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Family holding company
Family holding company: reinvest your dividends before personal tax.
A company that holds your shares receives your business's dividends almost tax-free, reinvests them, and prepares a sale or a handover. It also has a cost, strict rules and, since 2026, a new tax. Here's the full picture.
What it makes possible
Four uses, each with its own rule.
A holding company that has owned at least 5% of a subsidiary for 2 years is taxed only on 5% of the dividends received (Articles 145 and 216 of the French Tax Code). On €100,000, tax applies to €5,000, i.e. €1,250.
Contributed to the holding company before the sale, your shares leave with no immediate capital gains tax. Since 2026: 70% reinvested within 3 years, held for 5 years, excluding property and financial activities (Article 150-0 B ter of the French Tax Code).
Give shares in the holding company rather than each asset. Split into bare ownership and usufruct, they leave you the income and the control. If the holding company actively runs the group, the Dutreil pact exempts 75% of their value (Article 787 B of the French Tax Code).
Above 95% ownership, tax consolidation adds up the profits and losses of the group companies: a single tax for the whole group (Article 223 A of the French Tax Code).
Passive or active
The difference that decides the handover.
| Passive holding company | Active holding company | |
|---|---|---|
| Role | Holds and collects | Runs group policy and controls its subsidiaries |
| Dutreil pact | Closed | Open: 75% of the value exempt |
| IFI | Real estate of subsidiaries is taxable | Shares that may qualify as business assets (Article 975 of the French Tax Code) |
| What needs to be proven | Nothing in particular | Service agreements, reports, group decisions |
Active status is proven by facts, year after year. It is built before a handover, never after.
Worked example
€200,000 in dividends: €60,300 more to reinvest each year.
A business owner holds 100% of his SAS, which pays him €200,000 in dividends a year. He wants to invest in property and unlisted funds.
Received directly, his dividends bear 31.4% in 2026 (Article 200 A of the French Tax Code): €62,800 goes before the first euro is invested. He is left with €137,200.
Contribute his shares to a holding company, which receives the dividends under the parent-subsidiary regime: corporation tax applies to only 5%, i.e. €10,000, taxed at 25%.
€2,500 in tax instead of €62,800. The holding company reinvests €197,500 a year, €60,300 more. The money stays in the holding company: it is there to invest, not for your personal spending.
The limits
What a holding company cannot do.
For financial years ending on or after 31 December 2026, a family-controlled holding company worth at least €5 million pays 20% a year on residences reserved for its shareholders, cars, boats, planes, wine or jewellery (Article 235 ter C of the French Tax Code). Cash and financial investments are excluded.
A holding company with no purpose other than tax can be set aside for abuse of law, with a penalty of 80% (Article L. 64 of the French Tax Procedures Code). Its decisions need to be documented.
The holding company's account is not yours: a personal expense is misuse of company assets (Articles L. 241-3 and L. 242-6 of the French Commercial Code). Money comes out as salary or dividends, taxed as such.
Simulators
Run the numbers with your own figures.
Frequently asked questions
What clients ask us.
At what point does a holding company become profitable?
Each €100,000 of dividends upstreamed to a holding company costs €1,250 in tax, against €31,400 received directly in 2026. Set against this, the holding company has accounting and running costs every year. We run the numbers from your actual dividends.
Is the parent-subsidiary regime automatic?
No: it applies by election, if the holding company owns at least 5% of the subsidiary's capital and keeps the shares for at least 2 years (Article 145 of the French Tax Code).
Can I live in a property owned by my holding company?
Best avoided. Rent-free or reduced-rent occupation is a taxable benefit and, since 2026, in a holding company worth at least €5 million with mainly passive income, this home bears an annual tax of 20% of its value (Article 235 ter C of the French Tax Code).
Holding company or SCI: what's the difference?
The SCI owns the building; it is in principle tax-transparent, and its rents are taxed in the partners' hands at the progressive scale plus 17.2% social charges. The holding company subject to corporation tax (25%) holds shares, including those of an SCI, and reinvests its profits without going through your personal income tax.
