Can Share Capital Increase Funds Be Transferred from Abroad to France?

Yes. A French company can carry out a share capital increase using funds transferred from abroad.

The fact that subscription funds are held in a bank account outside France does not, in itself, prevent them from being deposited for a share capital increase in a French company.

The transaction must, however, allow the subscriber, the originating bank account and the source of the funds to be clearly identified. Where the funds are deposited with a French notary, the required checks are carried out before the funds are accepted and the depositary’s certificate is issued.

The file should therefore be submitted for review before any international transfer is made.

Do Share Capital Increase Funds Have to Come from France?

No.

A subscriber to a share capital increase of a French company may hold the investment funds in a bank account located outside France.

This may apply to:

• a French shareholder holding funds abroad;
• an individual residing outside France;
• a foreign company;
• a foreign holding company;
• or an institutional investor established outside France.

The location of the bank account does not, by itself, prevent the investor from subscribing to the share capital increase.

The transfer must nevertheless be clearly connected to the relevant subscriber and transaction.

Does the Subscriber Need a French Bank Account?

Not necessarily.

A subscriber does not generally need to open a French bank account solely in order to participate in the share capital increase of a French company.

Subject to prior review of the file, the subscription funds may be transferred directly from a foreign bank account to the account specified by the depositary.

This is particularly useful for international investors who do not already have a banking relationship in France.

The transaction remains subject to the required identification, compliance and source-of-funds checks.

See Do you need a French bank account to participate in a share capital increase in France?

Can an International Transfer Be Made Directly to a French Notary?

Yes, subject to prior approval of the file.

In practice, subscription funds should not be transferred to the notary before the transaction has been reviewed.

The company first submits the documents relating to the share capital increase and the relevant subscribers.

The French notary reviews the file and requests any additional documentation that may be required.

Once the file has been accepted, payment instructions are provided to the subscribers.

The international transfer can then be made in accordance with those instructions.

This procedure allows the identity of the subscriber, the originating bank account and any required supporting documentation to be reviewed before the funds are transferred.

Where payment is to be made directly from abroad, see how to transfer share capital increase funds from a foreign bank account to France.

Must the Bank Account Be Held in the Subscriber’s Name?

The relationship between the subscriber and the originating bank account is an important element of the review.

Where an individual personally subscribes to the share capital increase, a transfer from a bank account held in that individual’s name is generally the most straightforward situation.

Similarly, where a foreign company subscribes to the share capital increase, transferring the funds from a bank account held by that company provides a clear connection between the subscriber and the payment.

If a payment is to be made by a third party or from an account that is not held in the subscriber’s name, this should be disclosed to the French notary before any transfer is made.

Additional supporting documentation may be required, and the possibility of accepting the payment will need to be considered in light of the particular circumstances.

What Source-of-Funds Documents May Be Required?

French notaries are subject to legal obligations concerning the identification of the persons and funds involved in the transactions they handle.

Depending on the amount invested, the country of origin, the subscriber’s profile and the circumstances of the transaction, supporting documentation concerning the source of the funds may therefore be required.

This may include, depending on the circumstances:

• bank statements;
• corporate financial statements;
• documents evidencing available corporate cash reserves;
• documents relating to the sale of an asset;
• documents relating to financing;
• or other evidence providing a coherent explanation of the origin of the investment funds.

The documentation required will depend on the particular transaction.

Can a Foreign Company Transfer the Funds from Its Own Bank Account?

Yes.

A foreign company subscribing to a share capital increase of a French company may, subject to prior review of the file, transfer the subscription funds directly from its bank account outside France.

The documentation must notably allow the French notary to identify:

• the subscribing company;
• its legal existence;
• its legal representative;
• the person authorised to act on its behalf;
• its ownership structure;
• its ultimate beneficial owners;
• and the bank account from which the funds will be transferred.

Depending on the jurisdiction and corporate structure, foreign corporate documents, translations or additional supporting documentation may be required.

For a broader overview, see our guide to share capital increases in France involving foreign investors.

Can the Investor’s Country Restrict the Transfer of Funds to France?

Yes, and this is an important consideration in international transactions.

French law may allow the funds to be received in France while the country from which the funds are being transferred imposes its own foreign exchange or capital transfer restrictions.

Some jurisdictions regulate, among other matters:

• investments made outside the country;
• conversion of the local currency;
• international bank transfers;
• or the movement of capital abroad by residents.

The subscriber must therefore also ensure that the proposed transfer complies with the rules applicable in the country from which the funds are being transferred.

The ability of a French notary to receive the funds does not override or circumvent restrictions imposed by the investor’s country of origin.

Can the Subscription Funds Be Sent in Several Transfers?

Depending on the circumstances of the transaction, a subscription may involve more than one bank transfer.

Where several transfers are contemplated, the French notary should be informed before the payments are initiated.

Each payment must be identifiable and capable of being matched with the corresponding subscription.

This is particularly important where several investors participate in the same share capital increase, as the amounts received must be matched with the individual subscribers and their respective subscription commitments.

Do International Transfers Take Longer?

Not necessarily from a legal or documentation perspective, but the banking process itself may take longer.

An international payment may pass through one or more intermediary banks before reaching the depositary’s account.

The processing time may depend on the country of origin, the originating bank, the currency and any intermediary institutions involved.

The depositary’s certificate can only be issued once the required funds have actually been received.

International banking delays should therefore be taken into account where the share capital increase must be completed by a specific date.

Deposit Share Capital Increase Funds from Abroad with a French Notary

Chassaint & Cerclé Notaires, a French notary office based in Paris, assists French companies with the deposit of funds for share capital increases, including where the subscribers or their bank accounts are located outside France.

The file can be submitted remotely for review before any transfer is made.

Once the required checks have been completed, the office provides the payment instructions allowing the subscribers to transfer their funds from abroad.

After receipt of the funds, the depositary’s certificate can be issued within 24 business hours, provided that the file is complete and has been approved.

The office handles transactions involving foreign individuals, foreign companies and international bank transfers.

For further information and to submit your share capital increase file, please visit our dedicated share capital increase page, click here.