Do You Need a French Bank Account to Participate in a Share Capital Increase in France?
No. A subscriber to a share capital increase of a French company does not necessarily need to have a bank account in France.
When a cash share capital increase is carried out, the subscription funds must be paid in accordance with the applicable procedure. The funds may notably be deposited with a French notary acting as depositary.
Subject to prior review of the file and completion of the required checks, a foreign investor may transfer the subscription funds directly from a bank account located outside France.
This is particularly useful for foreign shareholders and investors wishing to acquire a stake in a French company without first having to establish a banking relationship in France.
The absence of a French bank account does not therefore necessarily prevent the subscription. The next practical issue is how to transfer share capital increase funds from a foreign bank account to France.
Do You Need to Open a French Bank Account to Invest in a French Company?
No, in principle.
The fact that an individual or company subscribes to a share capital increase of a French company does not, by itself, require that subscriber to open a personal or corporate bank account in France.
A foreign investor may therefore participate in the transaction even if it has no French bank account.
Where the subscription funds are deposited with a French notary, the payment may, subject to acceptance of the file, be made directly from the subscriber’s foreign bank account.
It is important to distinguish between the bank account used by the investor to pay the subscription funds and the bank account of the French company receiving the funds once the capital increase has been completed.
Can a Foreign Investor Transfer the Funds Directly from Abroad?
Yes, provided that the transfer is permitted under the regulations applicable to the investor and the funds.
Once the file has been reviewed, the French notary provides the payment instructions required to make the subscription payment.
The transfer may therefore originate from a bank account located, for example, in:
- another European Union country;
- the United Kingdom;
- the United States;
- China;
- the Middle East;
- Africa;
- or another jurisdiction.
The fact that the bank account is located outside France does not, by itself, prevent the funds from being deposited for the capital increase.
Acceptance nevertheless depends on the circumstances of the transaction and completion of the required checks.
More generally, see the requirements applicable where a share capital increase is funded with money originating from abroad.
Does the Foreign Bank Account Have to Be in the Subscriber’s Name?
The relationship between the subscriber and the holder of the originating bank account is an key part of the review.
Where an individual personally subscribes to the share capital increase, the simplest situation is generally for the transfer to be made from a bank account held in that individual’s name.
Similarly, where a foreign company is subscribing to the capital increase, transferring the funds from a corporate bank account held by that company establishes a clear connection between the subscriber and the payment.
This makes the subscription funds easier to identify and trace.
Can the Funds Be Transferred from a Spouse’s, Shareholder’s or Another Company’s Account?
Such a situation must be disclosed before any transfer is made.
The fact that a bank account belongs to a spouse, shareholder, parent company, subsidiary or another company within the same group does not automatically mean that the payment can be treated as a payment made by the subscriber.
The French notary must be able to understand:
- who is legally subscribing to the share capital increase;
- who is actually making the payment;
- why the funds are being transferred by another person or entity;
- the relationship between the parties;
- and the source of the funds.
Additional documentation may therefore be required.
A third-party payment should never be arranged without first informing the depositary and obtaining confirmation that the proposed payment structure can be accepted.
Does a Foreign Company Need to Open a French Bank Account Before Investing?
No, in principle.
A foreign company may subscribe directly to a share capital increase of a French company without opening a French corporate bank account solely for the purpose of making the investment.
Subject to prior review, it may transfer the subscription funds from its existing corporate bank account outside France.
The documentation will generally need to establish:
- the legal existence of the foreign company;
- the identity of its legal representative;
- the authority of the person acting in connection with the investment;
- its ownership structure;
- its ultimate beneficial owners;
- and the relationship between the subscribing company and the holder of the originating bank account.
This can be particularly useful for an international group making its first investment in France.
Can a French Notary Receive a Transfer from Any Foreign Bank?
The fact that a financial institution is established outside France does not automatically prevent a transfer from being received.
However, not all banks, payment institutions and transfer services operate in the same way.
The notary must be able to identify the originating financial institution, the holder of the account and the path followed by the funds.
Some payment institutions, intermediary accounts or international transfer services can make it more difficult to establish this information.
For this reason, the proposed payment method should be reviewed before the transfer is initiated, and the subscriber should follow the payment instructions provided by the notary.
What Information About the Foreign Bank Account May Be Required?
Depending on the circumstances, the subscriber may be asked to provide information identifying:
- the bank or financial institution holding the account;
- the account holder;
- the country in which the account is located;
- the account details;
- and, where necessary, bank statements or other information showing the availability and origin of the funds.
These elements help connect the incoming payment with the relevant subscriber and subscription.
Separate supporting documentation concerning the source of funds may also be required.
Where the subscriber is a new international investor, see also our guide to share capital increases in France involving foreign investors.
What if the Subscriber’s Country Restricts International Transfers?
The fact that a French bank account is not required does not mean that funds can always be transferred freely to France.
Some countries operate foreign exchange controls or impose restrictions on outbound investments and international capital movements.
The subscriber must therefore ensure that the proposed transfer is permitted under the regulations applicable in the country from which the funds are being transferred.
This can be particularly relevant for transactions involving funds held in countries such as Morocco, Algeria, Tunisia or China.
The ability of a French notary to receive the funds does not circumvent foreign exchange or capital control regulations in the country of origin.
Can the Subscription Be Paid in a Currency Other Than 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 must therefore be sufficient to satisfy the subscription payment required for the capital increase.
Where the subscriber’s account is denominated in another currency, particular attention should be paid to:
- exchange rates;
- currency conversion charges;
- fees charged by the originating bank;
- and fees charged by intermediary banks.
These costs can result in the amount ultimately received being lower than the amount sent.
The subscriber should therefore follow the payment instructions provided by the depositary and anticipate any conversion or banking costs.
How Can You Subscribe from a Foreign Bank Account?
The deposit procedure can be organised remotely.
In practice:
- the French company provides the documents relating to the share capital increase;
- the documentation concerning the subscriber is submitted to the French notary;
- information concerning the foreign bank account and, where required, the source of funds is reviewed;
- once the file has been accepted, the notary provides the payment instructions;
- the subscriber transfers the funds from its foreign bank account;
- once the required funds have actually been received and the necessary checks completed, the depositary’s certificate is issued.
The transfer must not be initiated before the payment instructions have been provided.
Subscribe to a French Share Capital Increase Without a French Bank Account
Chassaint & Cerclé Notaires, a French notary office based in Paris, assists French companies with the deposit of funds for share capital increases, including transactions involving subscribers who do not have a bank account in France.
Subject to prior review of the file, subscription funds may be transferred from a foreign bank account held by an individual or corporate investor.
The documentation can be submitted remotely before any payment is made, allowing the office to review the subscriber, the originating bank account, any ultimate beneficial owners and the source of funds.
Once the file has been accepted, payment instructions are provided to the subscriber.
After receipt of the funds, the depositary’s certificate can be issued within 24 business hours, provided that the file is complete and the required checks have been completed.
For further information and to submit your file, please visit our dedicated share capital increase page, click here.
