How to set up a holding company in France

Photo accompanying the text: Setting Up a Holding Company in France

What is a holding company and how does it work in France?

A holding company is a legal entity whose main purpose is to own and manage stakes in one or more other companies, called subsidiaries. Instead of producing goods or services directly, it holds shares, receives dividends, and often steers the strategic direction of the businesses it controls. In France, this structure is widely used by entrepreneurs, family groups, and investors who want to organise several activities under a single umbrella.

There are two broad categories. A passive (or 'pure') holding simply owns shares and collects dividends. An active (or 'animatrice') holding goes further: it takes part in managing its subsidiaries, providing services such as accounting, human resources, IT, or general management, usually invoiced to the subsidiaries. The distinction matters because the tax and social treatment can differ significantly, and some tax advantages are reserved for active holdings.

In practice, a holding lets you separate your assets from operational risk, consolidate the results of several companies, and make it easier to bring in new partners or eventually sell a business. For example, a founder running a consulting firm and a small property portfolio might create a holding to own both, keeping the risks of each activity ring-fenced while centralising decisions at the top.

Common legal structures for a French holding (SAS, SARL, SCI)

The most common form for a holding in France is the SAS (société par actions simplifiée). It offers considerable flexibility: the statutes can be tailored to organise governance, voting rights, and the entry or exit of shareholders. This makes it well suited to holdings that expect to grow, welcome investors, or manage complex family arrangements. The president of an SAS is generally treated as an 'assimilé salarié' for social security purposes.

The SARL (société à responsabilité limitée) is more rigid but reassuring for smaller, family-run groups. Its rules are largely fixed by law, which limits flexibility but also reduces the risk of drafting errors. A majority manager (gérant majoritaire) of an SARL falls under the self-employed social regime, which usually means lower social contributions but different coverage.

The SCI (société civile immobilière) is a specific civil company used mainly to hold real estate. It is not designed to hold commercial operating companies, but it is often combined with a holding when property is part of the group. A common setup is an SAS holding that owns the operating companies, alongside an SCI that owns the buildings and leases them to those companies. Choosing between these forms depends on your goals: flexibility, social status, the nature of the assets, and your plans for future partners.

Key steps to set up a holding company in France

Creating a holding follows the same broad path as any French company, with a few specific points. First, define the purpose and structure: decide whether the holding will be passive or active, which entities it will hold, and which legal form fits best. This is the moment to think about your long-term plans, because reorganising later can be costly.

Second, draft the statutes (statuts). These set out the company name, registered office, share capital, object, and governance rules. For a holding, the corporate object should clearly cover the acquisition and management of shareholdings, and any management services the holding intends to provide.

Third, deposit the share capital in a blocked bank account and obtain the certificate of deposit. Fourth, publish a legal notice of incorporation (avis de constitution) in an authorised legal announcements journal. Fifth, file the registration application through the official business formalities portal, which now centralises company registrations. Once processed, you receive a SIREN number and an extract from the trade register (Kbis).

A holding can be created 'from scratch' or through an apport de titres (contribution of shares), where you contribute the shares of an existing company to the new holding in exchange for shares in the holding. This second route has its own valuation and tax rules and almost always requires professional guidance.

Documents and capital requirements for registration

To register a holding, you generally need signed statutes, proof of the registered office (a lease, domiciliation contract, or property title), identity documents for the directors, a declaration of non-conviction and of filiation for the directors, the certificate of deposit of capital, and proof of publication of the legal notice. If shares are contributed rather than cash, you will also need documents supporting the valuation of those shares.

There is no legal minimum capital for an SAS or SARL beyond a symbolic amount, meaning a holding can technically be created with very little capital. However, an unrealistically low capital can weaken the company's credibility with banks and partners, and may raise questions if the holding later needs to finance acquisitions. A capital that reflects the real value of the shares or assets involved is generally more prudent.

When shares are contributed, a commissaire aux apports (contribution auditor) may be required to verify their value, unless certain thresholds and conditions allow an exemption. Getting the valuation right is important, both to avoid disputes between shareholders and to secure the intended tax treatment. Keep copies of all supporting documents, as they may be requested during audits or future transactions.

Tax considerations: the parent-subsidiary regime and integration

Two French tax mechanisms make holdings attractive. The parent-subsidiary regime (régime mère-fille) allows a holding to receive dividends from its subsidiaries while being taxed on only a small fraction of them, avoiding double taxation of the same profits. To qualify, the holding usually must hold at least a defined minimum percentage of the subsidiary's capital and keep those shares for a set holding period. A small share of the dividend, representing costs and charges, remains taxable.

The tax integration regime (intégration fiscale) goes further by allowing a group to combine the taxable results of the parent and its subsidiaries, so that losses in one company can offset profits in another. This generally requires the holding to own a high percentage of each subsidiary's capital. Integration can significantly reduce the group's overall tax bill, but it involves stricter conditions and more complex reporting.

There are also rules on the taxation of capital gains when shares are sold, and specific regimes for contributing shares to a holding that can defer tax in some cases. These rules change over time and depend heavily on individual circumstances. Before relying on any tax advantage, confirm the current thresholds and conditions with a qualified adviser and, where relevant, the official tax administration guidance, rather than assuming a benefit applies automatically.

Costs and ongoing obligations to anticipate

Setting up a holding involves both initial and recurring costs. Initial costs typically include drafting the statutes, the legal announcement, registration fees, and, where needed, fees for a contribution auditor and for legal or tax advice. Using a professional to draft the statutes correctly is often money well spent, especially for a holding that will manage several companies or welcome outside investors.

On an ongoing basis, a holding must keep proper accounts, prepare annual financial statements, hold the required shareholder meetings, and file its accounts. Because a holding sits above other companies, its accounting can be more involved than a single operating business, particularly if it provides management services or uses the tax integration regime. Budgeting for an accountant familiar with group structures is usually sensible.

Other recurring items may include corporate income tax filings, VAT obligations if the holding invoices services, and business property contributions depending on the activity. If the holding provides real management services to subsidiaries, those services must be genuine, properly documented, and invoiced at a fair price, otherwise the arrangement can be challenged. Anticipating these obligations from the start helps avoid unpleasant surprises and keeps the structure defensible.

Common mistakes and questions to review with a professional

A frequent mistake is creating a holding without a clear reason. The structure adds administrative weight, so the benefits, whether tax efficiency, asset protection, or preparing a sale, should outweigh the extra complexity. Another common error is choosing a legal form or drafting statutes that do not match future plans, forcing costly changes later.

Many people also underestimate the difference between a passive and an active holding. Claiming to be an active 'holding animatrice' without actually managing the subsidiaries, and without real invoiced services, can lead to the loss of tax advantages during an audit. Similarly, undervaluing or overvaluing contributed shares can create tax and legal problems.

Before finalising anything, it is worth reviewing several questions with a professional: Does a holding genuinely serve your objectives? Which legal form and social status suit your situation? Do you meet the conditions for the tax regimes you are counting on? How will management fees be justified? Because rules on tax and company law evolve, treat any general information, including this article, as a starting point and confirm the specifics with a qualified accountant or lawyer before you commit.

Example

Comparison of common French holding structures

Structure	Main use	Flexibility	Typical director social status
SAS	Holding operating companies, welcoming investors	High (statutes customisable)	Assimilé salarié
SARL	Smaller, family-run holdings	Low (rules fixed by law)	Self-employed if majority manager
SCI	Holding real estate within a group	Moderate (civil company rules)	Depends on management arrangement

FAQ

Can I create a holding company on my own? Yes, a holding can have a single shareholder, for example through a single-person SAS (SASU) or single-person SARL (EURL). The registration steps are similar, but professional advice is still recommended for the statutes and any tax choices.

Do I need a minimum amount of capital to set up a holding? For an SAS or SARL, there is no meaningful legal minimum, so a holding can be created with a very small capital. In practice, a capital that reflects the real value of the shares or assets involved is more credible with banks and partners.

What is the difference between the parent-subsidiary regime and tax integration? The parent-subsidiary regime reduces the taxation of dividends received from subsidiaries. Tax integration lets a group combine the results of the parent and subsidiaries so losses can offset profits. Integration requires a higher ownership threshold and stricter reporting.

Is it better to create a holding from scratch or by contributing existing shares? It depends on your situation. Creating from scratch is simpler, while contributing existing shares (apport de titres) can restructure an existing group and may allow tax deferral in some cases. The contribution route involves valuation and tax rules that call for professional guidance.