Acquisition holding company: buying a company through a holding company

A holding company is a company you create to acquire a business. It borrows money, buys the target company, and then repays its debt with the dividends paid by the target. The loan interest is tax-deductible for the holding company, and the dividends it receives benefit from the parent-subsidiary regime.

The arrangement is based on debt. Bpifrance Création describes it as "vulnerable by nature".

This page does not provide any loan rates: financing is arranged through our banking partners. It does not cover the holding company or the details of the Dutreil agreement, which are covered on their own pages.

The assembly in five steps

1. The buyer creates a holding company.
2. The holding company borrows from a bank, or from a venture capital firm.
3. It buys the target company.
4. The target company pays it dividends.
5. The holding company is repaying its debt with these dividends.

What the edit brings

Which legal form to choose

Bpifrance Création presents the SAS (simplified joint-stock company) as the most popular structure for a holding company used for business acquisitions. The SARL (limited liability company) is possible, but more rigid. The civil law company is generally unsuitable when the objective is to acquire a commercial company. Drafting the articles of association for an SAS is a technical process: Bpifrance advises entrusting this task to a lawyer.

The taxation of the holding company

Loan interest

Interest payments are deductible from the holding company's taxable income, within certain limits. For a company that is not part of a tax group, the BOFiP (French Official Tax Bulletin) sets a ceiling: the higher of 30 million euros of taxable income before interest, taxes, depreciation, and amortization, and 3 million euros of net financial expenses. Expenses not deducted can be carried forward; the details of this carryforward are not discussed here.

If the holding company becomes a member of a tax group, this rule does not apply as such: to be examined with your figures.

The Charasse Amendment

In a tax group, when shares of a group company are purchased from individuals who control the group, directly or indirectly, a portion of the deducted financial expenses is added back to the consolidated profit. For acquisitions made on or after January 1, 2007, this add-back ends at the end of the eighth fiscal year following the year of the acquisition. It should be examined whether the seller controls the group.

Dividends repatriated: parent-subsidiary or tax consolidation

According to Bpifrance Création, under tax consolidation, the holding company is solely liable for the group's corporate income tax, and the loss created by financial expenses is offset against the target company's profit. The duration of this option should be verified.

The corporate tax rate

The normal rate is 25 %. A rate of 15 % applies to the first 42,500 euros of profit, under the following conditions: turnover of no more than 10 million euros, fully paid-up capital and held at least 75 % by natural persons.

A tax of 20 % on the financial assets of asset holding companies

The tax guide on the 2026 changes mentions a 20% tax on the financial assets of asset-holding companies (Finance Law for 2026, Article 7; Article 235 ter C of the French General Tax Code), payable for fiscal years ending on or after December 31, 2026. The guide does not define financial assets, thresholds, or exclusions. The exact scope should be verified in Article 235 ter C of the French General Tax Code to determine if a holding company is affected. This should be reviewed before the holding company is created.

Funding the recovery

Orders of magnitude of Bpifrance Creation:

• Personal contributions cover on average 30 % of investment needs; ;
• The bank loan for repurchase is generally for seven years and does not cover more than 70% of the purchase price; ;
• the staggered payment of part of the price by the seller (seller credit) can cover a maximum of 50 % of the price; ;
• France Active can cover up to 80% of the amount borrowed, subject to conditions; the Bpifrance transfer loan ranges from 40,000 to 5,000,000 euros.

Loan terms depend on your application. Balmont Conseil will put you in touch with its banking partners.

You already hold shares in the target company, or you are taking over as a family member.

Contribution of securities. If you contribute securities you already own to your holding company, the tax deferral under Article 150-0 B ter may apply. This deferral requires, in particular, that the company receiving the contribution be subject to corporate income tax and controlled by the contributor, and that any cash payment not exceed 10% of the nominal value of the securities received. The rules for reinvesting proceeds from the sale of these securities have been amended for sales of contributed securities made on or after February 21, 2026 (see dedicated page).

Family buy-out. Bpifrance Création describes the "family buy-out": the acquiring heir receives the shares through a gift-partition, pays compensation to their co-heirs, contributes the shares to a holding company which borrows to finance it, and then repays the loan with dividends. The Dutreil agreement can be combined with this. It exempts from gift tax up to 75% of the share value (Article 787 B of the French General Tax Code). It requires a collective commitment to retain the shares for at least two years, an individual commitment extended from four to six years for transfers occurring on or after February 21, 2026 (Law No. 2026-103, Article 8), and a management position held during the collective commitment period and for three years following the transfer date.

For the contribution of securities to a holding company, the BOFiP (French Official Tax Bulletin) sets out the following conditions: at least three-quarters of the holding company's share capital and voting rights must be held by the individuals subject to the commitments, the company must have gross assets comprising more than 50% of its shares in the company, and the holding company must be directly managed by one or more of these individuals (contributions made from January 1, 2019). These conditions should be examined in conjunction with the full text.

The formalities of the transfer

For a transfer of shares in a simplified joint-stock company (SAS), the registration fee is 0.1% of the price, with a minimum of €25, and is generally payable by the buyer (5% for a company whose assets consist primarily of real estate). The deed must be submitted for registration within one month of its signing.

For a transfer of more than 50% of the share capital of a simplified joint-stock company (SAS) or a single-member simplified joint-stock company (SASU), notification must be given no later than one month before signing (two months prior), starting July 27, 2026. The specific procedures depend on the company's workforce size and the existence of a works council (CSE): in an SAS with 50 or more employees and a works council, only the works council is informed and consulted. The law provides for exceptions, such as transfers to the spouse, an ascendant, or a descendant of the transferor. In case of non-compliance, damages can reach 0.5% of the sale price (previously 2% of the sale price). These rules apply to SAS and SASU companies; those applicable to a target company structured as a limited liability company (SARL) are not addressed here, nor are the registration fees on SARL shares.

The risks and the exit

A downturn in the economic climate or a decline in the target company's profitability could jeopardize repayment, and the debt could limit its investments for several years. The debt is structured so that dividends cover repayments while preserving operating needs.

At the end of the loan repayment period, between seven and ten years, the holding company can be merged with the target company, the most common solution according to Bpifrance Création.

Numerical example (fictitious profile)

Situation. Claire, 46, buys 100 % shares from SAS Verdier, an SME, for €2,000,000. She creates a holding company (SAS) in which she owns 51 % shares, with a partner owning 49 % shares.

Issue. The holding company's loan represents 70% of the purchase price, or €1,400,000, repaid over seven years. Assumptions: principal repaid linearly, i.e., €200,000 per year (interest not calculated: no rate is used); annual dividends from Verdier of €250,000; corporate tax of 25% (the reduced rate of 15% is not used); the remaining €600,000 of the purchase price is assumed to be covered by the holding company's equity, without further details. Claire wants to know if the dividends, after the holding company's tax has been paid, will cover the remaining principal.

Strategy. Compare the tax levied on the upstreaming of dividends in the parent-subsidiary regime (5 % of quota) and in tax consolidation (1 %), if the conditions of consolidation are met.

Result.

The difference is €2,500 per year. This calculation does not include loan interest, which is deductible within the limits described above; the holding company's actual tax liability depends on its expenses. The remaining amount must still cover the holding company's interest and expenses, which are not quantified: this example does not demonstrate that the structure is balanced. For €100 of dividends, the tax is €1.25 under the parent-subsidiary regime and €0.25 under the consolidated regime. The tax profile is hypothetical.

What changes depending on your situation

• The holding company structure and the distribution of its capital.
• The price and the borrowed amount, according to the bank and the file.
• The level of control of the target : 5 % for the parent-subsidiary regime, 95 % for tax consolidation.
• The seller's identity, with regard to the Charasse amendment.
• A family reunion, with or without a Dutreil agreement, and the date of the transfer.
• The nature of the holding company, with regard to the tax of 20 %.

The rule depends on your situation. No results are guaranteed.