There are several legal structures for investing in property, including the SCI (Société Civile Immobilière) and the SAS (Société par Actions Simplifiée). Both offer a more flexible way of operating than the joint ownership system. So which one should you choose? It all depends on your personal situation and how you intend to use the property you have acquired!
HOW DO YOU SET UP AN SAS OR SCI?
First of all, an SCI must have at least two partners. What's more, because it is a non-trading company, an SCI cannot carry on a commercial activity: in other words, you cannot hope to acquire a property with a view to renting it out or selling it immediately.
On the other hand, an SCI can be headed by several co-managers, whereas an SAS can have only one Chairman and several Managing Directors. It is also worth noting that no minimum share capital is required when setting up an SAS or SCI.
WHAT IS THE DIFFERENCE IN TAXATION BETWEEN SAS AND SCI?
As an SAS is a limited company, it is not subject to income tax, but to corporation tax. The amount deducted from profits will depend on the nature of those profits: from €0 to €38,120, for example, the tax rate is 15%, but it increases the higher the profits.
An SCI, on the other hand, is considered to be a partnership, which means that the partners will have to pay income tax directly, at a rate that varies according to a progressive scale. This difference in tax treatment should be taken into account when setting up your company, because depending on the situation, one system may quickly prove more advantageous than the other.
Are you interested in investing in property through an SAS or SCI? Contact our property advisers to find out more about these two legal structures.
