Your French company has closed a profitable year and the money is sitting in the company bank account. You live in London, New York, Dubai or Singapore, you own 100 percent or a large block of the shares, and you want to take part of that profit home. In France, that simple wish goes through a strict sequence: the accounts must be approved, the shareholders must vote the dividend, the company must withhold French tax at source, and only then can you claim a lower treaty rate or a European exemption from abroad. Skip one step and the distribution can be reclassified as a fictitious dividend, the withholding can be applied at the full domestic rate, and the refund you expected can be delayed by a year. This guide explains the full chain in plain English for a foreign founder or foreign shareholder: what can be distributed, how to vote and pay the dividend while living outside France, what France withholds on dividends paid to non-residents, and how the European parent-subsidiary exemption and bilateral tax treaties reduce or refund that withholding. Every French acronym is explained on first use, every decisive rule is tied to the official text in force, and every step can be completed from abroad with the right paperwork.<\/p>\n
Under French company law, dividends are not decided by the director alone and they are not paid out of turnover or cash alone. They are voted by the shareholders in an annual meeting, after the yearly accounts have been approved and after the meeting has confirmed that distributable sums exist. Article L.232-12 of the Commercial Code states that rule in one sentence: \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> In English: after approval of the annual accounts and confirmation that distributable sums exist, the shareholders’ meeting (assembl\u00e9e g\u00e9n\u00e9rale, usually shortened to AG) sets the portion paid out as dividends. The meeting can be held by videoconference or by written consultation if your articles of association (statuts) allow it, which is the normal setup for a foreign owner who cannot fly to Paris for a signature. What matters is the written minute, the approved balance sheet and profit-and-loss account attached to it, and a clear vote showing the amount distributed per share and the total.<\/p>\n The amount itself is governed by Article L.232-11 of the Commercial Code, which defines distributable profit as follows: \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 practice, you start from the profit of the financial year, subtract prior losses carried forward and the sums that must go to reserves by law or by your statuts, and add any retained earnings carried forward (report b\u00e9n\u00e9ficiaire) from earlier years. The same article adds two operational rules that foreign owners often discover too late. First, the meeting may also distribute sums taken from reserves that it is entitled to use, but the decision must state expressly from which reserve line the money is taken. Second, no distribution is allowed when equity would fall below the share capital plus the non-distributable reserves: \u201cHors le cas de r\u00e9duction du capital, aucune distribution ne peut \u00eatre faite aux actionnaires lorsque les capitaux propres sont ou deviendraient \u00e0 la suite de celle-ci inf\u00e9rieurs au montant du capital augment\u00e9 des r\u00e9serves que la loi ou les statuts ne permettent pas de distribuer.\u201d<\/a> Your accountant (expert-comptable) checks this ratio before any vote, because the Kbis \u2014 the official company registration certificate issued through the commercial court registry (greffe du tribunal de commerce) \u2014 does not protect a distribution that breaks this floor.<\/p>\n A concrete example helps. Suppose your SAS (soci\u00e9t\u00e9 par actions simplifi\u00e9e, the flexible joint-stock company most foreign founders choose) closes the year with 120,000 euros of accounting profit, 10,000 euros of prior losses still carried forward, and a legal reserve top-up of 5,000 euros required that year. The distributable profit of the year is 120,000 minus 10,000 minus 5,000, which is 105,000 euros, plus any retained earnings from prior years. Corporate income tax \u2014 imp\u00f4t sur les soci\u00e9t\u00e9s, shortened to IS \u2014 has already been charged on the taxable profit at the standard rate, and the current standard rate is set by Article 219 of the General Tax Code: \u201cLe taux normal de l’imp\u00f4t est fix\u00e9 \u00e0 25 %.\u201d<\/a> So a company with 140,000 euros of taxable profit pays roughly 35,000 euros of IS before anything can be distributed, and the dividend can only come from the after-tax remainder plus eligible reserves. If you distribute more than the law allows, the same Article L.232-12 issues a blunt warning: \u201cTout dividende distribu\u00e9 en violation des r\u00e8gles ci-dessus \u00e9nonc\u00e9es est un dividende fictif.\u201d<\/a> A fictitious dividend (dividende fictif) can be clawed back from the shareholders who received it, and directors who organised it face civil and in serious cases criminal exposure. That is why the order is never reversed: approve, confirm the distributable base in writing, then vote.<\/p>\n Two confusions cause most accidents for foreign owners. The first is mixing the dividend with the shareholder current account (compte courant d’associ\u00e9), which is the loan-like account through which a shareholder lends money to the company or leaves sums at its disposal. Repaying that account is not a dividend, and voting a dividend does not repay that account. The second is mixing the dividend with monthly transfers the founder calls a salary or management fee. Only the voted dividend follows the dividend regime; everything else follows its own payroll or service-invoice regime and its own social charges through URSSAF, the social security collection agency. If you already put your choice of vehicle in place \u2014 SAS, SARL (soci\u00e9t\u00e9 \u00e0 responsabilit\u00e9 limit\u00e9e, the limited liability company with stricter statutory framing), branch (succursale) or subsidiary (filiale) \u2014 the companion guide on choosing that vehicle explains which form distributes most simply for a non-resident owner: choosing between a SAS, a SARL, a branch and a subsidiary in France as a foreign founder<\/a>. Once the vehicle exists, the dividend rules described here apply in the same way, with the branch variation noted below.<\/p>\n Before the vote, ask your accountant for three documents: the draft annual accounts with the proposed allocation of profit (affectation du r\u00e9sultat), a one-page distributable-profit computation showing prior losses, legal and statutory reserves and retained earnings, and the current equity-to-capital check. If the company carries a large report \u00e0 nouveau (retained earnings) or a available reserve such as an extraordinary reserve your earlier meetings built up, the vote can combine the profit of the year with a draw on those lines, provided the minute names them expressly. If the company instead carries losses that wipe out the distributable base, no dividend can be voted that year even if the bank balance looks comfortable. Cash is not profit, and French courts look at the balance sheet, not the bank statement. The official company-life portal explains the publication and filing side of these yearly decisions in plain terms (see the service-public.fr pages on approving accounts and the INPI single filing portal, guichet unique, which has replaced the old direct filings at the greffe for most company filings): service-public.fr on the approval of company accounts<\/a> and INPI single portal for company filings<\/a>. Keep the minute, the accounts and the computation together: the tax administration and any future buyer will ask for exactly that bundle.<\/p>\n The vote itself is an ordinary or extraordinary shareholders’ decision depending on what your statuts say about the allocation of profit; in most SAS structures used by foreign founders, the yearly allocation is an ordinary decision taken on first notice with the majority your statuts define. From abroad, three mechanics work in practice. The first is a videoconference meeting with a signed attendance sheet and a minute countersigned electronically. The second is a written consultation (consultation \u00e9crite) where each shareholder signs the text of the resolutions and returns it by email with an advanced electronic signature, followed by the originals sent by courier to the registered office (si\u00e8ge social). The third, for single-shareholder SASU or EURL structures, is a sole-shareholder decision (d\u00e9cision de l’associ\u00e9 unique) signed by you alone. All three are valid if your statuts allow them, and the choice should be written into your statuts at incorporation rather than improvised the week the dividend is needed. The minute must show the company name and registration number (SIREN, the nine-digit company identifier issued at registration), the date, the exact text of the approved accounts, the distributable base, the dividend per share, the total distributed, the payment date and the reserve lines used. Attach the approved accounts. Have the minute and the accounts filed through the INPI single portal so the greffe records the yearly filing; late filing draws fines and, more importantly for a foreign owner, signals disorder to banks and buyers.<\/p>\n Timing is governed by a short article that many founders overlook. Article L.232-13 of the Commercial Code provides: \u201cLes modalit\u00e9s de mise en paiement des dividendes vot\u00e9s par l’assembl\u00e9e g\u00e9n\u00e9rale sont fix\u00e9es par elle ou, \u00e0 d\u00e9faut, par le conseil d’administration, le directoire ou les g\u00e9rants, selon le cas. Toutefois, la 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> The meeting therefore sets the payment mechanics \u2014 bank transfer to the shareholder’s declared account, cheque, or set-off against a documented debt \u2014 and payment must occur within nine months after the financial year-end, unless a court extends the period. For a 31 December year-end, that means payment by 30 September of the following year. In practice, foreign shareholders align this vote with the corporate tax return (relev\u00e9 de solde IS) and the accountant’s summer closing so the cash movement, the withholding computation and the tax filing all describe the same event. Interim dividends (acomptes sur dividendes) are possible before the year-end accounts are approved, but only on the basis of an interim balance sheet certified by the statutory auditor (commissaire aux comptes) when the company has one, and capped at the interim profit as Article L.232-12 describes. Most small foreign-owned SAS companies have no statutory auditor and should avoid interim dividends entirely: one missing certification is enough to turn the advance into an unlawful distribution.<\/p>\n Paying from abroad adds three practical layers. First, the bank: a transfer from the French company account to your personal or holding-company account abroad must carry the exact label \u201cdividendes exercice\u201d plus the year, because your home-country bank and tax authority will ask what the transfer is, and the French paying agent needs the same label to match the withholding slip. Keep the foreign-exchange slip. Second, identity and residence proof: your bank, your accountant and the French tax office each need a current proof of your non-resident status \u2014 passport, foreign tax residence certificate for the year of payment, and, where a treaty reduction is claimed at source, the treaty residence form discussed in Part II. Third, language: minutes can be bilingual, but the French version governs before the greffe and the tax administration. If you sign in English only, add a certified French translation before filing. None of these steps requires a trip to France. A videoconference vote, an electronic signature that meets the eIDAS qualified standard, a couriered original for the company books (registre des d\u00e9cisions), and an online filing through the INPI portal complete the chain. The company books stay at the registered office address in France \u2014 your domiciliation provider (the company that rents you the registered-office address, called domiciliation) keeps them available for inspection. Announce the payment to your home-country adviser the same week: the dividend is taxable in your country of residence under its own rules, with the French withholding credited or refunded under the applicable treaty, and late reporting at home creates penalties that no French exemption can cure.<\/p>\n A final documentation warning for groups: when the French company is owned by a foreign holding company, the dividend sometimes travels up through a chain \u2014 French subsidiary to Dutch or Luxembourg holding to ultimate parent \u2014 and each link must show board approval, a distribution resolution and a bank trace. French auditors and treaty partners look through chains without substance, and a dividend paid to a mailbox company with no staff, no premises and no decision-making can lose both the European exemption and the treaty rate. Keep the chain short, keep each company’s minute, and keep the bank statements showing the money moving from the French ISIN-paying account to the declared shareholder account. The official tax portal describes the declaration circuit for distributions in practical terms for the paying company (see the impots.gouv.fr professional pages on dividends and withholding and the BOFiP, the tax administration’s official published commentary, for the current forms and filing channel): impots.gouv.fr professional section on company tax filings<\/a> and BOFiP official tax commentary<\/a>. With the vote clean and the money traceable, the second question becomes purely fiscal: how much France keeps at source.<\/p>\n France taxes dividends paid to non-residents by withholding at source (retenue \u00e0 la source) before the money reaches you. The charging provision is paragraph 2 of Article 119 bis of the General Tax Code: \u201cLes produits vis\u00e9s aux articles 108 \u00e0 117 bis donnent lieu \u00e0 l’application d’une retenue \u00e0 la source dont le taux est fix\u00e9 par l’article 187 lorsque leurs b\u00e9n\u00e9ficiaires effectifs sont des personnes qui n’ont pas leur domicile fiscal ou leur si\u00e8ge en France\u201d<\/a>. In short, dividends covered by Articles 108 to 117 bis distributed to beneficial owners who are not French tax residents suffer withholding at the rate set by Article 187. The French paying company \u2014 or the financial institution that pays on its behalf \u2014 is the withholding agent: it deducts the tax, pays you the net amount, and remits the withholding to the French Treasury with declaration 2777-D through the online tax channel. You receive a withholding slip (called an attestation de retenue) showing the gross dividend, the rate applied and the amount remitted. Keep it: it is the proof your home country and any reclaim both require.<\/p>\n The domestic rate depends on who you are. For corporate and similar beneficiaries, Article 187 points to the standard corporate tax rate: \u201cCelui pr\u00e9vu au deuxi\u00e8me alin\u00e9a du I de l’article 219 pour tous les autres revenus.\u201d<\/a> Combined with the 25 percent standard IS rate quoted above, that means a dividend paid to a foreign company is in principle withheld at 25 percent. For individual beneficiaries, the same Article 187 sets a distinct domestic rate: \u201c12,8 % pour les b\u00e9n\u00e9ficiaires personnes physiques.\u201d<\/a> A dividend of 80,000 euros paid to a non-resident individual therefore suffers 10,240 euros of French withholding at the domestic rate, leaving 69,760 euros transferred, before any treaty reduction. By contrast, dividends paid to French-resident individuals go through a different domestic mechanism \u2014 a 12.8 percent upfront levy (pr\u00e9l\u00e8vement) collected by the payer, described by Article 117 quater: \u201cLes personnes physiques fiscalement domicili\u00e9es en France au sens de l’article 4 B qui b\u00e9n\u00e9ficient de revenus distribu\u00e9s mentionn\u00e9s aux articles 108 \u00e0 117 bis et 120 \u00e0 123 bis sont assujetties \u00e0 un pr\u00e9l\u00e8vement au taux de 12,8 %.\u201d<\/a> The parallel wording confuses many foreign shareholders, so keep the distinction clear: the 12.8 percent prelevement of Article 117 quater applies to French residents as an advance on their personal income tax, while your dividend as a non-resident falls under the 119 bis withholding, at 12.8 percent for individuals and at the IS rate for companies unless an exemption or treaty says otherwise.<\/p>\n Two related charges complete the picture and must not be mixed with the withholding. First, interest-like income on shareholder current accounts (the compte courant d’associ\u00e9 mentioned in Part I) follows the interest regime, whose payer-side levy for French-resident individuals is described by Article 125 A: \u201cLes personnes physiques fiscalement domicili\u00e9es en France au sens de l’article 4 B qui b\u00e9n\u00e9ficient d’int\u00e9r\u00eats, arr\u00e9rages et produits de toute nature de fonds d’Etat, obligations, titres participatifs, bons et autres titres de cr\u00e9ances, d\u00e9p\u00f4ts, cautionnements et comptes courants [\u2026] sont assujetties \u00e0 un pr\u00e9l\u00e8vement lorsque la personne qui assure le paiement de ces revenus est \u00e9tablie en France\u201d<\/a>. If you leave money in your current account and the company pays you interest, that interest is not a dividend and follows this separate track. Second, dividends distributed by a French company remain part of a result already taxed at IS at 25 percent, so the overall burden on a distributed euro combines IS at company level with withholding at shareholder level, softened only by the exemption or treaty of Part II.B. Work the combined arithmetic before voting: on 100,000 euros of pre-tax profit, IS takes about 25,000, leaving 75,000 distributable; a 25 percent withholding on the 75,000 takes another 18,750, leaving 56,250 in hand; a 15 percent treaty rate instead leaves 63,750; a full European parent exemption leaves the whole 75,000. The vote in Part I decides the 75,000; this Part decides how much of it survives the border.<\/p>\n Deadlines and proof from abroad follow a fixed rhythm. The withholding is declared and paid by the payer in the month after payment through the 2777-D channel; the shareholder’s reclaim, if tax was over-withheld relative to the treaty, runs on a separate timetable through the foreign-tax-residence forms and the French non-resident tax office (Service des imp\u00f4ts des particuliers non-r\u00e9sidents, SIPNR). Practical tip: request your foreign tax residence certificate for the year of payment early \u2014 some countries issue it only after the local return is filed \u2014 and ask the French payer for the withholding attestation within days of the transfer, not months later. Banks merge, accountants rotate staff, and reconstructing a two-year-old slip from abroad is slow. If the dividend goes to a branch structure rather than a subsidiary, warn your adviser: profits of a French branch of a foreign company can face a specific branch levy on deemed distributed earnings, with its own treaty analysis, so the subsidiary-versus-branch choice made at incorporation keeps echoing at distribution time.<\/p>\nB. How to vote, document and pay the dividend while living outside France<\/h3>\n
II. How French withholding hits foreign shareholders and how to reduce or reclaim it<\/h2>\n
A. What France withholds at source on dividends paid to non-residents<\/h3>\n
B. How to pay less lawfully from abroad: European parent exemption, treaty caps and the reclaim file<\/h3>\n