Buying Commercial Property in France Through a Company
- 23 mai
- 9 min de lecture
Buying commercial property in France through a company can be an efficient way to hold a shop, office, warehouse, medical practice, restaurant premises or mixed-use building. It can also be much more technical than buying a holiday home, because the buyer must choose the right structure, understand the bail commercial (commercial lease), check VAT, financing, tax filings and the notarial deed.
Foreign investors often ask whether they should buy through an SCI, a French operating company, a foreign company or in personal names. There is no universal answer. The right structure depends on who will use the premises, whether the property will be rented to a business, whether VAT recovery matters, whether the property is part of a trading business, and what happens on resale or succession.
This guide explains the main points in plain English. For broader SCI foundations, read Creating an SCI in France: Step-by-Step Guide. If you need a notaire for a commercial purchase, FrenchNotaires can match you with a bilingual notaire, free of charge, usually within about 48 hours.
In this guide
What counts as commercial property?
Commercial property in France can include shops, offices, warehouses, industrial premises, clinics, restaurants, hotels, workshops, business parks and mixed-use buildings. The legal issues differ depending on whether you are buying the walls only (murs commerciaux), a business as a going concern (fonds de commerce), or both.
Buying the walls means acquiring the real estate. Buying a fonds de commerce means acquiring a business asset: clientele, trade name, lease rights, equipment and other business elements. A company can buy one without the other. Your notaire will clarify what is included in the transaction before the preliminary agreement is signed.
For foreign buyers, this distinction is essential. A shop with a tenant under a long commercial lease is an investment property. A shop that you will occupy through your own French business is both a real-estate and operating decision. A hotel, restaurant or furnished tourist property can add regulatory and VAT complexity.
Why buy through a company?
Company ownership may be useful where the property is linked to a business, several investors are involved, or the buyer wants to separate the commercial asset from personal ownership.
Common reasons include:
Asset separation: the company holds the premises separately from personal assets or from another operating business.
Shared investment: several shareholders or associates can own the company in agreed proportions.
Financing: income, rent and guarantees can be structured around the company.
VAT planning: commercial premises may allow VAT options in some cases.
Future sale: the owner may later sell the property, the shares, or the business, depending on the structure.
Succession or group planning: shares may be easier to organise than direct real-estate fractions.
The disadvantage is that a company adds filings, accounts, governance, banking, tax decisions and sometimes more expensive advice. If the purchase is simple and personal, company ownership may be excessive.
SCI, operating company or foreign company?
The most common question is whether an SCI is suitable. An SCI is a civil real-estate company. It is often used to own property and rent it out, including professional or commercial premises, but its purpose should remain civil. It is generally not the right vehicle for active trading.
If the property will be used by an operating business, you may see two structures: an SCI owns the walls and leases them to the operating company, or the operating company buys the premises directly. Each route has tax, accounting, financing and risk consequences.
Structure | Typical use | Main caution |
SCI | Holding and renting real estate, often with family or investor associates. | Not designed for active commercial trading; tax regime must be checked. |
French operating company | Business uses the property for its own commercial activity. | Property becomes part of operating risk and business accounts. |
Foreign company | International group or investor already has an existing entity. | French tax registration, financing, beneficial ownership and notarial due diligence can be heavier. |
Personal ownership | Simple investment or owner-occupied professional premises. | Less separation between personal estate and commercial asset. |
Before choosing, ask your notaire and tax adviser to compare income tax, corporate tax, VAT, capital gains, wealth tax exposure, accounting cost and resale options.
Purchase steps and the notaire
The notaire handles the authentic deed and legal transfer of ownership. For commercial property, due diligence is often broader than for a residential purchase.
A typical process includes:
Define the buyer structure before making a binding offer.
Check the property title, planning status, use and diagnostics.
Review existing leases, tenant rights and rent history.
Sign a preliminary agreement if appropriate, with conditions for finance, corporate approval and due diligence.
Organise financing, company documents, bank transfers and beneficial-owner information.
Check VAT and registration-tax treatment before completion.
Sign the final acte authentique before the notaire.
If the buyer company is not yet incorporated, timing matters. The notaire will need to know whether the company can sign, whether a person signs on behalf of a company being formed, and how commitments will be taken over after registration.
The bail commercial
If the commercial property is already rented, the lease is a core asset. Entreprendre Service Public describes a commercial lease as a contract for premises in which a commercial, industrial or craft activity is carried on. The tenant normally operates a business in the premises and pays rent to the owner.
The bail commercial regime is protective. It often gives the tenant stability, renewal rights and specific rules on termination, rent review, permitted activity and compensation if renewal is refused. A buyer of the walls must understand that buying the property does not mean immediate freedom to occupy or change the tenant.
Check the following before buying:
the lease duration and renewal date;
the rent, indexation and arrears position;
the permitted activity (destination des lieux);
tenant registration and solvency;
charges, taxes and repair allocation;
works already done or planned;
assignment and subletting clauses;
any tenant pre-emption or preference rights.
Service Public Entreprendre also notes that the commercial lease or an annex must include a precise and limited inventory of charges, taxes and fees, with their allocation between landlord and tenant. Without a precise inventory, the landlord may not be able to recharge costs to the tenant.
VAT and commercial premises
VAT is one of the biggest traps in commercial property. It can affect the purchase price, works, rent, cash flow and future resale.
Impots.gouv.fr explains that an SCI owning professional premises can ask to subject rent to VAT. The request is made by letter to the relevant business tax office (Service des impôts des entreprises, SIE), and the option starts on the first day of the month of the request. If the tenant is not VAT-liable, the lease must mention the VAT option.
BOFiP guidance explains that the option concerns bare premises rented for the needs of a professional activity and that residential premises remain outside this option. The option is usually analysed by building or group of premises, not as a vague global choice.
In practice, VAT can be favourable if the owner can recover input VAT on acquisition or works and the tenant can recover VAT on rent. It can be painful if the tenant cannot recover VAT, because rent becomes more expensive. Do not sign a lease or purchase deed before the VAT treatment is confirmed.
Costs, fees and taxes
Notaires de France explains that acquisition costs, often called frais de notaire, are mostly taxes and registration costs collected by the notaire and paid to public authorities, plus the notaire's regulated remuneration and disbursements.
For commercial property, costs vary depending on whether the property is new or old, whether VAT applies, whether the transaction is a real-estate sale or a share deal, and whether additional guarantees or corporate documents are needed.
Your budget should include:
the purchase price;
acquisition costs and registration taxes;
notarial fees and disbursements;
agency fees if applicable;
VAT where applicable;
bank fees, guarantee costs and valuation fees;
company formation or corporate documentation costs;
works, compliance upgrades and professional insurance.
For a foreign buyer, exchange-rate risk and timing of funds transfer should also be included in the budget.
Financing and guarantees
Commercial property financing is more document-heavy than a residential mortgage. A bank will review the buyer company, shareholders, business plan, leases, rent coverage, property value, guarantees and tax status.
If an SCI buys the property and leases it to an operating company controlled by the same owners, the bank will look at both entities. It may ask for personal guarantees from shareholders or associates, a mortgage over the property, assignment of rent or other security.
If the company is foreign, the bank and notaire may require company extracts, certificates of good standing, constitutional documents, proof of authority to sign, beneficial-owner information and translations.
Due diligence checklist
Before buying, ask for and review:
title documents and land registry information;
planning and permitted use of the premises;
co-ownership rules if the property is in a condominium;
commercial lease, amendments and rent-payment history;
inventory of charges, taxes and works under the lease;
diagnostics, asbestos and energy performance documents where applicable;
fire, accessibility and safety compliance for public-facing premises;
VAT status of the sale and future rent;
environmental issues for industrial or workshop premises;
corporate approvals for buyer and seller.
Commercial property is not only about square metres and yield. A low price can hide a weak lease, expensive works, an unsuitable use, a tenant dispute or a tax issue.
Foreign-owner issues
Foreign investors should coordinate French notarial advice with accounting and tax advice in their own country. Commercial property can affect income tax, corporate tax, VAT, capital gains, wealth tax, financing deductibility and estate planning.
Key cross-border questions include:
Will the buyer be a French company or a foreign company?
Will the foreign company need French tax registration?
Can the lender finance a foreign-owned vehicle?
Who has authority to sign for the company?
Will company documents need apostille or legalisation?
How will rental income be reported in France and abroad?
What happens if shares in the buyer company are sold later?
A bilingual notaire helps you understand the French deed, but separate tax advice may be needed for VAT, corporate tax or home-country reporting.
Buying commercial premises through a company?
FrenchNotaires can connect you with a bilingual notaire who handles company-owned property purchases, SCI structures and cross-border documents. Speak to a Notaire.
Frequently Asked Questions
Can a foreign company buy commercial property in France?
Yes, in principle. The notaire will need corporate documents, proof of authority to sign, beneficial-owner information and sometimes translated or legalised documents. French tax registration and banking should be checked early.
Is an SCI suitable for commercial property?
An SCI can hold and rent commercial or professional premises, but it should remain a civil real-estate holding structure. If the activity is active trading or furnished commercial operation, another structure or tax regime may be needed.
What is a bail commercial?
A bail commercial is a commercial lease for premises used for a commercial, industrial or craft activity. It gives the tenant specific protections, including rules on renewal, rent review and termination.
Can rent on commercial premises be subject to VAT?
Yes, in some cases. Impots.gouv.fr explains that an SCI owning professional premises can opt to subject rent to VAT by writing to the relevant SIE. If the tenant is not VAT-liable, the lease must mention the option.
Does the notaire check the commercial lease?
The notaire reviews documents needed for the sale, but commercial lease risk can be detailed. You should ask the notaire, and sometimes a lawyer or accountant, to review rent, charges, renewal rights, permitted activity and tenant obligations.
Are acquisition costs different for commercial property?
They can be. Costs depend on whether the property is new or old, whether VAT applies, the legal structure and the nature of the transaction. The notaire will provide a completion statement before signature.
Can the buyer company recover VAT on the purchase?
Possibly, but only if the VAT rules support it and the company carries out VAT-taxable activity or has made a valid option where permitted. This must be checked before signing, because the cash-flow effect can be significant.
Should the operating company own the property?
Not always. Some owners prefer an SCI or property company that leases the premises to the operating business. This can separate the real-estate asset from trading risk, but it adds inter-company lease, tax and accounting issues.
Speak to a notaire before buying commercial property
Commercial property purchases should be structured before the offer becomes binding. FrenchNotaires can match you with a bilingual notaire within 48 hours. For commercial property in the capital, you can also start from Notaire Paris.
Related guides
Sources
This guide is for general information only and does not constitute legal or tax advice. For your specific case, speak to a French notaire; FrenchNotaires can match you with a bilingual notaire within 48 hours.