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[ESTABLISHING A BUSINESS ENTITY IN FRANCE]
biotechnology field;
in the relevant EU member state, such branch tax is not applicable. This tax may be reduced or eliminated by an applicable double taxation convention. Although branch withholding tax normally applies to undistributed profits, such profits may be exempted from the tax if an application is filed with the tax authorities and if certain requirements are met.
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data hosting activities whose compromise or disclosure is likely to interfere with the performance of certain activities… A complete list of the sensitive areas dated May 23, 2023, can be found on the General Treasury Department website ( Direction Générale du Trésor )
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Dividends paid to a non- resident (individual or legal entity) by a French company are subject to a withholding tax. The rate of this tax depends on the type of the beneficiary and the time of payment: If the foreign beneficiary is an individual: 12.8% for dividends paid from 1 st January 2018;
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A non-resident contemplating a direct investment in any of the aforementioned restricted areas must first file a declaration with the Ministry of Economy and Finance (Treasury Department) setting out the details of the transaction and obtain its prior authorization. Once the formal request for authorization is submitted, the Minister for the Economy has a maximum regulatory lead time of 75 working days / 2 months to respond to the request. If the Minister does not respond within the time limit, , the application is deemed to have been refused (art. R 151-6, al. 1 and al. 2 Code monétaire et financier) • Any restrictions on remitting funds out of the jurisdictions (withholding taxes, etc.) • Branch withholding tax: profits earned by a French branch of a foreign company and distributed to the foreign shareholders are subject to a withholding tax of 25% on after- tax income. However, if the foreign company is (i) located in the EU and is subject to income tax with no possibility of opting out or of being exempt and (ii) the income is taxable
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If the foreign beneficiary is a legal entity: 25% for dividends paid from 1 st January 2022. Such withholding tax may however be reduced or eliminated under an applicable tax convention or EU directive. For example, under the parent-subsidiary directive, dividends paid by a French company to an EU parent company are exempt from withholding tax if the parent holds more than 10% of the share capital of the French distributing company for at least two years preceding the distribution. The rate of such withholding tax increases to 75% if the dividends are paid to a non-resident located in a non-cooperative tax jurisdiction. • Commissions, royalties and fees paid to a non-resident for services
ILN Corporate Group – Establishing a Business Entity Series
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