When setting up a French SCI to buy property, one of the first decisions you’ll face is how to get money into the company. You have two main options: contribute it as share capital (apport en capital), or lend it through a compte courant d’associé (CCA).
Each route has different legal consequences, tax implications, and practical effects — from how easily you can get your money back, to how the SCI is valued for wealth tax purposes, to what happens when you want to sell your shares.
Most experienced investors use a combination of both. This article explains why, and helps you decide on the right balance for your situation.
This is the fourth article in our CCA series. If you’re new to the topic, start with What Is a Compte Courant d’Associé in a French SCI?
Quick Reference: CCA vs. Capital Contribution at a Glance
| Feature | Capital Contribution (Apport) | CCA (Compte Courant d’Associé) |
|---|---|---|
| Legal nature | Equity — you become a shareholder | Debt — you become a creditor |
| Ownership rights | Yes — proportional to shares held | No — no voting rights or ownership |
| Repayment | Not repayable (locked in permanently) | Repayable on demand (unless restricted) |
| Formalities | Statuts, registration, publication | Simple written convention — minimal |
| Interest / return | Dividends (if profits exist) | Interest (subject to TEM cap for IS) |
| Tax deductibility | Dividends not deductible | Interest deductible (conditions apply) |
| IFI (wealth tax) | Included in share valuation | Not deductible from valuation since 2018 |
| Transfer cost | 5% registration duty on share sale | Fixed €125 registration fee |
| Share value effect | Increases share value directly | Does not affect share value |
| Bank credibility | Strengthens equity base | Seen as quasi-equity by some lenders |
What Is a Capital Contribution?
A capital contribution (apport en capital) is the money or assets you put into the SCI in exchange for shares (parts sociales). It forms the SCI’s share capital (capital social) and is set out in the company’s statuts at formation.
There is no legal minimum capital for a French SCI — you could set it at just one euro. In practice, however, the amount matters because it determines each associate’s ownership percentage, voting power, and share of profits and losses.
Capital contributions can take three forms under French law. Cash contributions (apports en numéraire) are the most common, where you simply transfer money to the SCI’s bank account. Contributions in kind (apports en nature) involve transferring a physical asset — most often real property — to the SCI. And contributions in industry (apports en industrie) involve contributing your skills or labour, though these don’t form part of the share capital and are rare in property SCIs.
The key characteristic of a capital contribution is its permanence. Once you’ve contributed capital, you cannot withdraw it. The only ways to recover your investment are to sell your shares, receive dividends from profits, or participate in a distribution if the SCI is wound up.
What Is a CCA?
A compte courant d’associé is a loan from an associate to the SCI. Unlike a capital contribution, it doesn’t give you any additional shares or voting rights — instead, it makes you a creditor of the company.
The CCA is governed by a written agreement (convention de compte courant) that sets out the terms: the amount, whether interest is charged, the repayment schedule, and any restrictions. If no convention exists, the default rule under French law is that the associate can demand repayment at any time.
Importantly, the Cour de cassation has confirmed that there is nothing abnormal about financing an SCI’s property acquisition primarily through CCAs rather than capital (Cass. 3e civ., 21 September 2022, no. 21-11.372). In that case, the tax authorities had tried to treat the CCA-lending associate as the true owner of the property — the court rejected this outright. This is now settled law: CCA-heavy financing is standard practice, widely accepted by courts and tax authorities alike.
The Key Differences That Matter
Getting Your Money Back
This is the most significant practical difference. A capital contribution is permanent — once it’s in, it stays in. A CCA, by contrast, is a debt that the SCI must eventually repay.
For an associate who wants flexibility, this makes the CCA far more attractive. If your circumstances change — you need liquidity, you want to exit the investment, or the SCI has finished repaying its mortgage — you can request repayment of your CCA without having to find a buyer for your shares or go through the formalities of a capital reduction.
That said, CCA repayment can be restricted. A well-drafted convention de compte courant may require advance notice, stagger repayments, or subordinate repayment to certain conditions (such as the SCI having sufficient cash flow). These restrictions are legal and common, particularly when the SCI has a bank mortgage. The Cour de cassation has also recognised that the SCI can temporarily refuse repayment if the CCA balance is uncertain, contested, or the accounts haven’t been finalised (Cass. com., 22 September 2021, no. 19-24.968) — so a clear convention avoids this kind of dispute.
It’s also worth noting that an associate’s right to withdraw from the SCI is independent of their CCA. The Cour de cassation has ruled that the SCI cannot make an associate’s withdrawal conditional on first repaying their CCA (Cass. 3e civ., 12 November 2014, no. 13-16.182). These are two separate legal relationships.
On the capital side, getting your money out requires either selling your shares (which needs approval from other associates under most statuts), withdrawing from the company (retrait — a formal legal process), or the SCI being dissolved and liquidated.
Impact on Ownership and Control
Capital contributions directly determine ownership. If you contribute 60% of the capital, you hold 60% of the shares and — unless the statuts say otherwise — 60% of the voting rights and profit entitlement.
A CCA has no effect on ownership. You could lend the SCI 500,000 euros through a CCA while holding only 1% of the shares. Your voting power and profit share remain tied to your capital stake, not your CCA balance.
This distinction is particularly relevant in family SCIs. Parents can contribute most of the funding via CCA while giving children a larger share of the capital (and therefore ownership). As the SCI repays the parents’ CCA over time — using rental income, for example — the parents gradually recover their money while the children’s ownership stake remains intact.
Formalities and Cost
Setting up a capital contribution requires formal steps: drafting statuts, registering with the RCS (Registre du Commerce et des Sociétés), publishing a legal notice, and depositing the funds before incorporation. If the contribution is in kind (for example, transferring a property to the SCI), a notarial deed is required and registration duties may apply.
A CCA, by contrast, requires almost no formalities. A simple written convention between the associate and the SCI is sufficient. There are no publication requirements, no notarial involvement, and no registration duties on the advance itself.
This difference extends to later changes. Increasing or reducing the SCI’s share capital requires a formal decision by the associates, amendment of the statuts, publication, and a filing with the RCS. Adjusting a CCA balance — lending more or receiving repayment — is an internal matter between the associate and the SCI.
What Happens When You Sell Your Shares
When an associate sells their shares in the SCI, the sale price reflects only the value of the shares — not the CCA balance. The CCA is a separate debt owed by the SCI, and it transfers independently.
In practice, this creates two distinct transactions. The share sale is subject to a 5% registration duty (droits d’enregistrement) calculated on the sale price. The CCA transfer — if the buyer agrees to take it over — is subject to a fixed registration fee of only 125 euros.
This is where the balance between capital and CCA has a direct financial impact. An SCI with 200,000 euros in share capital and no CCA means a share sale at 200,000 euros triggers 10,000 euros in registration duties (5%). The same SCI with 1,000 euros in share capital and 199,000 euros in CCA means only 50 euros in registration duties on the shares, plus 125 euros for the CCA transfer — a total of 175 euros.
The tax saving on transfer is one of the main reasons investors keep the SCI’s share capital low and fund the rest through CCAs.
However, there’s an important trade-off to be aware of on exit. In a notable case from the cour administrative d’appel de Nancy (CAA Nancy, 31 July 1997, no. 94NC01783), an associate held 99% of a low-capital SCI (capital of 10,000 francs) that had purchased a property for 350,000 francs — financed almost entirely by the associate’s CCA. When he sold his shares, he argued the CCA balance should be included in his acquisition cost for capital gains purposes. The court disagreed: CCA advances are not part of the acquisition price of the shares, so only the nominal value of the shares counts. The result was a much larger taxable capital gain than expected. This is a real trap for associates in low-capital SCIs who plan to sell their shares rather than simply being repaid their CCA.
Tax Deductibility of Returns
The tax treatment differs depending on whether funds are contributed as capital or lent as a CCA.
Dividends (the return on capital) are not deductible for the SCI. If the SCI is under corporate tax (IS), the dividend is paid from after-tax profit. If the SCI is under income tax (IR), no dividends are distributed — income flows through to the associates directly.
CCA interest (the return on a loan) is deductible from the SCI’s taxable income, subject to conditions. For an SCI under IS, the interest rate must not exceed the annual TEM ceiling (4.55% for fiscal years closing 31 December 2025). For an SCI under IR, the interest is deductible from property income (revenus fonciers) only if the CCA funds were used for property acquisition, conservation, or improvement — Article 31, I, 1°, d of the Code général des impôts.
It’s also worth noting that not charging interest on a CCA has its own tax implications. For an SCI under income tax (IR), the Conseil d’État recently confirmed that interest-free CCAs in a non-commercial SCI do not fall within the scope of Article 39, 13 CGI on interest-free loans between enterprises (CE, 12 March 2025, no. 474824). But for an SCI that has opted for IS, non-remunerated CCAs are treated as interest-free advances and fall squarely within the rules limiting the deductibility of inter-company aid.
On the associate’s side, both dividends and CCA interest from an SCI under IS are taxed at the PFU rate of 31.4% (since 1 January 2026). The key advantage of CCA interest is that it reduces the SCI’s taxable profit before it reaches the associate — effectively allowing a double benefit when the conditions are met.
IFI (Wealth Tax) Implications
Since the 2018 IFI reform, the treatment of CCAs for wealth tax purposes has changed significantly — and not in the taxpayer’s favour.
Previously, associates could deduct their CCA balance when calculating the taxable value of their SCI shares for wealth tax (ISF). This made a low-capital, high-CCA structure particularly attractive: the shares were worth very little (because most funding was via CCA), and the CCA itself wasn’t a taxable real estate asset.
Under the current IFI rules, CCA loans made by associates to their SCI are no longer automatically deductible from the share valuation. The deduction is only allowed if the associate can demonstrate that the loan was not made with a principally tax-motivated purpose. In practice, this is a high bar to clear, and most commentators treat associate CCAs as non-deductible for IFI calculation.
This means the IFI advantage of a high-CCA, low-capital structure has been largely neutralised. The SCI’s property is valued at market price for IFI purposes regardless of how the purchase was financed.
However, SCI shares can still benefit from an illiquidity discount (décote d’illiquidité) — typically 10% to 20% — reflecting the difficulty of selling shares in a private company compared to selling property directly. This discount applies regardless of the capital/CCA split.
The Common Strategy: Low Capital, High CCA
In practice, most property SCIs are set up with a relatively low share capital — often between 1,000 and 10,000 euros — with the bulk of the funding provided through CCAs from the associates.
This structure offers several advantages. It minimises registration duties on future share transfers. It gives associates the flexibility to recover their funds over time as the SCI generates rental income. It allows interest to be charged on the CCA, creating a tax-deductible expense for the SCI. And it keeps the SCI’s capital structure simple and easy to manage.
The main risk is that a very low capital base can make the SCI appear undercapitalised. Banks may view this unfavourably when the SCI applies for a mortgage, although in practice lenders focus more on the associates’ personal income and guarantees than on the SCI’s share capital. Some banks may ask associates to commit to maintaining their CCA balances for the duration of the loan.
When Higher Capital Makes Sense
There are situations where a higher capital contribution is preferable.
If the SCI is contributing in kind — transferring a property you already own into the SCI — the value of that property becomes the capital contribution. This is common in estate planning, where parents transfer family property into an SCI and then gradually give shares to their children.
If you want to project financial stability to banks, landlords, or business partners, a higher capital figure on the balance sheet can help. While this isn’t strictly necessary for most property SCIs, it can smooth commercial relationships.
If you’re setting up the SCI with associates who have unequal resources, structuring ownership through capital (rather than CCAs) makes the profit-sharing arrangement clearer and less likely to generate disputes.
Practical Tips
Don’t go too low on capital. While one euro is technically possible, a share capital of at least a few thousand euros avoids the perception that the SCI is a shell company. Most notaires and accountants recommend between 1,000 and 10,000 euros for a standard property SCI.
Always draft a CCA convention. Even though a CCA can exist without one, a written agreement protects both the associate and the SCI. It should cover the interest rate, repayment terms, any subordination to bank debt, and what happens if the SCI cannot repay on demand.
Ensure the SCI’s capital is fully paid up. If your SCI is under corporate tax (IS), CCA interest is only deductible if the share capital has been fully liberated. Don’t leave unpaid capital subscriptions on the books.
Think about the exit. If you plan to sell your shares eventually, a low capital / high CCA structure will save you significantly on registration duties. But if you’re planning an estate transfer via gift of shares (donation), a higher capital increases the value of the gift for tax purposes.
Check the IFI impact. Since CCAs are generally no longer deductible from SCI share valuations for IFI, the choice between capital and CCA is less relevant for wealth tax optimisation than it was before 2018. Focus on the other factors — flexibility, transfer costs, and tax deductibility.
Coordinate with your bank. If the SCI has or is seeking a mortgage, the bank may impose conditions on CCA repayment — typically requiring that CCA balances remain in place until the mortgage is repaid or reaches a certain level. Factor this into your CCA convention.
Frequently Asked Questions
Can I convert a CCA into capital (or vice versa)?
Yes. An associate can convert their CCA into a capital contribution by incorporating the debt into the SCI’s share capital. This requires a formal capital increase decision by the associates, amendment of the statuts, and the usual publication and RCS filing. The reverse — converting capital into a CCA — requires a capital reduction, which is more complex and involves additional formalities including creditor protection procedures.
Does a CCA count as an asset I need to declare for tax purposes?
A CCA is a receivable (créance) — it’s money the SCI owes you. It is not classified as a real estate asset for IFI purposes, but it forms part of your general estate for inheritance tax (droits de succession) calculations. For income tax, any interest you receive is taxed as investment income at the PFU rate of 31.4%.
What happens to my CCA if the SCI goes bankrupt?
If the SCI is liquidated, CCA holders are treated as unsecured creditors. They rank behind secured creditors (typically the bank with a mortgage) and any preferential debts (employee claims, tax debts). In practice, if the SCI’s only asset is a property with a mortgage, associates may recover very little or nothing on their CCA balances. Capital contributors fare even worse — they are last in line, after all creditors including CCA holders. There’s a further sting: even if the SCI can’t pay, a CCA-holding associate cannot turn around and pursue their co-associates personally for the debt. The Cour de cassation has ruled that the liability of associates to third-party creditors under Article 1857 of the Code civil does not extend to co-associates who are themselves creditors via a CCA (Cass. com., 3 May 2012, no. 11-14.844).
Is there a maximum amount I can lend to the SCI via CCA?
There is no legal cap on the amount of a CCA. You can lend as much as you want. However, if the CCA balance vastly exceeds the property-related expenditure and the SCI is under income tax (IR), the tax authorities may challenge the deductibility of interest on the excess amount.
Can a non-associate make a CCA to the SCI?
No. By definition, a compte courant d’associé can only be made by someone who holds shares in the SCI. If a non-associate wants to lend money to the SCI, it must be structured as a standard loan (prêt), which is subject to different rules.
Which is better for a family SCI — capital or CCA?
In a typical family SCI, the answer is usually both. Parents often contribute a small amount as capital (giving them shares and voting rights) and provide the bulk of the funding via CCA. This allows the parents to gradually recover their money through CCA repayment while maintaining control through their shareholding. It also keeps the share value low, which reduces registration duties if shares are later gifted to children.
Key Takeaways
Capital contributions and CCAs serve fundamentally different purposes in a French SCI. Capital creates ownership — it determines who holds what percentage and cannot be withdrawn. CCAs create debt — they provide flexible financing that can be repaid, earn interest, and transfer cheaply.
The most common and tax-efficient strategy is to combine both: low share capital to minimise transfer costs, with the balance funded through CCAs for flexibility and deductibility. But the right mix depends on your tax regime, estate planning goals, bank requirements, and how long you plan to hold the investment.
Getting this balance right from the start is much easier than restructuring later — so take the time to consider each factor before signing the statuts.
