Investing in real estate with a holding company and an SCI: the ultimate guide

France, country of art and culture, but also of real estate. Who has never dreamed of investing in a beautiful stone building in the South or a chic apartment on the Croisette? The problem? Funding. However, there is a solution, a financial arrangement that could well change the situation: the combination of a holding and an real estate company (SCI). Through this article, we will dissect the definition of these two entities, their promising marriage and an example of a concrete financial arrangement.

What is a holding company?

A holding is not a legal form, but rather a function. It can be a SASU, an SARL or an EURL. The main role of the holding company is to hold shares in other companies. For example, it can control an SAS specializing in consulting, another in bakeries, or even a restaurant. The diversity of sectors of activity is limitless. And the icing on the cake? The holding company can also hold SCIs.

What is an SCI?

There real estate company (SCI) is a structure whose social purpose is to acquire real estate or assets representing real estate to manage them and earn rent or income from them. It must be held by at least two partners, who can be natural or legal persons. An SCI can hold any type of real estate: a house, an apartment, a building, or even the usufruct of a property.

The promising marriage between a holding company and an SCI

The advantages of combining a holding company and an SCI are numerous. The first is undoubtedly the possibility for the holding company to take a majority stake in the SCI. This allows the holding company to benefit from the tax advantages linked to holding shares in an SCI, while maintaining control over the management of the real estate.

How does the financial package work?

Let’s take the example of an SAS manager who wishes to acquire real estate via an SCI. To finance this purchase, he could consider creating a holding company. The SAS could then send money to the holding company, which, by benefiting from the parent-daughter company regime, would only be taxed at 5% on these dividends. With the remaining money, the holding company could then invest in the SCI. In the event that the rents received by the SCI are not sufficient to repay the real estate loan, the holding company could make up the difference.

The cost of this financial arrangement

The cost of creating a holding company and an SCI depends on the arrangement carried out. For the creation of a simple holding company, count around 470 euros, accountant’s fees included. For an arrangement with transfer of securities, the fees increase, as well as the registration fees. Finally, for an arrangement with a contribution of securities, the cost is higher due to the need to involve a contribution commissioner.

What do you think in the end?

Investing in real estate via a holding company and an SCI is an interesting solution for business managers. Not only does it offer financial advantages, but it also allows you to diversify your sources of income and optimize your taxes. However, this type of arrangement requires good knowledge of company law and taxation. It is therefore recommended to call on an accountant to assist you in this process.