{"id":6889,"date":"2026-10-23T14:00:11","date_gmt":"2026-10-23T12:00:11","guid":{"rendered":"https:\/\/balmontconseil.com\/blog\/diriger-sa-societe-francaise-depuis-l-etranger-siege-et-etablissement-stable\/"},"modified":"2026-10-23T14:00:11","modified_gmt":"2026-10-23T12:00:11","slug":"diriger-sa-societe-francaise-depuis-l-etranger-siege-et-etablissement-stable","status":"publish","type":"post","link":"https:\/\/balmontconseil.com\/en\/blog\/diriger-sa-societe-francaise-depuis-l-etranger-siege-et-etablissement-stable\/","title":{"rendered":"Managing your French company from abroad: registered office, permanent establishment and effects on the manager"},"content":{"rendered":"
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In summary\u2026<\/h2>\n

Yes, you can manage your French company from abroad: it remains a French company, subject to corporate income tax (IS) in France on its French activities, whether its director lives in Lyon or Singapore. What changes is the risk in the host country, which may see it as a seat of effective management<\/b> or a permanent establishment<\/b>.<\/p>\n

Our position: the departure of the leader costs the company nothing in France, but it can cost it elsewhere if governance is not organized before the departure. The relevant question is not "Do I have the right to leave?", but "Where are the decisions actually made and where are the contracts signed?".<\/p>\n<\/div>\n

\u00abI\u2019m staying on as president of my SAS (simplified joint-stock company), I\u2019m working from home, the company doesn\u2019t change, does it?\u00bb We hear this from Lyon-based business leaders who leave without selling their companies. The answer has two parts: for France, almost nothing changes; for the country where you relocate, everything depends on where you make the decisions and where you sign the contracts.<\/p>\n

1. In France, corporate income tax remains unchanged; it is the tax on dividends that is changing.<\/strong><\/h2>\n

Corporate income tax is based on the company's operations, not the residence of its director.<\/strong><\/h3>\n

French corporate income tax is territorial: it taxes the profits of companies operating in France. Profits from a business actually located abroad are excluded, and a sustainable and technically self-sufficient construction project abroad is considered a business outside France. Conversely, a company whose activity is in France pays corporate income tax there, regardless of where its president resides.<\/p>\n

The departure of the manager, however, changes the tax on what he receives from the company, particularly dividends (see withholding tax on dividends paid to a non-resident<\/a>).<\/p>\n

Worked example<\/strong><\/h3>\n

Situation.<\/strong> Head of a Lyon-based SAS (simplified joint-stock company) whose activity is exclusively French. Profit for the year: \u20ac300,000. He moves abroad and remains president.<\/p>\n

Issue.<\/strong> He believes that his departure also reduces the company's tax burden.<\/p>\n

Strategy.<\/strong> We separate the two levels: the company's corporate income tax on one side, and the manager's dividend on the other.<\/p>\n

Result.<\/strong> Company's IS: 15 % on the first \u20ac42,500 (\u20ac6,375) then 25 % on \u20ac257,500 (\u20ac64,375), i.e. \u20ac70,750<\/b>, identical before and after departure. On a dividend of \u20ac100,000: \u20ac31,400 to the single flat-rate levy of 31.4 % if he remains a resident; \u20ac12,800 withholding tax of 12.8 % if he is a non-resident, i.e. \u20ac18,600 difference before the tax possibly due in his host country.<\/p>\n

Hypotheses.<\/strong> SAS meeting the conditions for the reduced IS rate (turnover of 10 million euros at most, fully paid-up capital, at least 75 % of the capital held by natural persons), natural person shareholder, no more favorable agreement, single flat-rate levy of 31.4 % without option for the scale (12.8 % of income tax and 18.6 % of social levies). Illustrative example, calculated using the rules in force on 23\/10\/2026.<\/em><\/p>\n

For the technician.<\/strong> Article 209 I of the French General Tax Code (CGI): principle of territoriality. BOFiP BOI-IS-CHAMP-60-10-10 (version of 27\/06\/2014), no. 50: profits from operations located outside France of a company whose registered office is in France are exempt from French tax; no. 150: a sustainable and technically self-sufficient construction project abroad is considered a business operated outside France. Withholding tax on dividends: Articles 119 bis 2 and 187 of the CGI.<\/p>\n

2. The real risk lies in the host country<\/strong><\/h2>\n

Place of effective management and permanent establishment: two concepts, two risks<\/strong><\/h3>\n

The seat of effective management<\/b> This designates the place where management and industrial or commercial policy decisions necessary for conducting business are made, normally where the highest-ranking body decides. A company may have several places of management, but only one place of effective management, and this is a matter of fact. In the 2018 Franco-Luxembourg convention, this is the sole criterion that distinguishes a company considered resident in both states.<\/p>\n

L'\u2019permanent establishment<\/b> is the taxable presence of a company in another State. The Franco-Luxembourg convention defines it as a fixed place of business through which an enterprise carries out all or part of its business, or as the presence of a dependent agent, that is to say a person who habitually concludes contracts for the enterprise.<\/p>\n

Specifically.<\/strong> The two situations we first examine in the case of a departing executive are: signing company contracts from abroad, and using a room in their home as a company office. These situations require a detailed analysis of the facts, agreement by agreement. This is precisely why preparations are made before departure.<\/p>\n\n\n\n\n\n\n\n\n
What you do from abroad<\/th>\nConcept in question<\/th>\nWhat we check<\/th>\n<\/tr>\n<\/thead>\n
You make strategic decisions via videoconference from your home.<\/td>\nEffective management seat<\/td>\nLocation of key meetings, date and signing of minutes<\/td>\n<\/tr>\n
You negotiate and sign customer contracts<\/td>\nDependent agent<\/td>\nWho concludes the contract, on whose behalf, and with what written delegation of authority?<\/td>\n<\/tr>\n
A room in your home serves as the company's office.<\/td>\nFixed business installation<\/td>\nProvision, usual use, possible rebilling<\/td>\n<\/tr>\n
You supervise, the team in France decides and signs<\/td>\nLower risk, to be documented<\/td>\nDelegations of power and decisions traced in France<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

These definitions are those of a specific convention. Each convention has its own wording, and in the absence of a convention, the domestic law of the host country applies: the analysis is done country by country, based on the regulations of its tax administration. The list of conventions is available here: tax treaties signed by France<\/a>.<\/p>\n

For the technician.<\/strong> France-Luxembourg Convention of 20 March 2018: Article 4 \u00a7 3 (place of effective management, sole criterion in case of dual residence), commented on in BOFiP BOI-INT-CVB-LUX-10 (version of 23\/02\/2021), No. 150; Article 5 (permanent establishment: fixed place of business and dependent agent), commented on in BOFiP BOI-INT-CVB-LUX-20 (version of 23\/02\/2021), Nos. 30 and 70. These definitions are specific to this convention.<\/p>\n

3. For the leader himself: four consequences not to be confused<\/strong><\/h2>\n