SCI and foreign buyers: the complete guide to structuring your purchase in Paris

The SCI (Société Civile Immobilière, a French civil property company) comes up in almost every conversation we have with foreign buyers. Notaires, bankers, tax lawyers: each has an opinion, sometimes contradictory, on whether to create an SCI to buy property in Paris. After more than 1,200 mandates at Home Select, including a growing share of international clients, we have one certainty: the SCI is a powerful tool, but not a universal one. It solves some problems elegantly and creates others if poorly calibrated.

The principle of the SCI: owning shares, not a building

The mechanism is simple in principle. Instead of buying a Paris apartment in your own name (or as a couple), you create a French company, the SCI, which buys the property. You and any co-partners hold shares in this company. The property belongs to the company, not to you directly.

This distinction between direct ownership and ownership through a company opens up possibilities for estate planning, multi-owner management and wealth protection that direct ownership does not offer, or offers less efficiently.

The SCI requires at least two partners. A single partner is not enough: this is a fundamental difference from the American LLC (Limited Liability Company) or the British SPV (Special Purpose Vehicle), which can be single-member entities. In practice, the two partners are often the two members of a couple, a parent and a child, or two investors.

The concrete advantages for a foreign buyer

Simplified estate planning

This is the main argument. Transferring SCI shares is legally and fiscally more flexible than transferring a property. Shares are divisible: you can give 10%, 20% or 50% of the company to your children, gradually, using the 100,000 euro allowance per child every 15 years. Giving 10% of a property in joint ownership is technically possible but far more complex and expensive.

The question of inheritance for expatriates is often what prompts the creation of an SCI. An American couple with two children, owning an apartment worth 1.5 million euros through an SCI, can transfer 400,000 euros of shares every 15 years entirely free of tax while keeping management control through the manager role.

Simplified multi-owner management

When the purchase involves several people, an unmarried couple, siblings or business partners, the SCI avoids the pitfalls of joint ownership (indivision, or co-ownership by undivided shares). Under joint ownership, every major decision needs the unanimity of all co-owners, and any one of them can request partition at any time, which can force a sale. In an SCI, the articles set the governance rules: simple or qualified majority for routine decisions, the manager’s powers, the terms for share transfers. The flexibility is considerable.

Personal asset protection

A partner’s personal creditors cannot directly seize the property held by the SCI. They can seize only the partner’s shares. This is a relative protection (the SCI is not a limited liability commercial company), but it is an extra shield, useful in some complex wealth situations.

The disadvantages to know

Operating costs

The SCI is not free. Creation costs 1,500 to 3,000 euros (professional drafting of the articles, registration fees, legal announcement publication). After that, annual accounting is mandatory: 1,000 to 2,000 euros/year with an accountant. The annual general meeting of partners must be held and recorded in minutes. For a property worth 500,000 euros, these annual fees come to 0.2 to 0.4% of the value, a cost that mounts up over 20 or 30 years of ownership.

Fiscal transparency (SCI under IR)

By default, the SCI is “transparent” for tax purposes: it is not itself taxed. Income and expenses flow up to the partners, in proportion to their shares. If the property is let, each partner declares their share of the rental income in their personal tax return. For a non-resident, this French rental income is subject to a minimum withholding of 20% (or the effective global rate if lower), the same regime as for direct ownership.

The IS trap

The corporate income tax option is tempting for a rental investment: it allows depreciation of the property (as with LMNP), which sharply reduces the taxable result in the early years. But the trap springs at resale. The capital gain is calculated on the net book value, that is, the purchase price minus the depreciation taken. After 20 years of depreciation, the book value is close to zero, and the taxable gain amounts to almost the whole sale price. The tax is then 25% (the IS rate in 2026) plus tax on the distribution to partners. The result can be significantly higher than direct ownership would have cost under the private individual capital gains regime (which benefits from duration-based allowances).

Discover how Home Select assists international buyers

SCI under IR vs SCI under IS: the decision table

The choice between IR (income tax) and IS (corporate tax) depends on the property’s use and the ownership horizon.

For a primary or secondary residence, the SCI under IR is almost always preferable. The property is not let (so no rental income to declare), and the capital gain on resale benefits from the private individual regime: progressive allowances from the 6th year of ownership, full income tax exemption after 22 years and full social contributions exemption after 30 years.

For a long-term rental investment (over 20 years), the SCI under IS is worth considering if the aim is to retain rental income within the company rather than distribute it. If the aim is to resell in the medium term (under 15 years), the SCI under IR is generally more advantageous thanks to the duration-based allowances on the capital gain.

A tax adviser specialising in non-resident property law can model both scenarios with your actual figures, an exercise we always recommend before any decision.

Who benefits from the SCI, and who does not

The SCI suits several situations: an unmarried couple (including civil union partners) who want to secure each party’s rights, a family planning an intergenerational transfer, an investor holding or planning to hold several properties in France, and partners buying together with clear governance rules.

The SCI is not appropriate for a married couple under community property buying their primary residence. Here, direct ownership offers the same wealth protections (the surviving spouse benefits from full inheritance tax exemption) without the SCI’s running costs. Nor does it suit a straightforward purchase with no estate planning or multi-ownership aim: the annual management fees are not justified.

The specific case of American residents: FATCA

The FATCA regulation (Foreign Account Tax Compliance Act) requires French banks to report to the American tax authorities accounts held by US citizens or residents, including the accounts of companies in which a partner is American. In practice, several French banks simply refuse to open accounts for SCIs with a FATCA-subject partner. The refusal has nothing to do with the legality of the operation, but with the compliance cost the bank does not wish to bear.

The banks that accept these applications are known: HSBC France (used to international clients), BNP Paribas through its international network, and certain private banks. The account opening takes longer: allow 4 to 8 weeks against 2 to 3 for a standard application. Our property hunters always point American clients to the right banking contacts to avoid obstacles during the transaction.

Creating an SCI from abroad: the procedure

Creating an SCI can be done entirely remotely. The procedure has five steps. Drafting the articles is handled by a notaire or lawyer, costing 800 to 2,000 euros for bespoke articles. Depositing the share capital (one euro minimum, but 1,000 euros is recommended for banking credibility) requires a temporary bank account. Registration with the RCS (Trade and Companies Register) takes 5 to 10 business days. Publishing a legal announcement costs 150 to 250 euros. Finally, obtaining the Kbis (company registration certificate) completes the process.

The whole process takes 3 to 6 weeks, a timeline compatible with a property purchase if you plan ahead. At Home Select, we recommend starting the SCI creation as soon as the decision to buy is made, before you even find the property, so that the company is operational by the time you sign the preliminary sales agreement.

Our experience of over 1,200 mandates has taught us that the question of how to structure the purchase comes up early and deserves a considered answer. The SCI is neither a magic formula nor a needless complication: it is a wealth vehicle whose usefulness depends on your personal, family and tax situation. What we know, after helping buyers of more than 30 nationalities, is that the right structure chosen before the purchase is far better than a costly restructuring afterwards, and that a notaire specialising in international law is your best ally in this decision.

Let’s discuss your Paris purchase project and its structuring

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