What is an SCI?
An SCI (Société Civile Immobilière) is a French civil company specifically designed to hold and manage real estate. Unlike commercial companies, an SCI cannot engage in trading activities — its sole purpose is property ownership.
Think of it as a legal "wrapper" around your property that provides flexibility in ownership, inheritance, and management.
Key Benefits for International Buyers
1. Simplified Inheritance Planning
France has strict forced heirship rules (réserve héréditaire) that reserve portions of an estate for children. With an SCI:
- You transfer shares rather than property
- Easier to gift shares progressively over time
- Tax-efficient wealth transfer using allowances
- Avoid forced sale of property to divide among heirs
2. Co-Ownership Made Simple
Buying with partners, family, or friends? An SCI provides:
- Clear governance rules in the statutes
- Defined exit mechanisms
- Protection against disputes
- Flexible profit/loss distribution
3. Asset Protection
An SCI can provide a layer of separation:
- Property held by company, not personally
- Shares can be structured for protection
- Useful for business owners
- Note: Not bulletproof against creditors
4. Tax Planning Flexibility
An SCI offers choices:
| Tax Regime | How It Works | Best For |
|---|
SCI vs Direct Ownership
| Aspect | Direct Ownership | SCI |
|---|
When to Use an SCI
Recommended For:
- Purchasing with multiple parties
- Estate planning for children
- High-value properties (>€500K)
- Properties intended for rental
- Business owners seeking structure
Not Recommended For:
- Primary residence (lose CGT exemption)
- Simple purchase by single buyer
- Short-term ownership (less than 5 years)
- Very low-value properties
Setting Up an SCI
Step 1: Draft the Statutes
The statutes (statuts) define:
- Company name and registered office
- Purpose (real estate holding)
- Capital structure and share distribution
- Management rules
- Decision-making procedures
- Transfer/sale of shares rules
- Duration (usually 99 years)
Step 2: Initial Capital
- Minimum capital: €1 (but not recommended)
- Typical capital: €1,000-10,000
- Capital can be increased later
- Shares distributed among shareholders
Step 3: Registration
Required registrations:
- Publish notice in legal journal (JAL)
- Register with Commercial Court (Greffe)
- Obtain SIRET number
- Open bank account
- Register for taxes
Step 4: Purchase Property
The SCI (not you personally):
- Signs the compromis
- Takes out any mortgage
- Signs the acte de vente
- Becomes the legal owner
Annual Obligations
An SCI must maintain:
| Requirement | Frequency | Cost |
|---|
Tax Considerations
Under IR (Default)
- Rental income taxed at shareholder level
- French social charges (17.2%) on rental income
- Capital gains taxed at shareholder level
- Tax treaty benefits may apply
Under IS (Optional)
- Company pays 15% on profits up to €42,500
- 25% on profits above that
- Depreciation can reduce taxable income
- Different capital gains treatment on sale
Important Warnings
Mortgage Considerations
Banks may require:
- Personal guarantee from shareholders
- Higher interest rates
- Larger deposit
- Specific insurance requirements
Not a Tax Haven
An SCI does not:
- Eliminate taxes
- Hide ownership (disclosed to authorities)
- Avoid French inheritance taxes
- Automatically reduce wealth tax (IFI)
Management Requirements
You must:
- Hold annual shareholder meetings
- Keep proper accounting records
- File tax returns on time
- Update statutes if circumstances change
Our Recommendation
For most international buyers purchasing on the French Riviera:
Consider an SCI if:
- You're buying with family/partners
- You want to plan inheritance for children
- The property value exceeds €500,000
- You plan to rent the property
Stick with direct ownership if:
- Buying alone for personal use
- The property will be your primary residence
- You value simplicity over flexibility
- Short-term ownership planned
Need Expert Advice?
While this guide provides a comprehensive overview, SCI setup requires professional legal and tax advice tailored to your situation. We can connect you with specialist notaires and tax advisors who regularly work with international clients.