Shareholder Loans in France: How Foreign Owners Fund a French Company
Shareholder loans in France are one of the simplest ways for a foreign owner to fund a French company. You lend money to the company through a shareholder current account (compte courant d’associé), and the company repays you later. It is flexible, but the tax rules limit how much interest the company can deduct.
This guide explains how these loans work, what interest you can charge and which points need attention when the lender lives abroad.
In brief
- A shareholder loan is a flexible way to fund a French company.
- The maximum deductible rate was 4.40% to 4.45% in the last quarter of 2026.
- The share capital must be fully paid up for interest to be deductible.
How Shareholder Loans in France Work
A shareholder current account records money that the company owes to a shareholder. As Bpifrance explains, this can be cash you deposit voluntarily. It can also be sums you leave in the company, such as unpaid dividends, salary or expenses.
In other words, the balance appears as a debt in the company’s accounts. You therefore keep a claim against the company, and it can pay you interest if you agree.
Shareholder Loan or Capital Increase?
| Point | Shareholder loan | Capital increase |
|---|---|---|
| Formalities | Light | Heavier, with filings |
| Getting the money back | Repayment of a debt | Difficult without a formal procedure |
| Return | Interest, within limits | Dividends, if there are profits |
| Effect on balance sheet | Adds to debt | Strengthens equity |
A loan suits short-term or uncertain needs. On the other hand, banks and partners often prefer stronger equity, so a mix can be useful.
Interest Limits on Shareholder Loans in France
Interest is deductible for the company only under certain conditions. First, the company’s share capital must be fully paid up. Second, the interest rate cannot exceed a maximum set each quarter, which depends on the year-end date.
| Financial year ending | Maximum deductible rate |
|---|---|
| 30 September to 30 October 2026 | 4.40% |
| 31 October to 29 November 2026 | 4.43% |
| 30 November to 30 December 2026 | 4.45% |
For example, interest above the limit is not lost for you, but the company adds it back to its taxable profit. For related companies, further rules apply. A group lender may be able to justify a market rate above this limit, while limits on total debt can also reduce the deduction. Consequently, group loans deserve specific advice.
Tax on Shareholder Loans in France for Foreign Lenders
Interest paid to a lender abroad is generally not subject to French withholding tax, although payments to non-cooperative countries face stricter rules. The lender normally declares the interest in their country of residence. However, check this against the relevant tax treaty and your home rules.
Money you lend and later receive back is a repayment, so it is not income. However, you must be able to prove it. Therefore, keep bank records showing each transfer from the start.
Document Your Shareholder Loan Properly
A written agreement is not always legally required, but it is highly advisable. It should cover:
- the amount and the date of the funds;
- the interest rate and when interest is paid;
- the repayment terms, including any notice period;
- whether the money stays blocked for a period.
Without clear terms, a shareholder can generally ask for repayment at any time. As a result, this can create a cash shock for the company. A bank may also ask you to block the account as a condition of a loan. In addition, company law may require approval when a loan involves a director or a major shareholder.
Risks to Watch With Shareholder Loans in France
- Insolvency. You rank as an ordinary creditor, so you could lose the money.
- A negative balance. Individuals generally cannot borrow from their own company in this way.
- Unpaid-up capital. This blocks the interest deduction.
- Waiving the debt. Writing off a loan has tax consequences for the company.
- Currency. Exchange movements can change the real value of your loan.
Thinking about structure as well? Our comparison of a branch vs subsidiary in France explains how funding differs. You can also read about registering a company in France.
Frequently Asked Questions
Can a non-resident make shareholder loans in France?
Yes. A foreign individual or company that holds shares can lend to the French company.
Must the loan carry interest?
Between an individual and a company, not necessarily. Group companies should review arm’s length rules first.
Can I repay myself whenever I want?
Generally yes, unless your agreement says otherwise, but the company must be able to pay its other debts.
Fund Your French Company the Right Way
A good funding plan keeps your cash flexible and your deduction safe. ESCEC International helps foreign owners structure and document their French company finances, in English.
Thinking of lending to your French company?
Book a session with an ESCEC International expert to review your interest rate, your documents and your tax position.
This article gives general information as of November 2026 and does not replace advice on your specific situation.
