In summary…
Most leaders believe they have to choose: leave and give in, or stay. This is not the alternative. You can keep your company when you move abroad, provided you know what really moves.
And what is shifting is not taxation: it is the location where decisions are made. If the effective management follows the leader, the company becomes taxable in the host country without ceasing to be taxable here.
The issue is therefore one of governance: rebuilding a French operational management structure, separating ownership from management. Everything else comes later.
The question arises framed as a dilemma: "If I leave, do I have to sell?" No. The only question that matters is this, and nobody asks it: Who will lead, from where, and how will you prove it?
1. What you're actually taking with you: the effective management seat
A company doesn't follow its leader, except when it follows him.
A simplified joint-stock company (SAS) registered in Lyon remains so regardless of its president's residence. That's not the point. The point is that tax treaties resolve the conflict of companies' residences based on a factual criterion: the seat of effective management, The location is where management decisions are made. If the president decides alone from Lisbon, Dubai, or Geneva, this location is his home. The host country can then treat the company as its resident and tax it on its global results—and France is not giving up anything.
Specifically. It's not the registered office address that matters, it's the decisions. The trigger is never theoretical: an audit, a bank asking where the board is located, the local tax authorities discovering that a resident is running a company from their living room. The risk is not paying more in France, it's paying twice.
For the technician. Territoriality of corporate income tax: Article 209 I of the French General Tax Code (CGI) – profits earned by businesses operating in France, and those whose taxation is attributed to France by a tax treaty. The French tax jurisdiction does not cease solely due to the departure of the company director.
The determination of dual residence falls under the applicable convention: the OECD model historically uses the place of effective management, its recent versions use the amicable procedure.
2. The symmetrical risk: the permanent establishment
You don't need offices to create one
The other, more frequent risk is that the company ends up with a permanent establishment In the host country: a portion of its profit becomes taxable there without any changes to its articles of association. No branch is necessary — an office at the manager's home can suffice, and the person who usually concludes the contracts creates one on their own, without premises.
For the technician. OECD Model Tax Convention, Article 5: fixed place of business through which the activity is carried on, supplemented by the dependent agent clause referring to the party playing the principal role in concluding the contracts. The allocated profit must be determined and documented; the adjustment relates to closed financial years.
3. Owning is not controlling
The distinction that the law makes, and that leaders do not make
Holding French securities from abroad is neutral: a non-resident partner, even if 100% %, does not move anything, ownership is not a connecting factor. Leading from abroad changes everything. The whole solution lies in this gap, and it requires some unpleasant decisions: a present general manager, with real powers and paid according to his function — not a straw man; a collegial body meeting in France, whose minutes contain decisions and not ratifications; written and dated delegations.
Specifically. The proof is created on the day itself, not three years later. A council meeting held in Lyon, the minutes of which are signed in Lyon and which are corroborated by site visits, is worth more than any retrospective explanation. This is not a matter of formality: it is the only material available on the day of the dispute.
4. Dividends once you are no longer a resident
Withholding tax, and why the agreement doesn't always improve things
With the existing governance structure, cash repatriation becomes a technical issue. Dividends paid to a non-resident shareholder are subject to withholding tax levied by the company; the convention caps this rate, often at 15% for an individual, and the withholding tax generally entitles the shareholder to a tax credit in their country of residence.
Specifically. Counterintuitive and decisive: for an individual, the French internal rate is today lower to the usual contractual limit. Invoking the treaty to "reduce" the withholding tax is therefore pointless. The real issue lies elsewhere: the tax credit you receive in France, and the timing. A dividend voted on three weeks too early remains a dividend for a French resident.
For the technician. Withholding tax on income distributed to persons not having their tax domicile or registered office in France: Article 119 bis of the CGI, at the rates of Article 187 — rate specific to natural persons, rate aligned with corporation tax for legal persons, increased rate towards a non-cooperative State.
Article 4 bis of the French General Tax Code (CGI) applies to non-residents with French-source income. The negotiated rate requires proof of residence to be submitted in a timely manner: the company that deducts the tax bears the burden of proof.
5. Exit tax on securities that you do not sell
A tax calculated at the outset, very rarely paid at the outset
This is the point that makes people give up, wrongly. Transferring tax residence outside of France makes unrealized capital gains on securities held taxable, beyond thresholds relating to the value of the portfolio or the percentage of ownership: a tax on a sale that did not take place.
That's not the main point. One payment deferral Transfer is permitted: automatically to a European Union member state or a state bound to France by appropriate assistance agreements, and upon request and with guarantees elsewhere. Tax is waived if the securities are still held at the end of the holding period. Those who transfer without selling generally incur no out-of-pocket expenses.
For the technician. Article 167 bis of the CGI. Two points structure the file: the initial declaration, the omission of which results in the loss of the benefit of the deferral, and the annual monitoring, to be carried out without interruption throughout the entire retention period.
And the holding company?
Useful, but not for the reason attributed to it. Inserting it before departure doesn't eliminate the exit tax: it's the shares that are subject to it. And a holding company managed from abroad poses the same problem of effective management, only worse, since it has little substance to offer. It provides a separate layer of governance from operations, nothing more.
Three questions. If you hesitate on even one, the application is not ready.
Who, based in France, makes the management decisions for your company—and can demonstrate this over three fiscal years? From which country were your contracts negotiated last year? And if you were to leave next quarter, would your exit tax return be filed on time?
Our position
Selling to leave is almost always a flawed approach: you're handing over a working tool, triggering a real capital gain, and giving up recurring income—all to avoid a risk that can be mitigated through organization. Leaving without changing the governance structure is the only truly dangerous scenario.
There are cases where we advise doing nothing: a six-month departure, a partner who is no longer in charge. And others where we advise postponing the departure for three months, to allow time to appoint a new leader.
Are you preparing to leave while keeping your company, or have you already left without having addressed the issue?
The initial meeting is to establish your effective management structure and what needs to be rebuilt in France before departure. Forty-five minutes, no obligation.
You are a chartered accountant, notary, or fellow consultant And you're following up with a departing executive? These cases often get lost at the intersection of corporate law and international taxation. We work in partnership: the client remains yours, and we provide you with documented governance.
Book an appointment
Forty-five minutes to review your plan: what's covered, what isn't, what you're paying for twice. The report is written down and you're free to do it.
