreign founders who respect this order, document each step from abroad, and check the exemption conditions before wiring, turn a high-risk extraction into a routine annual gesture. Those who wire first and document later hand the French administration and their own co-shareholders the exact weapons French law forged for that situation.<\/p>\n Talk it through with a lawyer before you vote, pay or wire anything. Our firm offers a telephone consultation within 48 hours with a counsel of the firm: call +33 6 46 60 58 22<\/a>. You can also reach us through our contact page<\/a> with a short summary of your company, your residence country and the distribution you are planning.<\/p>\n","protected":false},"excerpt":{"rendered":" Foreign owner of a French company? How to approve the accounts, vote dividends within nine months, pay French withholding tax and recover treaty relief from abroad.<\/p>\n","protected":false},"author":251031309,"featured_media":16442,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kj_source_type":"","_kj_official_id":"","_kj_official_url":"","_kj_judilibre_id":"","_kj_jur":"","_kj_lieu":"","_kj_chambre":"","_kj_rg":"","_kj_date":"","activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":4,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"federated","footnotes":""},"categories":[80314,80313],"tags":[],"class_list":["post-2121324","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-decryptage","category-doing-business-in-france"],"yoast_head":"\nB. Vote, record and pay the dividend within nine months<\/h3>\n
II. How much withholding tax will France take on my dividends, and how do I get treaty relief?<\/h2>\n
A. The French withholding: who pays what rate before the money leaves France<\/h3>\n
B. Getting treaty relief and reclaiming overpaid withholding from abroad<\/h3>\n
Conclusion<\/h2>\n
Need a quick opinion on your case<\/h2>\n