Being a UK director of a Ltd Company but living in France

Banking & Financial Tax & Social charges
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Hello/Bonjour!

I have both French and British citizenship and I’m looking to relocate to France with my Ozzie/British wife this summer. We’ve been advised by an accountancy practice who are specialists in French/UK tax that the best set-up for us would be to:

  1. Set up a UK Ltd company for any work we do in the UK or abroad (for me, a combo of Zoom calls in France and on-site work outside of France, for my wife it would purely be Zoom calls in France and the odd meeting in the UK). As we would be directors of our respective UK companies, we could withdraw a small salary each month and pay ourselves a dividend to top up our income. Given the double taxation agreement, we would not be liable to pay french tax or social security charges given we will be doing this in the UK.

  2. Set up as auto-entrepreneurs to cater for any work we do in France. We would pay our social charges and tax in France for any income generated through these french businesses.

  3. Given my wife works in healthcare, it might take time for all of her diplomas / qualifications to be officially recognized by the french authorities (and therefore we will have to wait until this process is done before we can set her up as an auto-entrepreneur). With that in mind, she would be able to access the french healthcare system (if needed) through me, as I am a French citizen and will have a French business.

In summary, ~70% of our projects income would stem from our UK companies. The remainder from our set-up in France. We would be paying UK tax/NI for our UK Ltd Companies, and French tax/social charges for our French equivalents.

This approach was suggested by a professional tax accountancy firm but given the number of posts on expat forums I’ve read that say you can’t run a UK company from France without having to pay French taxes/social charges, I’m beginning to wonder/worry that this advice is somewhat incorrect!?

Any advice, thoughts or suggestions would be most welcome as I’m starting to get a bit stressed out by the whole thing.

Thank you in advance!

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If you’re working in France remotely you are still liable for France social charges . And more importantly so is your employer liable for employer social charges and various admin requirements of France. Your employer being your UK Ltd.

There are quite a few threads on here where this has been discussed fully.

  • RIFT Facebook page has very good info - you’ll need to request to join the RIFT Facebook group

  • Also on Facebook, I’m not familiar with the contents but Strictly Fiscal France is highly recommended and I should think has some related coverage.

France implemented the ‘snooper’s charter’, unlike the UK : so remote work can be detected btw.

A solution I have seen recommended is your company sets up a representative office in France that you can work for, apparently this isn’t too complicated [caveat : relatively, for France], other threads here have covered this setup and how it works with URSAFF that you pay your social contributions through.

You might look into any differing treatment of dividend receipts for tax, in France vs UK.

If you are resident in France then your tax is calculated according to French tax rates and rules wherever your income comes from with few exceptions [such as CGT from sale of UK property, income from rental of UK property, or government (ie government-type job function) pensions paid from the UK]. If you complete the Double Taxation Agreement form then this will stop you being taxed by both countries on the same income but basically for most things if France would tax you more than the UK then France rules will take the higher amount.

If you don’t work in France at all (not even remotely) and you work for a UK co, broadly speaking in the UK on a type of commuter pattern, then you can apply to HMRC to issue an S1 which will exempt you from social charges on your UK income as you’re not doing this work in France.

I don’t think it’s too much of a worry for the sort of UK Ltd it sounds like you will have, but there is also some UK bureaucracy around Foreign Controlled Companies in the UK ie companies registered in the UK but controlled by people resident abroad even if they are British.

Re healthcare it was already not plain sailing for a lot of healthcare types of work to have qualifications recognised across countries and get required permissions to work when we were in the EU. But since Brexit it’s worse so hopefully you will look into this thoroughly if this is in your plan.

It’s doable but the admin level will be high and planning is needed. Bit worried that your adviser thinks you can work in France remotely without paying social charges though as there’s a lot of scrutiny on this here in France and the general view is it would be very unwise to do otherwise.

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Thanks so much for your reply Karen. Much appreciated!

The advisor did actually mention about the S1 – something I forgot to mention in my original post. In terms of French taxes and social security charges, these would be something we’d do via the french “auto-entrepreneur” set-up. We’d also declare all the income we make with our UK companies in the French tax returns but according to this advisor, this income would have already be subject to (UK) tax / NI so would not be eligible for taxation in France.

Honestly, it feels pretty overwhelming as each accountant/professional we’ve spoken to as given us different answers. There are obviously laws and processes in place but each advisor we’ve talked with seems to have they own interpretation on the matters at hand. As such, it’s difficult to make out what’s is legally correct and fiscally best.

Right now, we’re in the US and we’re desperate to get out of the system here and given our kids are young and I have French citizenship, we thought that France would be the best place to raise our children, despite the obvious barriers to entry with the legal/business/admin/fiscal aspects.

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I’d suggest you start with RIFT then circle back to earlier threads here. You will find the advice is always the same and it’s from people who live here and are operating your type of situation.

No you won’t have UK tax deducted if you fill out the Double Taxation form once your main residence is France. (France Tax people have to stamp it then you send it back to UK HMRC or better yet, walk it in if you can as the UK HMRC has monster delays right now.) A UK tax adviser to someone with a Ltd co. is highly likely to suggest a level of PAYE income where there won’t be too much complication from NI (=social charges) as well. You will be taxable in France not the UK for income tax except for very few things such as I mentioned.

I really would suggest you follow up the sources I’ve mentioned as a consistent picture will become clear. For example based on what you said in your initial post the UK will refuse to issue you an S1 and you, and more seriously your UK employer also, will be liable for the entirety of all types of employer and employee French social charges on your UK income as well as your French income. With thought and understanding of the rules you may make different, less costly decisions.

Your income tax will be paid to France not the UK if you are resident here, regardless of which country is paying you, so that’s not in question.

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This looks dodgy to me, if you are a French person living in France and working in France (even if most of your business is outside France) then why wouldn’t you pay taxes and social charges for everything in France.

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Thanks for your advice, very interesting topic.
What if you live full time in France with a european passport and work remote while you are the solo director of your uk limited company?
Thank you in advance for any feedbacks

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I’m sure it’s already been mentioned somewhere… if you are working while physically living here in France… you pay French social charges/taxes whatever…

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I understand but i think dose not apply for the company…possibly for my personal tax as a director.
Obviously I will talk to a professional accountant to be sure I understand and do things correctly
Thank you for your reply

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I meant your remote working would be "liable for French social charges/tax " on any money you receive from that UK company and anywhere else

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It does apply to your employer whether UK or elsewhere. And that’s a serious amount of social charge in addition to the social charges due from you as an employee.

If you are physically in France when you do any work no matter for which company or entity or for yourself, including remote, then French social charges are due from the employer, ie the UK Ltd of which you are an employee (or take Director’s fees)as well as due from you as an employee

Remote work is easy to detect as legally officialdom has complete access.

It’s a question of practicality - after all, you are enjoying social benefits here. If you have an S1 then the country that issued it has agreed to pay France so the social charges issue doesn’t apply to your work but by definition the S1 won’t be issued by that other country if you are in France when you work.

Income tax due to France as you are resident is a separate, additional matter and will be paid by you each year according to your total income from any sources including foreign income eg from working for anyone or yourself remote or otherwise. (slight tweaks on income arising from foreign property and any pension paid by a foreign govt for a govt-functional role)

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Thank you Karen for sharing your knowledge; so basically i can pay the corporation tax of the company in uk but my company has to pay ( me as the only employer ) social charges in France correct ? Or you saying that also the corporation tax of my uk company must be paid in France because I will be living here full time?
Thank you

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The company declares and pays tax on its profits in the UK. The company is what the French call a “personne morale” , ie it’s a separate person from you. I’ve forgotten the word for the same in the UK.

As such France is only concerned with anything that passes from the company to you. ie Director’s fees (if taken but this can have some funny rules in different countries so personally I wouldn’t), dividends if paid to you, anything else paid to you eg by sale or transfer of something the company owns or the liquidation of the company etc, and payments to you as an employee.

Payments to you as an employee are of interest to France if you are resident here as (1) it’s gross income so will count in the amount of your income for the year that France will take income tax on and (2) any work performed by someone who is in France while doing that work comes under French employment rules - technically you’d need a work permit and that work, notably, attracts social charges on what is paid for it. Auto entrepreneur/employer/employee. The “representative office” solution I’ve seen recommended for this - do some Googling on site here, there are quite a few threads around this topic, and RIFT Facebook info is gold and up to date.

This doesn’t cover other things such as how dividends are taxed by each country, abd general regulations governing workers/working in France to which you’d technically be subject, any issues with foreign controlled companies, and my suggestion to ensure that your ownership of share(s) in your Ltd appears somewhere on your Fr tax return. French tax offices do seem to be aware of such structures.

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Cool…I understand a bit more now and make sense…obviously i will do the right thing so i dont have any surprises. Maybe I should call the french tax office and ask directly to them? I spoked to few accountants but seems they are not clear on the subject.
Also I do not really earn a lot and in France like in Uk the first 11000 euro are not taxable for corporation tax I think.
Not sure if I should keep the uk limited company or will be more cost effective to start fresh here as a self employed.
Social charges shouldn’t be too high if you do not earn a lot i guess ?
Do I need a work permit even with my European passport?
Thank you

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do your research before you make any decision.
it’s not just the money, the admin burden in France can do your head in. cf various threads.

also consider how long you will continue the activity, where are you intending to accrue pension contributions look very, very carefully at this. If you’ve got a competent accountant in the UK then they will have a view on this.

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thanks again …I do have a great accountant in uk but I also have to pay a french accountant when i do my declaration? also do i need a work permit with an european passport ?
Not sure about pension…i doubt i will be alive when I reach pension age so I m not worried.
I would like to speak to someone but seems a grey area for everyone.
Speaking directly with french tax office wont be easier you think?
Also if I have to pay tax in France they will deduct what i already paid in uk? Sorry so many questions and i have been looking and researching online but far too confusing and for this sort of thing i find better to talk to someone

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Hey Vero, I’m no expert, and this advice/approach was given to me by this accountancy practice. They affirmed there was nothing dodgy or illegal about this but given it’s such a big decision for us as a family – with potential huge ramifications – I wanted to reach out here to ask what people’s opinions/thoughts were on the matter.

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Hey Pat, I’d suggest contacting a bunch of accountancy firms, both French and British, to find out more. From the conversations I’ve had to date, people have different opinions on the matter and there doesn’t seem to be a general consensus amongst these professionals about how best to set-up and work in France as a Director of a UK company. It’s all rather confusing I have to say!

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If one lives in France, one must be:

Prepared to Declare (to France) everything with financial value… one receives worldwide… every year.
Prepared to Pay (to France) all sorts of Social Taxes, Income Taxes… and Taxes of whatever sort… (and they can/do mount up)

Discussions with French Experts is possibly/probably the best way forward.

Despite all the above, or perhaps because of it… Life in France can be Wonderful… :+1: :wink:

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Hey Ben, I will…thank you

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Nor am I. I am just a French person, I told you how it looks to me.