French Holding Company Tax Advice | French Corporate Tax Optimisation

French Holding Company Tax Planning - Hayot Expertise#

Setting up a holding company (société holding) is one of the most powerful tools available to a French business owner for tax optimisation and wealth structuring. By grouping your shareholdings into a parent company, you unlock exceptional tax mechanisms: near-total exemption on inter-company dividends, cross-entity loss offsetting, leveraged acquisition financing and optimised succession planning. Hayot Expertise, based in Paris 8, guides you from the initial feasibility study through to the day-to-day management of your holding structure.

A holding structures your group; day to day, it works alongside our business tax advisory (corporate-tax and VAT calendar, audit defence) and director remuneration optimisation (salary versus dividends).

When your holding owns at least 5% of a subsidiary's capital for more than two years, the parent-subsidiary regime applies automatically:

• Dividends paid by the subsidiary to the holding are 95% exempt from French corporate tax (IS)
• Only a 5% add-back for costs and charges is included in the holding's taxable income
• Effective tax on those dividends is therefore 1.25% (5% × 25% IS rate) — near-total exemption
• Comparison: an individual receiving the same dividends directly would pay the 31.4% flat tax (12.8% income tax + 18.6% social charges, LFSS 2026)

Example: your subsidiary earns €200,000 profit after tax and pays €150,000 in dividends to your holding. Tax at the holding level: €150,000 × 5% × 25% = €1,875, versus €47,100 if you had received the dividend personally (31.4% flat tax). Saving: €45,225.

Read more: Everything you need to know about tax optimisation via a holding company

When the holding owns 95% or more of its subsidiaries' capital, it can elect for the tax consolidation regime (intégration fiscale):

• Profits and losses of all group entities are consolidated into a single IS return
• A loss-making subsidiary directly reduces the group's consolidated taxable profit
• The group benefits from the reduced 15% IS rate on the first €42,500 of consolidated profit (subject to conditions on paid-up capital and majority individual ownership)
• One consolidated 2065 return simplifies all filing obligations

There are two types of holding company with different tax treatments:

Active holding (holding animatrice)#

Actively involved in subsidiary management through service agreements, strategic direction and intra-group loans. Tax advantages:

• Eligible for the Dutreil transmission exemption (75% abatement on business transfers)
• Partial VAT recovery on head-office costs
• Lower risk of reclassification by the tax authority

Passive holding#

A pure holding structure with no involvement in subsidiary management. Simpler but fewer benefits: no VAT recovery on costs, ineligible for Dutreil in most cases.

Our recommendation: systematically prefer the active holding structure, which offers significantly stronger legal and tax protection.

Founder of a SASU#

You currently extract profits as dividends taxed at 31.4%. By creating a SAS holding above your SASU:

1. The SASU pays dividends up to the holding (1.25% effective tax)
2. The holding accumulates cash to fund the next acquisition or property investment
3. You draw from the holding only what you personally need, at the 31.4% flat tax

Multi-site property investor#

A holding that owns several IS-registered SCIs allows you to:

• Finance a new property acquisition using dividends already sitting in the holding (no tax extraction)
• Deduct interest on holding-level debt used to finance subsidiary acquisitions
• Progressively transfer shares in the holding to children via gifts

External growth (LBO)#

The holding takes out a bank loan to acquire a target company. Dividends from the target flow up to the holding (parent-subsidiary regime, near tax-free) and service the loan repayments. This is the core mechanics of a leveraged buyout.

Beyond the leveraged buy-out described above, the holding company is the central tool for two operations that matter most to established business owners.

Owner Buy-Out (OBO). You sell all or part of your own operating company to a holding you control. The holding funds the purchase with a bank loan, so you cash out a meaningful amount personally — often to diversify into property, life insurance (assurance-vie) or other assets — while keeping operational control as managing director. The target's dividends flow up to the holding under the parent-subsidiary regime (1.25% effective tax) and repay the acquisition debt. For a founder in their fifties preparing for an eventual exit, an OBO is frequently the most efficient way to take some chips off the table without losing the company.

Share-for-share contribution with capital-gains rollover (apport-cession, Article 150-0 B ter CGI). Instead of selling your shares and paying capital-gains tax immediately, you contribute them to your holding. The gain is placed in tax deferral (report d'imposition) rather than taxed. If the holding later sells the shares within three years, the deferral is preserved only where at least 60% of the sale proceeds are reinvested in an eligible economic activity within two years. This lets serial entrepreneurs and exiting owners recycle gains into new ventures or acquisitions before any tax falls due — a decisive advantage when timing a sale.

• Founders of a SASU or SAS generating more than €50,000 a year in profit they do not need to draw personally — the saving on inter-company dividends quickly outweighs the cost of running a second company.
• Foreign investors and expats building a French property portfolio across several SCIs, who want to centralise cash flows, finance new acquisitions pre-tax and prepare an orderly transfer to their children.
• Entrepreneurs growing by acquisition, for whom the holding is the natural vehicle for build-ups and leveraged deals.
• Business owners preparing a sale, using an OBO, a share contribution or capital-gains rollover to reinvest proceeds.
• Family groups organising a Dutreil transmission or the gradual gifting of holding shares.
• French subsidiaries of foreign groups that need a clean holding layer above their French operations, with English-language reporting and an IFRS bridge for the parent's board.

1. Free feasibility study: comparative simulation with and without holding
2. Legal structuring: choice of legal form (SAS, SASU), articles of association, share contribution (Article 150-0 B ter CGI)
3. Incorporation and registration: INPI single window, legal notice, bank account opening
4. Intercompany agreements: cash pooling agreement, management services agreement, management fee contracts
5. Accounting and tax filings: two companies managed in a coordinated way
6. Annual review: adapting the structure to legislative and personal wealth changes

1. Management fees without substance. Charging service fees from the holding to its subsidiaries with no genuine, documented service behind them is the number-one trigger for reclassification as abus de droit (abuse of law). Every service must be real, evidenced and priced at arm's length.
2. A passive holding where an active one was intended. A holding that takes no part in managing its subsidiaries loses VAT recovery on its costs and forfeits eligibility for the Dutreil regime on transmission. If you want those benefits, the holding must genuinely animate the group.
3. Ignoring the reinvestment condition of Article 150-0 B ter. Where a holding sells contributed shares within three years, at least 60% of the proceeds must be reinvested in an eligible activity within two years, or the deferred gain becomes taxable.
4. Electing for tax consolidation below the 95% threshold. The intégration fiscale election is invalid if the holding does not hold at least 95% of the subsidiary, exposing the group to a reassessment with late-payment interest.
5. Neglecting intra-group transfer pricing. Even in small groups, transactions between the holding and its subsidiaries must respect the arm's-length principle and be properly documented.

Case 1 — SASU founder, €200,000 profit: around €45,000 saved per year. An IT consultant runs a SASU earning €200,000 after tax. Drawing €150,000 as a personal dividend costs €47,100 in flat tax. Routed instead to a SAS holding, the same €150,000 is taxed at just €1,875 (parent-subsidiary regime); the founder draws only what they need to live on and reinvests the balance through the holding. Annual saving: about €45,000, compounding into property or life-insurance assets year after year.

Case 2 — OBO, owner aged 52, company valued at €2M. The owner wants liquidity without selling outright. A holding buys 60% of the company funded by a €1.2M loan; the owner receives roughly €1M net (capital gain taxed at 12.8% plus social charges) to reinvest, while staying CEO. The company's dividends repay the holding's debt under the parent-subsidiary regime.

Case 3 — Property group, four IS-registered SCIs. With +€120,000 and +€80,000 of profit in two SCIs and −€40,000 and −€20,000 of losses in two others, tax consolidation offsets the losses: corporate tax is charged on €140,000 instead of €200,000, saving about €15,000 a year, with a further benefit from the reduced 15% rate on the first €42,500 of consolidated profit.

See our full accounting packages and legal services on our pricing page.

• 10+ years structuring holdings for SME owners, property investors and tech founders, including cross-border and English-speaking shareholders.
• One integrated team for accounting, tax and the legal structuring — not three siloed advisers passing the file between them.
• A unified digital stack (Pennylane, Silae, Dext): holding and subsidiaries managed in one connected environment.
• Genuine independence — we take no commission on financial products, so the advice serves only your interest.
• Based at 58 rue de Monceau, Paris 8, five minutes from Villiers métro, and available for in-person meetings or fully remote work across France.