You live in London, New York, Dubai or Singapore, and your French company needs cash: to pay the first salaries, to cover the office rent, to survive the months before the first invoices are paid. You wire money from your personal account, or from your foreign holding company, and you assume the paperwork can wait. Months later, the French accountant asks an uncomfortable question: was that wire a capital contribution, a shareholder loan, or something else entirely? The answer decides whether you can take the money back out, whether the company can deduct interest, whether French withholding tax applies, and whether a future insolvency could turn that friendly advance into a personal liability. This guide explains, for a foreign owner living abroad, how to put money into a French SARL or SAS, how the shareholder current account (compte courant d’associ\u00e9) really works, when you can demand repayment, how interest is taxed and capped, and what to do when the company cannot repay. Every French acronym is explained, every decisive rule is tied to its official text, and every step is written for someone who manages the company from outside France.<\/p>\n
French law gives a foreign owner two clean channels for funding a French company: permanent money (share capital, through subscription or a capital increase) and temporary money (the shareholder loan, called in France an advance on current account, or avance en compte courant). The two channels look similar on a bank statement \u2014 a wire from abroad into the company account \u2014 but they obey opposite legal logics. Capital is locked in: it can only come back out through dividends, a formal capital reduction, or liquidation. A shareholder loan is a debt of the company toward you: the company must repay it, in principle on your simple demand. Choosing the wrong channel, or mixing them without paperwork, is the most common and most expensive mistake foreign founders make. The sections below walk through each route, with the exact formalities a non-resident must complete.<\/p>\n
Share capital is the money (and, sometimes, assets) that the owners permanently dedicate to the company in exchange for shares or parts sociales. In a SARL (soci\u00e9t\u00e9 \u00e0 responsabilit\u00e9 limit\u00e9e, the French limited liability company with parts sociales and a g\u00e9rant, or manager), the initial capital can be as low as one euro, but banks, landlords and suppliers read a thin capital as a warning signal. In a SAS (soci\u00e9t\u00e9 par actions simplifi\u00e9e, the flexible company form with a pr\u00e9sident and articles the founders draft flexibly), the same flexibility applies. When the company later needs reinforcement, the owners vote a capital increase (augmentation de capital).<\/p>\n
Only the extraordinary general meeting \u2014 the assembl\u00e9e g\u00e9n\u00e9rale extraordinaire, the meeting of owners competent for changes to the articles \u2014 can decide a capital increase. Article L. 225-129 of the Commercial Code states that the extraordinary general meeting alone is competent to decide an immediate or deferred capital increase<\/a>, on the basis of a report from the board or management. In a SARL, the parallel regime applies: Article L. 223-32 of the Commercial Code provides that new cash parts must be paid up at subscription for at least one quarter of their nominal value, with the balance to be released in one or more steps within five years from the day the increase becomes definitive<\/a>. The same article adds a safeguard foreign investors often discover too late: if the increase is not carried out within six months from the first deposit of funds, the refund rules of Article L. 223-8 can be invoked<\/a> \u2014 meaning subscribers can reclaim their money when the operation stalls.<\/p>\n In practice, funding from abroad follows a fixed chain. First, the owners sign the minutes voting the increase and, where needed, waive or organise preferential subscription rights. Second, the new money is paid into a blocked account \u2014 either with a French bank, which will demand full identification of the foreign subscriber and the origin of the funds, or with a notary \u2014 which then issues the deposit certificate (certificat du d\u00e9positaire). Third, the articles are updated and the file is submitted through the INPI single portal (the Guichet unique, the mandatory online filing desk run by the INPI, the French intellectual-property and business-registration institute<\/a>), which replaced the old paper filings with the commercial court registry. Fourth, the registry (the greffe, the clerk office of the commercial court) records the change in the Trade and Companies Register (the RCS, registre du commerce et des soci\u00e9t\u00e9s), the company receives its updated Kbis (the Kbis extract, the official identity card of a French company, issued by the greffe), and the notice is published in the BODACC (the Bulletin officiel des annonces civiles et commerciales, the official gazette where company creations, capital changes and insolvency openings are published). Each step leaves a trace: keep the wire slips, the deposit certificate, the minutes and the updated Kbis together, because the tax administration and a future buyer will ask for exactly this chain.<\/p>\n Capital money has one decisive tax feature: it is not deductible, and it comes back only through the dividend route, with its own withholding tax for non-residents. That rigidity is the price of permanence. Capital strengthens the balance sheet, reassures creditors, and supports borrowing \u2014 but it cannot be withdrawn on a simple request. Before wiring a large amount as capital, a foreign owner should therefore ask whether part of the funding would be better structured as a repayable advance. That is the role of the shareholder loan.<\/p>\n One warning specific to groups: when the money comes not from you personally but from your foreign parent company, French banking-monopoly law still allows it. Article L. 511-7 of the Monetary and Financial Code expressly permits a company to carry out treasury operations with companies with which it has, directly or indirectly, capital links giving one of the linked companies effective control over the others<\/a>. Intra-group cash advances from a foreign parent to its French subsidiary are therefore lawful in principle \u2014 but their interest rate, documentation and arm’s length character will be tested by the tax auditor, as Part II explains.<\/p>\n The compte courant d’associ\u00e9 \u2014 literally the associate current account \u2014 is the everyday tool by which a French company borrows from its own owners. The official business portal describes it plainly: to meet cash-flow needs, partners, officers or employees may place funds at the disposal of the company, and these advances are treated as interest-bearing loans, with the lending partner holding the status of company creditor<\/a>. For a foreign founder, this is the natural way to bridge the gap between incorporation and profitability: you advance 20,000 or 100,000 euros from abroad, the company spends it, and the company owes it back to you.<\/p>\n Three practical rules decide whether that advance protects you or exposes you. First, put it in writing. The terms of the current account \u2014 remuneration, duration, repayment conditions \u2014 should be set either in the articles or in a dedicated current-account agreement between the company and the partner, as the service-public guidance recalls<\/a>. From abroad, a signed agreement countersigned by the g\u00e9rant or pr\u00e9sident, with the amount, currency, interest rate, term and repayment mechanics, is worth more than a stack of wire slips. Without it, you will struggle to prove the rate, the maturity, or even that the wire was a loan rather than a hidden capital contribution or, worse, a gift.<\/p>\n Second, respect the direction of the flow. French company law strictly forbids the reverse operation: the company lending to its own individual owners or managers. Article L. 223-21 of the Commercial Code provides that, on pain of nullity of the contract, managers or members other than legal entities are prohibited from contracting loans of any kind from the company, from having it grant them an overdraft on current account or otherwise, and from having it guarantee their obligations toward third parties<\/a>, with the ban extended to spouses, ascendants, descendants and intermediaries. A foreign founder who treats the French company account as a personal wallet \u2014 withdrawing funds as personal advances \u2014 risks nullity of the operation and, in insolvency, personal contribution claims. Money must flow from the owner to the company as a documented loan; the opposite direction is reserved for dividends, salary duly voted, or repayment of your own prior advance.<\/p>\n Third, run the regulated-agreements procedure (conventions r\u00e9glement\u00e9es) when your position requires it. In a SAS, Article L. 227-10 of the Commercial Code requires the auditor \u2014 or, where none has been appointed, the pr\u00e9sident \u2014 to present the members with a report on agreements entered into directly or through intermediaries between the company and its pr\u00e9sident, one of its officers, or a shareholder holding more than 10% of voting rights<\/a>, with the members voting on that report. The same article specifies that agreements not approved still produce their effects, with the interested person and possibly the officers bearing any harmful consequences for the company<\/a>. A shareholder loan from a foreign majority holder therefore belongs in that report and in the minutes \u2014 not hidden in the accounting entries. In a single-member company, the convention is simply recorded in the decision register. Skipping this step does not void your loan automatically, but it shifts the risk of any damage onto you personally.<\/p>\n For the foreign lender, two cross-border points complete the picture. The advance should be denominated and documented with an eye on proof of origin: French banks receiving funds from outside the European Union routinely ask for the loan agreement, identification, and sometimes a declaration of the source of funds under anti-money-laundering rules, and a missing agreement can hold the incoming wire for weeks. And the interest clause should be drafted from day one with the French tax ceilings in mind \u2014 because the rate you write determines what the company can deduct and what you will be taxed on, which is the subject of Part II.<\/p>\n Putting money in is only half of the operation. The other half \u2014 recovering it from abroad without creating a tax reassessment or a liability \u2014 is where foreign owners most often stumble. French law treats your shareholder advance as an ordinary civil loan, repayable in principle whenever you ask, yet overlays that simple principle with tax ceilings on interest, withholding tax for non-residents, and a hard lesson from insolvency courts: repaying yourself at the wrong moment, or abandoning your claim informally, can backfire. This part sets out the repayment right, the interest and tax mechanics, and the three exits available when the company cannot pay.<\/p>\n The starting point is civil law, and it is remarkably protective of the lender. A shareholder advance is analysed as a loan for consumption (pr\u00eat de consommation): Article 1902 of the Civil Code provides that the borrower must return the things lent, in the same quantity and quality, at the agreed term<\/a>. Where, as is usual, no fixed term was agreed, the advance is a loan of indefinite duration \u2014 and the Cour de cassation draws the full consequence. In a widely noted commercial ruling, the Court endorsed the principle that absent a contrary stipulation, any member is entitled to demand at any time, regardless of the reasons for the demand, repayment of the balance of his current account, since the advance constitutes a loan of indefinite duration<\/a> (Cass. com., 12 February 2025, appeal no. 23-17.483). In that case, a former member of a company claimed the credit balance of its current account after a capital reduction and buyback of its shares; the Court confirmed both the right to repayment and that the payment of the share price and the repayment of the current account were independent obligations. For a foreign owner, the message is concrete: unless your agreement says otherwise \u2014 a blocking clause (convention de blocage) fixing the funds for a defined period, which the administration accepts as giving the company genuine permanent capital \u2014 you can call the loan back by simple demand, even from abroad, by registered letter or bailiff’s writ (huissier, the French judicial officer competent for service of process, now titled commissaire de justice).<\/p>\n That strength is also a danger for the company: a sudden call can push a fragile treasury into cessation of payments (the French insolvency trigger, when the company can no longer meet its due liabilities with its available assets). Responsible founders therefore combine the legal right with a practical timetable \u2014 staged repayments, subordination to bank debt, or a voluntary blocking period negotiated with the banks \u2014 and record it in an amendment, filed with the accounts. A blocking agreement can also help the company present the advance as quasi-equity to lenders, since, as the official guidance notes, a blocked current account means the company is no longer obliged to repay the funds and therefore holds genuine permanent capital<\/a>, and the blocking decision must be taken unanimously or in a written convention.<\/p>\n Interest is where the tax administration watches most closely. If your agreement provides for interest \u2014 and it should, because a loan bearing no interest from a foreign related party invites transfer-pricing questions \u2014 two ceilings cap what the French company can deduct. Article 39, 1-3\u00b0 of the General Tax Code allows deduction of interest paid to members on sums they leave or place at the disposal of the company, in addition to their share of capital, only within the limit of interest computed at a rate equal to the annual average of the average effective rates charged by credit institutions for variable-rate loans to businesses with an initial duration exceeding two years<\/a>. The administration publishes this maximum rate quarterly, and any excess interest is non-deductible and reclassified. The same article adds a condition foreign founders sometimes miss: this deduction is conditional on the capital having been fully paid up<\/a> \u2014 so complete the liberation of your subscribed capital before booking deductible interest. Where the lender is not you personally but your foreign parent company or a related company, a second test applies: Article 212, I of the General Tax Code makes interest on sums left or placed at the disposal of a company by an associated company deductible only within the limit of the Article 39 rate or, if higher, the rate the borrowing company could have obtained from independent financial institutions under similar conditions<\/a> \u2014 which means keeping a written transfer-pricing memo comparing your rate with genuine bank offers.<\/p>\n On your side as a non-resident lender, the interest you receive is French-source investment income. Article 120 of the General Tax Code treats dividends, interest, arrears and all other products of shares and similar rights as income within its scope<\/a>, and Article 119 bis of the same Code provides that investment income covered by Articles 118, 119 and related provisions gives rise to a withholding tax (retenue \u00e0 la source) at the rate set by Article 187 when it benefits persons who do not have their tax domicile in France<\/a>. In plain terms: the French company must normally withhold French tax on the interest it pays you abroad, file the corresponding return, and pay the Treasury \u2014 and your country of residence, under its tax treaty with France, may then grant a credit or a reduced rate. The company files these obligations through its usual tax account with the French tax authority (impots.gouv.fr, the portal of the Direction g\u00e9n\u00e9rale des finances publiques<\/a>), and the applicable treaty rate must be verified article by article before each payment, never assumed. Keep the withholding certificates: your foreign bank and your home tax return will both ask for them.<\/p>\n Companies go through bad years, and a foreign owner then faces three documented exits \u2014 waiver of the claim (abandon de cr\u00e9ance), set-off against amounts owed to the company (compensation), or conversion of the loan into capital (incorporation au capital). Each has precise consequences, and improvisation is punished.<\/p>\n A waiver means you forgive all or part of the debt. It immediately improves the company’s balance sheet, which can help it escape an equity shortfall, but French tax law scrutinises the motive: a waiver granted for commercial reasons follows one treatment, while a purely financial waiver to a subsidiary in difficulty follows another, with deductibility capped by reference to the negative net position and the holdings of other parties. The waiver must be explicit, written, dated and unconditional \u2014 an oral understanding or a silent accounting entry will be recharacterised. From abroad, sign a formal waiver letter stating the exact amount forgiven, whether interest is included, and the business reason, and have the company’s meeting acknowledge it. Note also that a waiver with a return-to-better-fortune clause (clause de retour \u00e0 meilleure fortune) \u2014 where the company promises to repay if profits return \u2014 is a hybrid instrument: it must be drafted as carefully as the original loan.<\/p>\n Set-off (compensation) applies when the flows run both ways \u2014 for instance, the company owes you 50,000 euros on your current account while you owe the company 50,000 euros for unpaid subscribed capital. Set-off extinguishes both debts up to the lower amount, but it requires debts that are certain, liquid and due, and it should be recorded in a signed set-off statement to survive an auditor’s or a liquidator’s review. Never operate a silent cross-cancellation in the bookkeeping without that paper: in insolvency, the liquidator re-examines every movement between the company and its insiders in the months before the opening.<\/p>\n Conversion into capital \u2014 subscribing new shares by setting off your claim against the subscription price (souscription par compensation de cr\u00e9ance) \u2014 turns the repayable loan into permanent equity. The mechanics are those of Part I: extraordinary meeting, auditor’s certificate confirming the claim is certain, liquid and due (certificat du commissaire aux comptes), filing through the INPI single portal, updated Kbis and BODACC notice. Conversion is often the cleanest rescue when the company is balance-sheet insolvent but operationally viable: it restores equity without cash, avoids a taxable waiver debate, and signals commitment to creditors.<\/p>\n Whatever the exit, one insolvency lesson from the Cour de cassation deserves attention. In a 2026 commercial ruling, the Court reviewed a case where a director had been condemned for insufficiency of assets and banned from managing after repaying, shortly before the collapse, advances on a shareholder current account and treasury advances granted by a related company. The Court recalled that a judgment condemning the director of a legal entity to bear all or part of the insufficiency of assets must specify how the fault found contributed to the insufficiency of assets, pursuant to Article L. 651-2 of the Commercial Code<\/a> \u2014 and it quashed the appeal ruling precisely because the judges had not explained how repayments that paid genuine company debts were contrary to the company’s interest: without specifying how these withdrawals, which were intended to pay the debts of the company, were contrary to its interests, the court of appeal did not give its decision a legal basis<\/a> (Cass. com., 20 May 2026, appeal no. 25-14.635). The underlying statute is worth quoting directly: where the judicial liquidation of a legal entity reveals an insufficiency of assets, the court may, where a management fault contributed to that insufficiency, order that all or part of the shortfall be borne by all or some of the de jure or de facto directors who contributed to the fault<\/a>. For a foreign director, the practical reading is balanced: repaying your own current account while the company is already unable to pay its debts can be challenged as a fault or as a preference, especially if other creditors go unpaid \u2014 yet repayment of a genuine, documented debt is not automatically a fault, and judges must demonstrate the harm. The protection lies in timing and paperwork: repay in the ordinary course while the company is solvent, document the solvency (recent accounts, cash position), and once difficulties appear, stop favouring yourself and take advice before any movement.<\/p>\n Foreign founders entering France often start with the incorporation mechanics \u2014 company form, bank account, Kbis \u2014 covered in our general guide to setting up a company in France as a foreign founder<\/a>. Funding is the next layer of the same building: capital for permanence, documented shareholder loans for flexibility, interest within the statutory ceilings, withholding handled at payment, and, when trouble comes, a formal waiver, set-off or conversion rather than a silent arrangement. Managed that way from abroad, with the agreement, the minutes and the certificates kept in one file, your money remains recoverable, deductible and defensible.<\/p>\n A foreign owner can fund a French SARL or SAS cleanly from abroad, provided each euro is labelled at the moment it crosses the border. Capital increases give the company permanent strength but return only through dividends or a formal reduction, voted by the extraordinary meeting, certified by the depositary, filed through the INPI single portal and recorded on the Kbis. Shareholder loans give flexibility \u2014 repayable on simple demand absent a blocking clause, as the Cour de cassation confirmed in February 2025 \u2014 but they demand a written agreement, a regulated-agreements report where required, interest within the Article 39 ceiling on fully paid-up capital, and withholding tax when the lender lives outside France. When repayment becomes impossible, the exits exist \u2014 express waiver, documented set-off, conversion into capital \u2014 and the May 2026 ruling reminds directors that repaying a genuine debt is not in itself a fault, while payments favouring insiders once insolvency looms will be dissected euro by euro. Keep the chain of proof complete \u2014 minutes, loan agreement, wire slips, withholding certificates, updated Kbis \u2014 and have each cross-border movement reviewed before it is made, not after the auditor or the liquidator asks about it.<\/p>\n Telephone consultation within 48 hours with a lawyer of the firm: telephone consultation 80 EUR TTC, first analysis 80 EUR TTC. Call +33 6 46 60 58 22<\/a>.<\/p>\nB. How does a shareholder loan (compte courant d’associ\u00e9) work when the owner lives abroad?<\/h3>\n
II. How Do You Get Your Money Back From France and Pay the Right Tax?<\/h2>\n
A. When can you demand repayment of your shareholder loan, and how is the interest taxed?<\/h3>\n
B. What happens when the company cannot repay: waiver, set-off or conversion into capital?<\/h3>\n
Conclusion<\/h2>\n
Need a quick opinion on your case<\/h2>\n