US LLC from France: A Court Compared One to a SAS

0:00Can a French resident own a US LLC?

Camille sells software from Lyon. Her newest customers are in the United States, and some of them want to buy from a US company. So, can she have one from France? As far as America goes, yes. No social security number, and no trip to the US. Cheyenne, in Wyoming, is usually eight hours behind Lyon. We're BaseAcross. We set up US companies for founders outside America, so we'll be straight with you.

The American side is simple. The French questions are how the tax office reads the company, where its business is done, and which accounts you declare. Let's read it, page by page.

0:41Do you need a US company in France?

First, do you need one at all? In France, often not. The big card processor already takes French businesses, so a French company, an S-A-S, gets you card payments too. And an S-A-S is what French banks and the tax office understand. So the reason is usually somewhere else. US buyers or platforms that want a US vendor. Or US investors, who usually want a Delaware C-Corp. Camille has the first reason, so she reads on.

1:14How does France classify a US LLC?

Now the headline. How does France see a US LLC? It compares it with French company forms. France's highest administrative court looked at a California LLC. Its members were liable only up to what they put in, and its operating agreement gave them wide freedom. The court held it was comparable to an S-A-S, and liable to corporate tax by its form. So France may tax an LLC as a company, the way it taxes an S-A-S.

Your operating agreement decides how yours compares. So give your accountant a copy.

1:51Can France tax my US company?

Next page. Can France tax the US company itself? It can. A company formed abroad pays French corporate tax on business carried on in France. That can be through a fixed place of business, a dependent agent, or a complete commercial cycle there. A US company you run from France should have an adviser look at this. And if your French company owns the US one, and the US company pays little tax, a French rule can bring its profits into French tax.

An LLC paying no US tax is one to check. Before you take any money out, ask your adviser how payments to you are taxed.

2:33Wyoming or Delaware, EIN and bank

Then forming it, and that's the quick part. A Wyoming LLC for a business you run yourself, once you know how France classifies it. A Delaware C-Corp if US investors want shares. The company needs a registered agent, an address in that state for legal papers, not where you work. Then the EIN. Without a social security number, it's a paper form to the IRS. And the bank is the easy part here.

One of the US fintech banks takes applications from founders in France, and a multi-currency account can give the company US account details. Another wants a US address for every owner. Each one decides for itself.

3:16Do I declare the US bank account in France?

Now the page most guides leave out. The accounts. Each account abroad you opened, held, used or closed in the year goes on a declaration with your French return. So does one you can operate under a power of attorney. And there's a fine for each one left off. Here's the guide's own example. Camille has a personal account at a US bank, and she signs for her company's two accounts.

Her personal account goes on the declaration. Whether the company's two go on it too depends on how France classifies the company. Her adviser decides. If all three were due and she left them off, the fines would come to four thousand five hundred euros. That's an illustration, not a quote.

4:02The US–France treaty and Form 5472

Last page, the American side. There's a tax treaty between France and the United States, and it's in force. It takes US withholding off interest and royalties, and caps it on dividends. But pay for work you do in France generally isn't US income. So for a services business, the treaty matters less. The company still files a report with the IRS every year, even without sales, and missing it is expensive.

It's usually due in the spring, and there's a form to ask for more time, filed before the deadline.

4:39What to do first

So here's the order. Ask your accountant, your expert-comptable, how France will classify the company, and where its business is done. Then form, then bank. Put the IRS report, the accounts declaration and your French return on one calendar. The full guide, with every source and a checklist for your adviser in English and French, is linked below. And Camille? Before she ordered, she asked her accountant how France would read her LLC.