Moving to Dubai: can you keep your French company?
Summary
Introduction
Yes, you can keep your French company after moving to Dubai: there is no rule requiring you to sell or dissolve a French entity when transferring your residence. The real issue isn't ownership of the shares, but rather where the company is managed and the remaining weight this entity carries in your overall financial situation.
This nuance is crucial. A French company passively owned by an Emirati resident remains a French company, taxed in France, without hindering your expatriation. However, the same company managed on a daily basis from the Emirates risks a reclassification of its effective management headquarters , and sometimes even the maintenance of your French tax residency.
France and the United Arab Emirates are bound by a tax treaty signed in 1989, which establishes rules for determining tax residency when two states claim the same residence. This treaty does not eliminate French taxation of income from French sources; rather, it organizes the allocation of taxing rights between the two countries.
This article examines the six key issues to consider before deciding the future of your company: residency criteria, territoriality of corporate tax, governance, taxation of capital flows, exit tax, and structuring scenarios. The thresholds mentioned are public guidelines, and the answer applicable to your specific case will depend on your individual circumstances .
Keeping your French company: what's allowed, what's risky
French law does not make the ownership of shares or shareholder status contingent upon the tax residency of the holder. A non-resident can own all of a French SARL, SAS, or holding company, receive dividends, and participate in general meetings without any particular difficulty. Expatriation therefore does not trigger any obligation to sell one's shares , contrary to a widespread misconception.
What does change, however, is how this company is viewed in the analysis of your tax residency. The tax authorities are not asking whether you have the right to maintain it, but whether this entity still connects you to France within the meaning of Article 4 B of the French General Tax Code (CGI). A minority shareholder in a family business does not carry the same weight as a director who remains the key figure and the main source of income for the company.
Many executives confuse two very different operations: maintaining a French company while living in Dubai, and actually transferring operations to the Emirates. The latter involves a business relocation project to Dubai and requires moving human and material resources; the former leaves the French entity in place, with its own obligations and tax status.
Ownership of shares and effective management: two separate issues
Ownership is a simple legal fact, enforceable and easily documented by a securities register. Effective control, on the other hand, is a matter of fact assessed after the fact : who signs, who decides, who negotiates, and from which territory. The two can be separated, and it is precisely this separation that makes some expatriations solid and others fragile.
A partner based in Dubai who entrusts management to a third party residing in France is in a straightforward situation. However, the same partner who retains bank signing authority, arbitrates quotes, and manages teams via videoconference from the Emirates leaves behind a series of contradictory indicators , regardless of how the company's articles of association are worded.
Article 4 B of the French General Tax Code: Can the company detain you in France?
Article 4 B of the French General Tax Code (CGI) lists four criteria for tax residency, and it's important to remember that these are alternative: only one is needed to establish you as a French resident . The home, the principal place of residence, the principal professional activity, and the center of economic interests operate independently of each other.
This structure explains why the 183-day rule alone solves nothing, as we explained in our article on the 183-day rule and tax residency in Dubai . An executive can spend ten months a year in the Emirates and remain a French resident if their main professional activity or economic interests remain in France.
The same reasoning applies to other ties maintained after leaving, starting with housing, a topic we addressed in our article on keeping French housing after expatriation . The social connections maintained are analyzed in exactly the same way: they are not forbidden, they are carefully considered.
The center of economic interests, the most underestimated criterion
The center of economic interests refers to the place where you have made your main investments, where you manage your assets, and from where you derive the majority of your income . A French company that represents the bulk of your business assets and annual cash flow carries significant weight in this analysis.
The assessment is comparative: the tax authorities weigh what you own in France against what you have built in the Emirates. Maintaining a small French company alongside a real and profitable Emirati business does not present the same issue as maintaining one that concentrates the bulk of your income . It is the proportion, much more than the existence of the business itself, that tips the scales.
This weighting is prepared before departure, not the following year. Tax optimization strategies in Dubai only take effect if the economic center of gravity truly shifts towards the Emirates, which often implies reviewing the role of the French company within the overall portfolio.
Where is French society taxed after your departure?
French corporate tax operates on a territorial principle: profits from businesses operating in France are taxable in France, regardless of the partners' residence. Therefore, your move to Dubai does not change the company's tax status or its reporting obligations.
The company continues to file its tax return, pay corporate income tax at the applicable rates, and collect and declare VAT. It retains its SIREN number, its registry office, and its annual accounts. The only immediate change concerns the address of the director or partner, which must be updated with the registry and the relevant organizations.
Territoriality of corporate tax and place of effective management
The reasoning becomes more complex when the company no longer has any actual operations in France and all decisions are made from Dubai. The concept of the effective management seat, adopted by OECD-type conventions, then allows the entity to be linked to the territory where strategic decisions are made .
In the France-UAE direction, this mechanism rarely works in your favor. A company registered in France but managed from Dubai remains French by virtue of its registration, and the French tax authorities have no reason to waive taxation; the UAE authorities, for their part, may consider that the entity establishes a taxable presence on their territory. The risk, therefore, is not the absence of taxation but rather poorly managed double taxation .
The Franco-Emiratitax treaty provides mechanisms for eliminating this double taxation, but their implementation requires precise documentation of the flows and decision-making bodies. It allocates the right to tax between two coherent states; it does not correct a flawed structure.
Managing from Dubai: the most frequent breaking point
This is where most of the issues are resolved. Keeping the company is neutral; continuing to manage it from abroad is not, neither for the entity nor for you. A director who retains their French corporate office while residing in Dubai faces two challenges: the potential connection of their primary professional activity to France, and an open debate about the company's management location.
The difficulty is all the more real because the evidence is easy for the authorities to gather. Connection timestamps, contract signing locations, IP addresses, airline tickets, and bank statements paint a picture that the company's bylaws alone cannot refute . The legal structure systematically gives way to the facts.
Management, corporate mandate and delegation: governance options
Three scenarios are frequently discussed. The first involves resigning from the position and appointing a director residing in France while retaining the shares: this is the most transparent solution for the administration , provided that the new director actually manages the company. The second scenario maintains the remote management structure, which implies fully engaging with the debate surrounding the location of the company's operations.
The third approach relies on broad delegation to a French operational management team, with the expatriate partner only participating in general meetings. This approach works if the delegations are documented, dated, and followed through , with minutes that accurately reflect the decisions made. Superficial governance produces the exact opposite of the desired effect in the event of control.
None of these options is inherently better: they address different situations of shareholding, size, and activity. The choice depends on the role the French company will play in your future organization, and only an individual analysis can determine the best approach .
Dividends, salaries and current accounts after expatriation
Once you become a non-resident, the income you derive from your French company remains French-source income. Dividends paid to a non-resident shareholder are subject to withholding tax as stipulated in Article 119 bis of the French General Tax Code (CGI), the domestic rate of which may be reduced by the applicable tax treaty .
Withholding tax and the France-Emirates agreement
The Franco-Emirati tax treaty provides for reduced rates on dividends, subject to proof of Emirati residency. This is precisely the purpose of the tax residency certificate issued by the Federal Tax Authority: it allows the distributing company to apply the treaty rate rather than the domestic tax rate. Without this document, the higher rate applies by default.
Corporate officer compensation follows a different logic, linked to the location where the duties are performed. A director who effectively works from Dubai and is paid by a French company creates a situation that must be carefully documented, as the tax treaty allocates the right to tax based on the actual location where the duties are performed , not the employer's registered office.
The shareholder's current account also warrants careful scrutiny. The interest it generates constitutes French-source income subject to its own regulations, and while a current account repayment is not taxable income, it must be traceable . Many audits are triggered by poorly justified transactions between the French company and the executive's Emirati accounts.
The exit tax on the shares of your French company
Keeping your company does not exempt you from the exit tax . This measure targets unrealized capital gains on securities held at the time of the transfer of residence, when the taxpayer has been a French resident for at least six of the previous ten years and holds a significant securities portfolio.
Two alternative thresholds are commonly cited: a total securities value of around €800,000, or a stake of at least 50% in a company's profits. These amounts are publicly available and should be verified on the exact date of your departure, as the thresholds change with finance laws .
In most cases, this mechanism does not result in immediate taxation. A deferral of payment applies, either automatically or upon request depending on the country of destination, and the tax may be waived after a holding period that varies according to the value of the securities. Form 2074-ETD formalizes the declaration, and its filing is a prerequisite for benefiting from the deferral .
The key issue lies in the timing. A departure followed by a rapid sale raises eyebrows, as it suggests that the purpose of the expatriation was to facilitate the sale, a ground on which abuse of rights can be invoked. Conversely, a company retained long-term after departure sends a significantly more positive signal than one sold immediately following the relocation.
Structuring scenarios and tax implications
No single configuration is universally suitable: each one is tailored to a specific business-asset combination. The table below summarizes the most common scenarios and the main risk associated with each .
Scenario | Company taxation | Main risk |
Shares retained, manager residing in France | French standard tax | Low if governance is documented |
Shares retained, management exercised from Dubai | Effective management seat discussed | Reclassification of headquarters in France |
Company that has become a passive asset holding company | French corporate income tax on financial products | Center of economic interests maintained |
Securities contributed to an Emirati structure | Contribution schemes to be examined | Exit tax and abuse of rights |
Company sold just before departure | Capital gains taxable in France | Determining transfer schedule |
French company put on hold | Reporting obligations remain in place | Questionable usefulness, no substance |
This table obviously does not preclude a case-by-case examination. Two leaders with seemingly identical structures may fall under different scenarios depending on their family composition, the location of their clients, and the reality of their presence in the Emirates .
The same trade-offs arise elsewhere, albeit with different parameters: tax relocation to Portugal follows a European logic, relocation to Andorra to immediate geographical proximity, and relocation to Panama to a territorial approach to taxation. The reasoning regarding the retained French company remains comparable; only the tax rates and treaty provisions differ.
The mistakes that turn a preserved company into a risk
The first mistake is to keep the company without changing anything else. A manager who retains his mandate, his bank signature, his French address and his sole source of income in France has moved without expatriating, and the case does not withstand an audit .
The second mistake is symmetrical: stripping the company of all substance to make it discreet, without actually shutting it down. An artificially maintained shell continues to generate reporting obligations, incurs maintenance costs, and provides no tax benefits; on the contrary, it draws attention to a poorly conceived organization .
The third issue concerns the blurring of lines between financial flows. Paying personal expenses in the UAE from the French company's account, or vice versa, obscures the boundary between the two assets and fuels the debate about where the business is managed. As we emphasized in our article on the termination of French tax residency , traceability is worth more than any declaration of intent.
The fourth mistake, finally, is deciding on a scenario based solely on a forum or a similar case. The criteria in Article 4B are alternative; the convention applies on a case-by-case basis, and the exit tax depends on specific, time-bound thresholds. Only an individual analysis can determine what your French company can do without jeopardizing your expatriation.
Testimony from an executive based in Dubai
An executive of a French IT services company, based in the Emirates for just over two years, describes a two-stage decision-making process. "I was convinced I had to sell my SAS (simplified joint-stock company) before leaving," he explains. "I was shown that the real issue wasn't share ownership but operational management ."
He retained his shares and appointed a managing director residing in France, with written delegations of authority and quarterly reports. "For the first two years, I was very rigorous about the minutes and the strict separation of accounts," he continues. "It's tedious, but it's exactly what I was asked to provide when I applied for my tax residency certificate ."
He finally emphasizes a methodological point. "The hardest part wasn't leaving, but accepting that my French company would become a shareholding and no longer my day-to-day business." This account remains a specific case and in no way prejudges the treatment applicable to other situations.
Frequently Asked Questions
Should you sell your French company before moving to Dubai?
No, there is no obligation to sell, and a non-resident can freely hold French securities. The relevant question is whether this company continues to connect you to France through your income or business activities, and whether you retain control of it . The answer depends on your personal circumstances.
Is it possible to remain the manager of a French SARL while living in Dubai?
It is legally possible, but it is the most exposed configuration. Exercising a corporate mandate from the Emirates feeds both the criterion of main professional activity and the debate on the effective management seat, which requires particularly solid documentation .
Will the dividends from my French company be taxed in France?
Yes, these are still considered French-source income and are subject to withholding tax under Article 119 bis of the French General Tax Code (CGI). The Franco-Emirati tax treaty may reduce this rate, provided a valid Emirati tax residency certificate is submitted.
Does maintaining a French company prevent one from obtaining an Emirati certificate?
No, the certificate is assessed based on your presence and situation in the Emirates, not on your foreign holdings. In practice, an application demonstrating genuine Emirati activity and documented physical presence is viewed more favorably.
Can my French company be considered as being managed from Dubai?
This is the central risk when all decisions are made in the Emirates. The connection is assessed based on facts, and such a reclassification does not eliminate French taxation: it primarily creates double taxation that must be resolved .
Should the company be put on hold rather than kept active?
Placing the entity in dormancy does not eliminate reporting obligations or costs, and it deprives the structure of any economic justification. It only makes sense as a transitional step towards dissolution or resumption, and never as an indefinite interim solution .
Conclusion
Maintaining your French company after relocating to Dubai is perfectly possible, and often the simplest solution. Everything then depends on two variables: the proportion of your income that this company represents, and the territory from which it is managed .
The thresholds and rates mentioned here are publicly available data that should be verified on a case-by-case basis, and the balance to be found depends entirely on your business, your family, and your assets. Only an individual analysis can determine the best course of action, and this is what separates a company that can be maintained with peace of mind from one that becomes the weak point in your financial situation .
Are you considering relocating to Dubai while maintaining your French company and seeking the right balance between ownership, governance, and taxation? You can request a personalized study from Coreway Consulting to secure every aspect of your organization.
