France is a very appealing country from an investment point of view, as the growing number of foreign enterprisers coming to open companies here shows it. There are several types of companies
one can establish in France, among which the limited liability company (SARL) and the simplified joint-stock corporation (SAS) are the most employed. The same types of structures can be used to set up a holding company in France
. These are the best solutions for foreign large companies seeking to have established presences in France from a taxation point of view.
Characteristics of holding companies in France
| Quick Facts || |
| Legal entities used || |
Limited Liability Company,
|With the French Trade Registry |
|Around 2 weeks |
|Advantages || |
Fast incorporation, simple formalities
|Precautions || |
It must confirm share capital with bank statements
|Shareholding structure || |
|Minimum Capital || |
|Taxation ||26.5% corporate tax rate |
|Control ||Foreign ownership permitted |
|Accounting and Reporting ||General accounting rules, audits required |
|Number of double taxation treaties ||108 |
Just like other types of French companies
must comply with the requirements imposed by the French Company Law
. The only different aspect which needs to be considered when deciding to establish a holding company in France
is that it has other characteristics than trading companies.
Here is what one should know when setting up a French holding company:
the holding company has the role of a parent company which can have one or multiple subsidiaries;
the holding will always have a sufficient number of shares which guarantees it voting rights in the subsidiaries;
the holding can control a subsidiary’s policies and management decisions, however, it cannot complete day-to-day activities in it;
holding companies can own various types of assets, among which real estate, shares, and even intellectual property rights;
the holding company will hold limited liability in case of losses and debts registered by the subsidiaries.
Documents required to set up a holding company in France
The French holding company
only offers the possibility of owning shares in one or more companies, without carrying out any commercial operations. However, the registration process is the same as for any other type of company in France
. The holding company
must be registered with the French Trade Register
based on the following documents:
- the statutory documents, comprised of the Memorandum and Articles of Association,
- an application form;
- passport copies;
- bank statement confirming the deposit of the share capital.
It must be known that a holding company
registered under the form of a SARL
or SAS will be allowed to receive dividend payment and will have voting rights in the shareholders’ meetings. There several additional requirements when opening a holding company in France
under one of the form of a SARL company.
Requirements for French holding companies registered as SARL companies
Also, when reaching a total revenue of 3.1 million euros, the company must appoint an auditor.
You can read about the advantages of holding companies in France in the scheme below:
Holding company registration procedure in France
As seen above, the documents required for establishing a French holding company
are the same as for any other local company. The incorporation of the holding with the French Companies Register
is also the same, and the steps to be completed are the preparation of the documents (where documents provided by the owners are in a foreign language, they must be translated into French and notarized), the opening of the corporate bank account and deposit of the share capital, and the tax registration procedure with the tax authority in France
It is not mandatory for a holding company to obtain a VAT number or obtain any special business permit for operating.
It is also important to note that in terms of share capital requirements
, the Company Law provides for all joint stock companies to have a minimum share capital of 37,000 euros which must be deposited prior to the company registration. It is also required for joint stock companies
to have at least 7 shareholders and a minimum number of 3 directors.
Our company registration agents in France
can offer more information on the requirements related to incorporating a joint stock company with the purpose of creating a holding company
. We can also handle all the formalities on behalf of foreign investors
interested in setting up such a company here.
Taxation of French holding companies
One of the important aspects related to starting a holding company in France
is related to taxation
. It is useful to know that France allows for tax groups to be created in order for the holding and its subsidiaries to file a single tax return. This will also enable the holding to offset the losses of a subsidiary against the profits of another one. Then, the French corporate tax
which is levied at a rate of 33.33% on the aggregate income after the intra-group adjustments have been made.
There are also special rules which need to be considered upon the taxation of a holding company and the tax advantages it can obtain in France. Among these:
- at least 95% of the share capital in the foreign company must be held by the French company;
- the foreign company must pay the standard corporate income tax in its home country;
- the foreign company must be located in an EU or European Economic Area country.
It is also possible for the holding company to benefit from France’s double taxation treaties
if the country in which the holding company has a double tax agreement which contains a clause against tax evasion.
If you want to open a company in France and need assistance, our local advisors are at your disposal with information and assistance during the registration procedure. We can also handle the company registration procedure on your behalf if you do not want to come to France during this process.
Why open a holding company in France?
are the most tax-efficient structures in France
. Also, the shareholders of a holding company
will have limited liability related to the company’s debts and obligations. The holding must not have many employees, as it main role is to oversee its subsidiaries.
France is an appealing investment destination for all foreign investors, and according to statistics, France is a leading country in terms of foreign direct investments. It is also worth noting that:
- the Foreign Direct Investment (FDI) flow increased by 25% in 2018, reaching 37 billion USD;
- France’ total FDI stock at the level of 2018 stood at 824,9 billion USD;
- France ranks 32nd in the 2019 World Bank Doing Business Report;
- by 2022, the corporate tax will decrease progressively from 33.33% to 25%.
For more reasons on why you should open a holding company
, please feel free to contact
our company incorporation consultants in France