The French SARL explained: structure, costs and tax for foreign investors
If you already own a chalet or an apartment in the French Alps, you have probably come across the “SCI” as a way to hold it. But an SCI is not built for running a business, and business and company law in France offers a different vehicle — the SARL — for anyone who wants to trade commercially: renting out equipment, managing chalets for other owners, or running a small shop in a resort town. This guide sets out what an “SARL” actually is, how it compares with an “SAS“, and what it costs to set one up and run it.
The problem :
- Foreign owners often assume the company holding their property can also run a rental or hospitality business — in most cases, it cannot.
- The SARL and the SAS are frequently confused, and the wrong choice can be costly to unwind later.
- Cost estimates found online rarely separate the fixed official fees from the variable professional ones.
The stakes :
- Choosing between an SARL and an SAS affects tax, the manager’s social security cover, and how easily a partner or investor can join later.
- Running a commercial letting activity through the wrong structure — an SCI, in particular — can trigger an unplanned change of tax regime.
- Getting the manager’s social status wrong is a common oversight for a foreign owner who appoints themselves manager by default.
The solutions :
- Understand what the SARL is designed for, and when an SAS may suit the project better.
- Anticipate the formation costs and the ongoing tax and social security position before choosing a structure.
- Take advice on the manager’s status early, since it shapes both cost and social protection.
What is an SARL, and when foreign investors in France need one
An SARL (société à responsabilité limitée) is a French commercial company in which the partners’ liability is generally limited to what they have contributed. It needs at least two partners, up to a limit of 100; a single founder instead sets up an “EURL“, its one-person equivalent and is similar in practice.
This distinction matters for Alpine property owners specifically because an SCI, the vehicle most often used to hold a chalet, is limited to a civil purpose. As our guide to buying French property through a company explains, an SCI cannot lawfully run a furnished letting business, and attempting to do so through it generally triggers a change of tax regime rather than achieving the intended structure. Once the activity becomes genuinely commercial — seasonal chalet rental with services, equipment hire, a concierge business, a shop — a trading company such as an SARL, or an SAS, is generally the more suitable vehicle. For how French property is more commonly co-owned before reaching this stage, see our guide to joint ownership, indivision, tontine and SCI structures.
SARL vs SAS: which structure fits your project
Both are limited-liability commercial companies with a legal minimum share capital of just €1, though a low capital may look less convincing to a bank or a landlord granting a commercial lease. Beyond that starting point, the two structures diverge in ways that matter for a foreign investor.
| SARL | SAS | |
|---|---|---|
| Partners | 2 to 100 (1 for the EURL version) | 1 (SASU) to unlimited |
| Manager | One or more gérants, individuals only | A président, who can be an individual or a company |
| Manager’s social status | Majority gérant: self-employed (TNS, via the SSI) — generally lower charges, more limited cover. Minority/equal gérant: assimilated employee | Président: assimilated employee — cover broadly similar to a salaried role, without unemployment insurance |
| Statutory flexibility | Fairly closely framed by the Commercial Code | Considerably more freedom to set your own governance rules |
| Bringing in a partner later | More constrained; transfers are generally subject to an approval clause (beware of the tax regime of the family SARL) | Generally easier; shares are more freely transferable |
| Transfer duty on shares/parts | Typically around 3%, after an allowance (the tax is calculated on the net value of the shares) | Typically around 0.1% |
| Family-run business | Can elect for income tax treatment without the usual time limit, as a “SARL de famille” | Same 5-year time-limited option as other companies |
As a broad guide,
- the SARL tends to suit a stable, family-run Alpine business where the founders want to keep close control;
- the SAS tends to suit a project that may need to bring in a partner, an investor, or a more flexible governance structure later. A structure more dedicated to large investments projects with long term strategy
Setting up an SARL: steps and costs
Setting up an SARL involves drafting the company’s articles of association, depositing the share capital (a notaire is providing a major time saving here – as there is no need to have a bank on board at the time of setting up the company), publishing a notice in an authorised legal announcements journal, and registering the company, which in turn generates its SIREN and SIRET numbers.
| Item | Official cost | What can vary |
|---|---|---|
| Share capital | From €1 | A higher capital is often preferred for credibility with banks or landlords |
| Legal announcement | €200 approx (mainland France) | Varies slightly by département |
| Registration (RCS) | €33.83 | Fixed |
| Beneficial owner declaration | €19.33 | Fixed |
| Drafting the statuts | Free if done alone | Roughly €300 to €1,200+ with professional support |
According to the official government guide to company formation costs, the fixed administrative fees for a commercial company come to a relatively modest total; the main variable is the professional support chosen for drafting the statuts and structuring the company correctly from the outset — which matters more the more the business involves staff, a commercial lease, or several partners.
How an SARL is taxed
An SARL is subject to corporate tax (impôt sur les sociétés) by default. According to BOFiP’s official guidance, the standard rate has stood at 25% since 2022, with a reduced rate of 15% available on the first €42,500 of profit for companies with turnover under €10 million whose capital is fully paid up and at least 75% held by individuals. An option for income tax treatment instead of corporate tax is available for the first five years under conditions — except for a “SARL de famille”, a specific regime for companies where all partners are close family members, which can use this option without a time limit.
For a project connected to a wider property or investment strategy, this choice interacts with broader tax and estate planning considerations, and it is generally worth reviewing alongside the rest of a foreign owner’s French tax position rather than in isolation.
The gérant’s social status: a point foreign owners often miss
A detail that catches many foreign buyers by surprise is that the manager’s social security status depends on their shareholding. A gérant holding more than 50% of the shares is classed as self-employed (a “travailleur non salarié”, affiliated to the Sécurité sociale des indépendants), which generally means lower social charges but more limited cover — notably no unemployment insurance and a more modest safety net. A minority or equal gérant, like a président of an SAS, is instead treated as an assimilated employee, with charges and cover closer to a salaried position.
This is worth deciding deliberately rather than by default: a foreign owner who appoints themselves sole manager and majority shareholder without weighing the alternative may end up with less social protection than they expected.
The Ashworth case: choosing a structure for a chalet rental business
Mr and Mrs Ashworth, a British couple, bought a chalet in Alpe d’Huez a few years ago and wanted to start a small seasonal business alongside it — renting out ski equipment to guests and offering a concierge service to other chalet owners in the resort. Because this activity is commercial rather than a simple property holding, it should not run through an SCI.
After comparing the two options, they set up an SARL, with Mrs Ashworth as majority gérant, reflecting a preference for a more contained, family-run structure over the greater openness of an SAS, which they judged unnecessary since they had no plans to bring in outside investors. Their notaire helped draft statuts anticipating a possible later transfer of shares to their children, alongside the commercial lease needed for a small storage unit — a matter for French real estate law in its own right. Their notaire also managed to avoid any social contribution of the Gerant in france.
Why a notaire’s involvement matters beyond the formation itself
A notaire’s role in company law does not end once the SARL is registered. Drafting statuts that anticipate future share transfers, family succession, or the arrival of a new partner is generally more valuable than a generic template, particularly for a foreign owner unfamiliar with French company law. Beyond formation, a notaire — often working alongside the company’s accountant — can also assist with amending the statuts, formalising share transfers, or handling the secretarial obligations that keep a company compliant over time.
Frequently asked questions
What’s the difference between an SARL and an SAS?
Both are limited-liability commercial companies, but the SAS offers considerably more statutory flexibility and is generally easier to open up to new partners, while the SARL is more closely framed by law and can suit a family-run business, including through the “SARL de famille” tax option.
Can a non-resident set up an SARL in France?
Yes — there is no residency requirement to be a partner or a manager of a French SARL, though a foreign manager should consider the practical implications for banking, tax residency, and, where relevant, their own visa or immigration status.
How is an SARL taxed?
By default, an SARL pays corporate tax at 25%, with a reduced rate of 15% on the first €42,500 of profit for qualifying smaller companies. An option for income tax treatment is available under conditions : this is known as the “SARL de famille“. It’s very common in practice to purchase, hold and run a french property.
Can a SARL hold and rent out French real estate?
It can, but a company set up mainly to hold and passively let unfurnished property is usually better served by an SCI; an SARL becomes the more natural choice once the activity is genuinely commercial, such as furnished or serviced letting.
What’s the difference between an SARL and an SCI?
An SCI is a civil company suited to passively holding and managing property; it should not carry out a commercial activity such as furnished letting. A SARL is a commercial company built for exactly that kind of trading activity.
What social status does the manager (gérant) have?
It depends on their shareholding: a majority gérant is self-employed (TNS, or “Travailleur non-salarié”), with lower charges but more limited social cover, while a minority or equal gérant is treated as an assimilated employee, closer to a salaried position.
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