Can Share Capital Increase Funds Be Transferred from a Foreign Bank Account to France?
Yes. Funds subscribed to a share capital increase of a French company may, subject to prior review of the file and completion of the required checks, be transferred directly from a bank account located outside France.
The subscriber does not necessarily need to transfer the funds to a French bank account first.
Where the subscription funds are deposited with a French notary, a foreign investor may, after the file has been reviewed and payment instructions have been provided, make an international bank transfer directly to the account specified by the notary.
This procedure is particularly useful for French companies carrying out a share capital increase involving foreign shareholders, companies or investors.
The subscriber does not necessarily need to open a bank account in France first. See Do you need a French bank account to participate in a share capital increase in France?
Can a Foreign IBAN Be Used for a Share Capital Increase in France?
Yes.
The fact that the originating bank account is located outside France does not, by itself, prevent the funds from being deposited for a French share capital increase.
The account may, for example, be located in:
- another European Union country;
- the United Kingdom;
- the United States;
- Switzerland;
- the Middle East;
- Asia;
- Africa;
- or another jurisdiction.
The geographical location of the bank account is not the only relevant factor.
The depositary must also be able to identify the subscriber, the holder of the originating account and the source of the funds.
Does the Bank Account Have to Be Held by the Subscriber?
It is generally preferable for the transfer to originate directly from a bank account held by the subscriber.
Where an individual subscribes personally to the share capital increase, a transfer from that individual’s own bank account establishes a clear connection between the subscriber and the funds received.
Similarly, where a foreign company is subscribing, payment from a corporate bank account held by that company provides a clear link between the subscribing entity and the transfer.
This makes the incoming payment easier to identify and the funds easier to trace.
If the holder of the originating account is not the subscriber, this must be disclosed to the French notary before any transfer is made.
Can the Funds Be Transferred from a Parent Company or Another Group Company?
This situation can arise in international groups, particularly where cash management is centralised.
However, a payment made by another group company should not automatically be treated as equivalent to a payment made directly by the subscriber.
The French notary will need to understand:
- which company is legally subscribing to the share capital increase;
- which company is actually transferring the funds;
- why another entity is making the payment;
- the relationship between the companies;
- and the source of the funds.
Additional documentation may therefore be required to establish the group structure and explain the payment arrangements.
The proposed structure must consequently be submitted to the depositary before the transfer is initiated.
Can Wise, Revolut or Another International Payment Service Be Used?
The use of a payment institution or international money transfer service must be reviewed with the depositary in advance.
Some payment services may use intermediary accounts, pooled accounts or payment arrangements that make it more difficult to identify the original account holder.
For a share capital increase, the French notary must be able to match the incoming payment with the relevant subscriber and complete the required checks.
The issue is therefore not simply whether a service is technically capable of transferring euros to France.
The information accompanying the transfer must also make it possible to identify the origin of the payment and its relationship with the subscriber.
The proposed payment method must therefore be approved before the funds are transferred.
International transfers also form part of the broader requirements applicable to share capital increases funded with money originating from abroad.
Does the International Transfer Have to Be Made in Euros?
The payment arrangements should be confirmed before the transfer is initiated.
The share capital of a French company is denominated in euros. The amount actually received by the depositary must therefore correspond to the amount that the subscriber is required to pay.
Where the foreign bank account is denominated in another currency, the transfer may involve a currency conversion.
The subscriber should therefore take into account:
- the applicable exchange rate;
- currency conversion charges;
- fees charged by the originating bank;
- fees charged by intermediary banks;
- and the net amount ultimately received in France.
International banking fees can result in the amount credited to the depositary being lower than the amount originally sent.
The subscriber should therefore follow the payment instructions provided by the depositary carefully.
Where the funds are held in North Africa, specific foreign exchange rules may apply. See our guide to share capital increases using funds from Morocco, Algeria or Tunisia.
Can a Subscription Be Paid in Several Bank Transfers?
It may be possible to split a subscription payment into several transfers where the circumstances justify it and the arrangement has been agreed with the depositary in advance.
For example, a foreign bank may impose transfer limits or require a substantial payment to be divided into several transactions.
Each payment must then be capable of being identified and matched with the same subscriber and share capital increase.
Splitting a payment does not remove the need to comply with applicable banking, foreign exchange or capital transfer regulations and should not be used to circumvent them.
The depositary’s certificate can only be issued once the amount required for the transaction has actually been received.
Can Several Foreign Investors Make Separate Transfers?
Yes.
A share capital increase may involve several subscribers, each making a separate payment from its own bank account.
This is particularly common in investment rounds involving several investors.
Each incoming transfer should therefore be capable of being matched with:
- the identity of the relevant subscriber;
- the amount of its subscription;
- and the relevant share capital increase.
The payment references provided by the French notary should be followed carefully to facilitate this identification.
How Long Does an International Transfer to France Take?
The time required depends on the country of origin, the currency, the originating bank and the banking network used for the transfer.
A euro transfer within the SEPA area may generally be received relatively quickly.
A transfer originating outside the SEPA area may take longer and may pass through one or more correspondent banks before reaching France.
Financial institutions involved in the payment chain may also carry out additional checks.
Where a share capital increase must be completed before a specific deadline, the international transfer should therefore be initiated sufficiently early.
What Documents May Be Required for a Transfer from Abroad?
Depending on the transaction, the French notary may require documents establishing:
- the identity of the subscriber;
- the holder of the originating bank account;
- the identity of the foreign bank;
- the source of the funds;
- the availability of the funds;
- and, for corporate subscribers, their ownership structure and ultimate beneficial owners.
For an individual investor, source-of-funds documentation may include bank statements, evidence of income, documents relating to the sale of an asset or other supporting evidence appropriate to the circumstances.
For a corporate investor, financial statements, bank statements or documentation relating to the company’s available cash may be required.
The precise documentation depends on the amount and characteristics of the transaction.
What Happens if the Amount Received Is Lower Than the Amount Sent?
This can occur with international transfers because of banking fees or currency conversion.
For the purposes of the share capital increase, the relevant amount is the amount actually received by the depositary.
If banking fees result in the amount received being lower than the subscription amount that must be paid, an additional transfer is required before the depositary’s certificate can be issued.
Foreign investors must therefore anticipate charges imposed by the originating bank and any intermediary banks.
Can the Country of Origin Prevent the Transfer to France?
Yes.
The fact that funds can be received in France does not necessarily mean that the country in which the funds are held permits them to be transferred abroad.
Some jurisdictions operate foreign exchange controls or impose restrictions on outbound investments and international capital movements.
This issue may arise, for example, with funds held in Morocco, Algeria, Tunisia, China or other jurisdictions applying restrictions to international transfers.
The subscriber should therefore confirm with its bank and, where appropriate, local advisers that the proposed transfer can be made in accordance with the applicable regulations.
Using a French notary as depositary does not circumvent foreign exchange or capital control rules in the country of origin.
How Do You Transfer Share Capital Increase Funds from a Foreign Bank Account?
The international transfer should take place only after the file has been reviewed.
In practice:
- the documents relating to the share capital increase are submitted to the French notary;
- the subscriber and, where applicable, its ultimate beneficial owners are identified;
- information concerning the originating bank account and source of funds is reviewed;
- once the file has been accepted, the notary provides the payment instructions;
- the subscriber makes the international bank transfer in accordance with those instructions;
- the incoming payment is matched with the relevant subscription;
- once the full amount has been received and the required checks completed, the depositary’s certificate is issued.
The funds must not be transferred before the file has been accepted and payment instructions have been provided.
Deposit Share Capital Increase Funds from a Foreign Bank Account 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 subscription funds are transferred from bank accounts outside France.
The file can be reviewed remotely before any transfer is made, including the documents relating to the company, subscribers, ultimate beneficial owners, originating bank accounts and source of funds.
Once the file has been accepted, payment instructions are provided to the subscribers.
The subscription funds may then be transferred directly from the foreign bank accounts accepted for the transaction.
After receipt of the full amount and completion of the required checks, the depositary’s certificate can be issued within 24 business hours.
For further information and to submit your file, please visit our dedicated share capital increase page, click here.
