Societe Civile Immobiliere (SCI) - Real Estate Civil Company Registration in France

Real estate civil company in France

The Societe Civile Immobiliere (SCI) or the Real estate civil company in France has a legal form that intends to hold one or more properties of real estate. Therefore, it allows for the tax management and assets of the real estate.

The Societe Civile Immobiliere (SCI) in France is a real estate civil company in France that has the corporate purpose of ownership and management of one or more real estate assets. Therefore, the main activities can be of two types which are the holding of the real estate assets by the SCIs as the primary or the secondary residence and the rental of property which are owned by the company.

This type of company should carry out the civil activity and not carry out the commercial activity. Also, it should have two partners, as it will not be possible to create SCI in France alone. During formation, the latter make contributions and obtain shares in return. Then, the company will hold the real estate assets.

The Societe Civile Immobiliere (SCI) has a statute that will govern its operations. They make it possible to regulate the decision-making methods and designate managers who will be held responsible for the daily management of the company.

Advantages of the Societe Civile Immobiliere (SCI)

If you are interested in incorporating a business in France, then a real estate civil company in France is a good option. The Societe Civile Immobiliere (SCI) will facilitate the transfer and management of real estate assets, which are explained below with more following advantages:

Asset management with SCI

In the real estate civil company in France, the profits and debts will be generated by property which is held by the company and are distributed among partners. Therefore, if work is carried out on the property held then its cost will be assumed by all partners up to the shares held by them.

It is necessary to proceed with the transfer of the property by obtaining at least an agreement of the partners that represent the majority of shares in the company. If there is any disagreement or divergent aspirations, then the real estate partnership will help protect heritage. The liability of the partners is indefinite, and they are not joined by each other.

Transfer of assets within SCI in France 

The advantage of facilitating the transfer of assets is in the real estate civil company in France. If you wish to pass on the transfer of shares of Societe Civile Immobiliere (SCI) to your family, then you can do that successively. You will also benefit from the reduction provided for the direct inheritance tax, which amounts to  €100,000 per child for every donation, which will be renewable every 15 years.

Flexibility

In the Societe Civile Immobiliere (SCI), there is a light legal framework for organizing the society, and there are no minimum initial investment requirements. There are many possible assemblies for real estate partnerships in France.

Taxation

In the Societe Civile Immobiliere (SCI), there is Freedom to choose between the IR that is land income category, or the IS optional which means the IR is by default but the possible option for IS. There is a social system for self-employed workers.

Characteristics of the Societe Civile Immobiliere (SCI)  in France?

The Societe Civile Immobiliere (SCI) is formed by at least two partners who are natural persons who can be adults or not. Wherever it is needed, they will be represented by an adult who can be French or not or the legal entities. The Societe Civile Immobiliere (SCI) was formed to obtain and manage real estate assets, and they cannot be commercial.

The duration of Societe Civile Immobiliere (SCI) can be 99 years, and the legal status of Societe Civile Immobiliere (SCI) does not need minimum capital; therefore, it can be registered with just 1 euro, and also it is probable to create a Societe Civile Immobiliere (SCI) with the variable capital to reduce costs during the increase and reductions.

The taxation of a real estate civil company in France allows the cost generated by the work to be subtracted from the amount of the taxable income that is the amount of annual turnover which is generated by the Societe Civile Immobiliere (SCI).

The Societe Civile Immobiliere (SCI) is considered transparent because the land income produced is distributed to partners that are in proportion to their participation. Also, the Societe Civile Immobiliere (SCI), in principle, is subjected to the income tax (IR) regime. Accordingly, the company doesn't pay the taxes itself. The partners are the ones who will be liable. When a Societe Civile Immobiliere (SCI) is in discrepancy, the amount of the latter will be passed on to the overall tax income of each of the partners, which is up to €10,700/year. 

The Societe Civile Immobiliere (SCI) facilitates the transmission of the assets within the families for the reasons which are as follows:

• As long as children are represented by an adult, they can be involved
• The value transmitted will be based on the net assets, which is when the debts are deducted

The Societe Civile Immobiliere (SCI) permits you to protect yourself from the likely disadvantages that an undivided property can present. If the partner disagrees, then the manager will always be able to decide on operations that are related to the daily management of the company.

Types of Societe Civile Immobiliere (SCI)

There are some different types of Societe Civile Immobiliere (SCI) which are mentioned as follows:

Family SCI

The family SCI is concerned with the members of the same family which will be up to the fourth degree. The major interest lies in the purchase and simplified transmission of the real estate assets to successors from the system of the donation of the shares which will make it possible to avoid or reduce certain taxes.

Rental SCI

The rental Societe Civile Immobiliere (SCI) is usually a long-term investment. Here, the goal is to produce income through the rental of the property. The distribution of rents will be received and divided among the partners.

Attribution SCI

The attribution Societe Civile Immobiliere (SCI) allows you to purchase the buildings within which there are different lots in this case there are apartments that are distributed among partners. After this has been carried out according to each member’s share, the Societe Civile Immobiliere (SCI) is dissolved and every partner will be the owner of one or more apartments.

Construction- sales SCI

The construction sale Societe Civile Immobiliere (SCI) profits from a somewhat special status. Also, a real estate company in France is not allowed to carry out commercial activities, which means that it will not be possible to purchase and resell goods. There is one exception, which is that this model allows real estate professionals to obtain land to build property with the intent to make the sale.

Steps for Real Estate Civil Company Registration in France

For the real estate civil company registration in France and to grant SCI legal personality, you should follow the following steps which are mentioned as follows:

Step 1 – Draft the statutes of Societe Civile Immobiliere (SCI)

For the Real Estate Civil Company Registration in France, the statutes of your Societe Civile Immobiliere (SCI) are the rules that define the workings of your company, how it will operate, and how shares will be distributed among the partners. While you create Societe Civile Immobiliere (SCI), the statutes should be established in writing, in the document that is signed among the parties, which is called a private deed or authenticated by the notary.

The statute of Societe Civile Immobiliere (SCI) is the rule of the game that manages the company, which is how the shares are distributed between the partners, what the nominal value of company shares is, how decisions will be made, etc. It is important to be attentive during the drafting of the statutes. It is possible to modify the Societe Civile Immobiliere (SCI), but it will also need a general meeting and the legal formalities that can be avoided while forming a company. The important information and elements that are necessary to be included in the statutes are as follows:

1. The Societe Civile Immobiliere (SCI) legal form of the company
2. Societe Civile Immobiliere (SCI) identity of the partners
3. Amount of the share capital, nominal value of the shares, and the number of shares
4. The activity period of the company which cannot exceed 99 years
5. The head office address plays a determining role in defining the competent commercial court during formalities of the administration
6. The statutory purpose of the Societe Civile Immobiliere (SCI) should exclude any involvement of commercial under the penalty to expose the company to probable action for nullity

After the statute is drawn up fully, the partners should put their initials on every page of the statute and affix their signatures.

The statutes of your Societe Civile Immobiliere (SCI) are not absolute. After its formation, there is the possibility to adjust them as the company evolves which can be the change of manager, entry or exit of partner, share capital modification, etc.

Step 2- Deposit of capital of SCI

For the process of Real Estate Civil Company Registration in France, the share capital of the Societe Civile Immobiliere (SCI) acts as the financial security for the partners of the company, which helps cover debts in the event of financial difficulties. The capital of the real estate civil company in France is formed of two types of contributions, which are as follows:

• Cash contributions, which are money
• Contributions in Kind can be real estate, equipment, etc., and in this case, it is not compulsory to have the evaluation approved by the contribution commissioner.

In exchange for the contributions the partner gets the shares, that will represent the shares of the ownership in the company. Unlike commercial companies, obtaining the deposit of funds certificate, which confirms that the capital has been put in reserve by a notary or banker, will not be a mandatory condition for your company registration only a partner contribution is needed.

Also, the opening of a bank account to deposit capital is not a legal requirement, and it remains only a recommended step. Most Societe Civile Immobiliere (SCI) opt for this approach as depositing the capital in a bank account provides the advantage of bringing the necessary contributions in one place.

Step 3- Publication of the legal announcement for the creation of SCI

To create your real estate civil company in France, the publication of the legal announcement of the Societe Civile Immobiliere (SCI) incorporation is necessary.

The Real Estate Civil Company Registration in France will involve the circulation of the advertisement in the specialized newspaper, therefore signalling the registration of Societe Civile Immobiliere (SCI). The announcement should be published in the legal announcement newspaper, located in the department where the head office of your Societe Civile Immobiliere (SCI) is present. This formality is subjected to fees. The registration rate for the Societe Civile Immobiliere (SCI) is approximately between 181 euros and 217 euros, which will depend on the department of your company head office.

Step 4- Beneficial owners of Societe Civile Immobiliere (SCI)

During the process of Real Estate Civil Company Registration in France, the Declaration of Beneficial Owners (DBE) focuses on identifying the partners who have direct or indirect control over the Societe Civile Immobiliere (SCI), which in simple terms:

• Persons who own more than 25% of the shares of the company
• Whoever person has control over the executive, administrative, or management body of the company and also over the general meeting of the partners.

You can make this statement by filling out the form on the one-stop-shop website. Usually in most of the cases within Societe Civile Immobiliere (SCI), the beneficial owners are generally the manager who is the natural person. Also, there can be different situations where you should declare at least one person as the beneficial owner. If you can’t identify any specific person then the declaration should include the manager of the Societe Civile Immobiliere (SCI).

Step 5- Submit the SCI registration file on the one-stop-shop platform

After completing all the steps, you should submit the creation file for your Societe Civile Immobiliere (SCI). This is a compulsory step and concerns all entrepreneurs. For the completion of this process, you will have to go to the one-stop shop website where you will be able to submit all your attachments which are mandatory for authentication of the registration file for the completion of the process of Real Estate Civil Company Registration in France.

For your real Societe Civile Immobiliere (SCI) registration file, you will be required to submit the following:

1. Statutes duly certified copy
2. Beneficial owners list
3. The identity document copy of the manager
4. A certificate that confirms the absence of convictions for manager
5. Proof of address where Societe Civile Immobiliere (SCI) is domiciled
6. Confirmation of publication of the declaration of the formation of the Societe Civile Immobiliere (SCI) in a legal announcements journal
7. A certificate that demonstrates the deposit of share capital

After all the necessary documents are collected, then, the electronic one-stop shop for business formalities will take care of sending the files to the administrative and legal authorities that will be accountable for the process of registration. Once all the steps are completed, then, you will get the K-bis extract that will allow you to validate your registration in the national business register and demonstrate the legal existence of your Societe Civile Immobiliere (SCI) that will be the last process for Real Estate Civil Company Registration in France.

How much does the formation of SCI cost?

In all the cases for Societe Civile Immobiliere (SCI), the incompressible costs, which can also differ accordingly for the formation, will be carried out by you or by the professional, which are:

• Publication costs in the legal announcement medium are €185 or €217, which will depend on the department of the head office
• For the declaration of the beneficial owners €21.41
• The registration fees are €66.88
• These costs will be added for the contributions in cash and in-kind for the share capital.

Tax applicable for Societe Civile Immobiliere (SCI)

The Societe Civile Immobiliere (SCI) is subjected to income tax (IR) by default, which differentiates it from commercial companies, which are generally subject to corporate tax (IS). Also, the Societe Civile Immobiliere (SCI) can be optionally subjected to (IS).

The IR in default

In the event this company will be subjected to the income tax the Societe Civile Immobiliere (SCI) will be taxed at the level of the partners. Also, at the end of the financial year, the generated taxable profits by the company will be distributed among the partners which are according to their share capital participation.

In their personal income tax return, each person will proceed to indicate these amounts in respect of property income. If the taxable income for a share is greater than €177,106, then the applicable tax rate will be 45%.

The (IS) optional

The partners can decide to subject the Societe Civile Immobiliere (SCI) to corporate tax, particularly where the method of taxation will be proved more favourable depending on the generated income.

 In the voluntary option for the IS regime, the company should notify the Corporate Tax Service (SIE) in writing of the choice. The new taxation method will take effect in the month following notification of receipt.

The company should declare the taxable profits at the end of every financial year to the SIE to which it reports. A levy rate will then be applied to it based on the annual turnover amount of it.

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Our consultants will form a strategic plan for the establishment and operations of the business, which will depend on your business needs. We will formulate the budget and develop your business's cash flows. We will review the internal processes and conduct business reviews.

Our legal experts will give legal advice on business operations, IP protection, finances, etc. We will draft the necessary legal papers for your business and review and compile the necessary legal paperwork. We will make sure that all the legal and regulatory compliance is duly met. Enterslice is dedicated to streamlining your path to success. Let's start your Real Estate Civil Company Registration in France with us.