Entrepreneurs: structuring your wealth alongside your business

When you start a business, you build far more than a product or a team: little by little, you also build an estate. And it is from that very moment (the moment of creation) that the first wealth issues crystallise, issues that then keep growing as the business develops and gains value. They are best thought through early rather than improvised.

Tax rewards acting early

One rule is borne out again and again in practice: in wealth matters, time is not a backdrop, it is a variable. Structuring begins with the very first choices, because French tax law attaches decisive consequences to the moment an operation is carried out. Contributing your shares to a holding company before they have gained value lets you defer a still-limited capital gain; doing so once the valuation is already established means crystallising a far more significant deferred gain, with the constraints that come with it. Likewise, passing on a fraction of the capital when the company is worth little costs little; passing on the same fraction after a sharp rise in value comes at a markedly higher cost.

It is the business that produces the value, but it is the way it is held and structured that determines what the director and their family will actually keep.

Three moments

At creation, many parameters are set: who holds what, in what proportions, directly or through a structure. This is the time to consider interposing a personal holding company, which is simpler to set up before than after. It is also when the sharing of capital with the first partners and key people takes shape: a management package designed from the outset, when the shares are still worth little, makes it possible to set a subscription price close to real value and to lay down the conditions of a genuine at-risk investment, two factors that are decisive for the later tax treatment of the gain.

At the time of a fundraising or a capital reorganisation, the founder’s personal interests often cease to be aligned with the transaction. Some windows close as soon as the memorandum of understanding is signed, in particular the prior contribution of shares to a holding company. For a director holding a management package, this is also the stage at which the tax and social-security treatment of the instruments is decided. Since article 163 bis H of the CGI, introduced by the Finance Act for 2025, the gain on the sale of shares subscribed or acquired in consideration for one’s duties is, as a matter of principle, taxed as salary, at the progressive income-tax scale, including a specific 10% employee contribution, a marginal rate that can reach 59%. This principle primarily targets non-qualified instruments, such as leveraged preference shares (“sweet equity”), share subscription warrants (BSA) or ordinary shares. For the statutory schemes, such as free shares (AGA), stock options and start-up share warrants (BSPCE), the acquisition or exercise gain keeps its own regime; only their subsequent sale gain may fall within article 163 bis H. In every case, only the portion of the gain below a cap equal to three times the company’s financial-performance multiple can qualify as a capital gain, subject to the twin conditions of a genuine risk of capital loss and, outside the statutory schemes, a holding period of at least two years.

As a liquidity event approaches, all these topics come into full focus: ownership, reinvestment of the sale proceeds, family organisation, transmission, partial or full liquidity. The main levers (the contribution-disposal, the Dutreil pact or a pre-sale gift) require time and prior planning and cannot be put in place in the weeks before closing.

Four reflexes

Hold your shares through a personal holding company (subject to corporate income tax) rather than directly

Contributing shares to a holding company controlled by the contributor places the capital gain under a tax deferral pursuant to article 150-0 B ter, which allows ownership to be organised without immediate friction. The reinvestment obligation is triggered only if the holding sells the contributed shares within three years: for disposals carried out from 21 February 2026, it must then reinvest at least 70% of the sale proceeds within thirty-six months and hold the reinvestment assets for at least five years. Beyond three years of holding, the deferral is maintained with no reinvestment obligation. The reinvestment must fund an economic activity: acquiring control of an operating company, financing operating assets, or subscribing to eligible funds such as FPCI, FCPR or SLP subject to quota conditions. As the Finance Act for 2026 has narrowed the eligible scope by reference to article 199 terdecies-0 A of the CGI, which excludes real estate activities, pure investment real estate does not qualify; hotel activity remains eligible, but the treatment of para-hotel activity has become uncertain and should be checked against the text applicable at the date of the disposal. The deferral can be carried over on a gift of the holding’s shares, provided the donee keeps them, allowing ownership and transmission to be dovetailed.

Ring-fence the risks

The perimeter exposed to the ups and downs of the business is not meant to include the main home, precautionary savings or investment real estate.

Pass on early, while value is low

Without anticipation, inheritance tax can reach 45% above €1.8 million per child and, in some cases, force a sale to pay the tax. Acting early radically changes the equation. A gift of shares with reserved usufruct (where bare ownership is given to the children while the founder keeps the usufruct) has a twofold advantage: the donor retains control of and income from the shares, and only the value of the bare ownership, lower than full ownership, is subject to gift duties. Carried out while value is still low, it also removes all future growth from the taxable estate, and combines with the €100,000 allowance per child, renewable every fifteen years.

The Dutreil pact amplifies this effect: it reduces the taxable base of a business transmission by 75%. It requires a collective holding commitment of two years, extended, since the Finance Act for 2026, by an individual commitment of six years (eight years in total in practice), together with the exercise of a management role, the exemption now being refocused on professional assets alone. A gift with reserved usufruct remains compatible with the pact, but it forfeits the 50% reduction in duties reserved for full-ownership gifts made before the donor turns 70: the trade-off between the two therefore deserves to be weighed.

Document and date your choices

The prior timing and the economic rationale of the transaction are decisive in the event of an audit; structuring improvised on the eve of a sale exposes you to the risk of abuse of law. For a move abroad, exit tax and tax residence should likewise be addressed in advance.

Starting a business is not only about building an economic asset, it is also about creating an estate. The earlier these matters are anticipated, the more room for manoeuvre remains open when the decisions really count.