Posted by admin in Property Investment | September 12th 2005

What is an SCI?

The Societe Civile Immobiliere is a fully incorporated company, whose registered office must be in France – this can be the property itself. Alternatively, the SCI can be domiciled at an administrative office in France. An SCI can be used to purchase either a property or land which will subsequently be built upon.
The property or land is owned by the company and the shareholders own shares in the SCI.
Shareholders can be resident or non-resident in France.

Flexibility of the structure
Property ownership can be structured for foreign residents, enabling them to hold shares via a transparent company, thus their home in France becomes part of their estate in their own country.
The net worth of the property can be reduced for tax purposes by way of debt. Large flexibility when establishing the statutes of the company allows them to be adapted a according to the objectives of the shareholders: transfer of assets, protection of the surviving spouse, property rental …..

Inheritance Law, protection of the surviving spouse
Upon death, the applicable law is that of the country where the property is situated. This is not the case when the property is owned through an SCI, in which case the applicable inheritance law will be that of the home country, constituting an efficient solution to inheritance problems.

Transfer of the property
An SCI allows the partial transfer of the property to one’s children whilst protecting the interests of the surviving spouse. It is simpler to distribute the shares of an SCI between heirs, rather than dividing the ownership of the property.
An SCI can be set up with parents and children associating the latter to the project. A majority shareholding in the SCI ensures that the parents maintain control of the company and eventually, the income from it.
The transfer of shares in an SCI is less costly than the transfer of a property held directly.

The expenses
Irrespective of the property purchased, the purchaser must pay notary fees. Provisions must also be made for the registration expenses as well as the running costs.
Constitution of an SCI incurs no additional notary fees.

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