Slater and Gordon Lawyers can assist with the purchase and sale of property in France by companies. Call our specialist French Property Lawyers on freephone 0800 916 9083 or contact us online.

Shares in a company are considered to be movable property and the transfer of shares in a (French or English) company on the death of their owner is governed by the law of the deceased’s habitual residence.

If the owner lived in the UK, this was often used to avoid the potential problem of reserved rights of children who under French inheritance law automatically inherit a percentage of a deceased parent’s estate, no matter what is stated in the deceased’s Will.

The “statuts” (articles of association) provide for the transfer of shares and can be drafted to minimise the risk of having to share the property with strangers.

The main types of corporate structure traditionally used by UK buyers to acquire property in France are:

UK Company (limited liability)

Although it is possible to purchase through an English limited company, for example, it is not usually advisable. If a resale of the property is possible, there are tax disadvantages in the ownership of property in France by a non-resident company.

It is also possible that you would need to have the Memorandum and Articles of Association translated and a Certificat de Coutume prepared, resulting in considerable additional expense for the buyer.

Offshore company

From a fiscal point of view, it is rarely advantageous for most purchasers to buy via an offshore company which would be liable to 3% tax annually of the market value of the property owned in France. In addition, the company would pay French corporation tax (normally at a rate of 42%) on any rental income it obtains from the property and the property is likely to be regarded as a permanent establishment of the foreign company. It would therefore be liable to an annual corporation tax.

Société Civile Immobilière (SCI)

Most people purchasing through a company opt to form this type of company which has no direct equivalent in the UK. It is more akin to a partnership and could be described as a property-holding partnership which is non-trading, has unlimited liability and is usually fiscally transparent.

A SCI is not ideal if furnished letting is envisaged, as it would lose its transparency and become liable to corporation tax on any income derived from the furnished letting.

SNC / SARL

Should a letting activity be planned, a SNC (societe en nom collectif) or a SARL (limited liability company) structure may be suitable.

Offshore company

From a fiscal point of view, it is rarely advantageous for most purchasers to buy via an offshore company which would be liable to 3% tax annually of the market value of the property owned in France. In addition, the company would pay French corporation tax (normally at a rate of 42%) on any rental income it obtains from the property and the property is likely to be regarded as a permanent establishment of the foreign company. It would therefore be liable to an annual corporation tax.

How Can We Can Help

 

No matter which type of company you are considering, it’s vital to get expert legal advice. Our International Property Lawyers at Slater and Gordon can help you navigate the complexities of company property purchases in France. Call us on freephone 0800 916 9083 or contact us online.

Slater and Gordon Lawyers is one of the UK's largest and well known law firms with offices in London, Manchester, Watford, Liverpool, Chester, Birmingham, Sheffield, Cardiff, Edinburgh, Cambridge, Milton Keynes, Preston, Wakefield and Wrexham.