Société Civile Immobilière in France: Implications for non-residents

What is an SCI?

An SCI is a popular company structure in France for managing real estate. The shareholders can be either individuals or legal entities. This structure is often chosen to overcome the disadvantages of joint ownership and to anticipate the transfer of property.

If the SCI is subject to income tax, the company is fiscally transparent. This means that the partners are personally taxed on the profits according to their share in the SCI. However, when the SCI carries out commercial activities, it will be subject to corporate tax.

Implications for non-residents of France

For non-residents of France, it is important to know that Belgium does not currently recognize the fiscal transparency of an SCI. This can lead to a dividend distribution related to the sale of real estate being taxed twice: once in France for the capital gain on the property and once in Belgium as income from movable property.

Although SCIs are popular among the French and are often recommended by French notaries, it is crucial for shareholders who are not French residents to consider the tax implications in their own country.

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