Estonian Company Run from France: Tax Residence

Many French entrepreneurs form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from France. That works, but French corporate tax does not look only at where a company is registered: France taxes the profits of businesses operated in France, and when a company's registered seat is fictitious, the French tax administration looks at its real seat — where its management, administration and control are in fact concentrated. France's rules on foreign entities with a privileged tax regime can also reach a French owner. The tax treaty between Estonia and France then has its own rule for a company both countries count as resident. This guide sets out these rules with the official texts, and what we do on the Estonian side.

The guide is general information, not tax advice. How your company and you are taxed depends on the facts of your case; ask a French tax adviser (expert-comptable or avocat fiscaliste) before you form or buy the company. We read the official bulletin of the French tax administration, the Bulletin officiel des finances publiques (BOFiP), which explains the Code général des impôts (CGI) — BOI-IS-CHAMP-60-10-10 (published 27 June 2014), BOI-IS-CHAMP-60-10-20 (12 September 2012), BOI-RPPM-RCM-10-30-20-10 (6 June 2023) and BOI-IS-BASE-60-10-20-20 (10 June 2026) — and the treaty in the English text published by the Estonian Ministry of Finance (the convention is authentic in Estonian and French), on 21 October 2026. The English wording below is our translation.

In Estonia: an Estonian company is Estonian

A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.

In France: where the business is operated, and the real seat

Territoriality. Under article 209, I of the CGI, the place where a business is operated determines in principle the taxation of profits liable to corporate tax: companies whose seat is outside France are, whatever their nationality, taxable in France on the profits from their businesses operated in France (BOFiP, BOI-IS-CHAMP-60-10-10, § 50).
What "operated in France" means. The habitual exercise of an activity in France through an autonomous establishment, through representatives without an independent professional personality, or through operations forming a complete commercial cycle (BOI-IS-CHAMP-60-10-10, § 60 and § 80).
The real seat. The seat is in principle the registered seat in the articles. If the registered seat appears fictitious, the real seat is retained: the place where the bodies of management, administration and control of the company are in fact mainly concentrated. The real seat corresponds to the place of effective management referred to in most treaties concluded by France (BOI-IS-CHAMP-60-10-20, § 1).

In France: the rules on privileged tax regimes

For an individual owner (article 123 bis of the CGI). The rule concerns individuals tax-domiciled in France who hold, directly or indirectly, at least 10% of the shares, financial rights or voting rights in a structure established outside France with a privileged tax regime, and only where its assets mainly consist of securities or financial assets (BOI-RPPM-RCM-10-30-20-10, § 1 and § 220). A structure has a privileged tax regime if its tax is 40% or more lower than the tax it would have paid in France (article 238 A of the CGI, as the same document explains in § 290).
The EU exception. The rule does not apply when the entity is established in a member state of the European Union — and Estonia is one — unless the operation of the business or the holding by the person domiciled in France can be regarded as an artificial arrangement whose aim is to circumvent French tax law (same document, § 300).
For a French company as owner (article 209 B of the CGI). The rule concerns a legal person established in France that has a business operated outside France or a holding in an entity established outside France, and applies only if that business or entity has a privileged tax regime — a tax 40% or more lower than in France (BOI-IS-BASE-60-10-20-20, § 90 and § 100).

An Estonian company pays corporate income tax only when it distributes profit, so in a year in which it keeps its profit its tax can be far below the French tax on the same profit. Whether the rules reach you depends on what the company holds and does, and on whether the arrangement has real substance; your French tax adviser answers that with your figures.

What the Estonia–France tax treaty says

Resident in both countries. If a person other than an individual is resident in both states, the competent authorities endeavour to settle the question by mutual agreement, having regard to its place of effective management, the place where it is incorporated or constituted and any other relevant factors; without such an agreement it is not considered a resident of either state for the benefits of the convention (convention signed in Paris on 28 October 1997, article 4(3)).
Permanent establishment. A permanent establishment is a fixed place of business through which the business of an enterprise is wholly or partly carried on; it includes especially a place of management, a branch and an office (article 5(1) and (2)). The profits attributable to it may be taxed in the state where it is (article 7(1)).
Directors' fees. Fees a French resident receives as a member of the board of directors of an Estonian company may be taxed in Estonia (article 16) — see board member fee or dividend from abroad.
Dividends. Dividends paid by an Estonian company to a French resident may be taxed in France; if Estonia also taxes them at source, the treaty limits that tax to 5 percent of the gross amount for a company holding directly at least 10 percent of the capital and 15 percent in all other cases (article 10(1) and (2)).

So, as with Austria, Ireland and Switzerland, the treaty does not settle a double residence by itself: a company effectively managed from France may need an agreement between the two tax administrations before it can rely on the treaty. The multilateral convention on tax treaty measures (MLI) can change the rules of tax treaties; how it applies to your company is a question for your French tax adviser — we do not give that ruling.

What to decide before you form or buy the company

Where management really takes place. Where the decisions that direct the company are in fact taken is the fact the French real-seat rule and the treaty look at.
What the company holds and does. A company holding mainly securities or financial assets is what article 123 bis speaks of; an operating business is treated differently.
Where the work is done. An office or other fixed place of business in France can be a permanent establishment.

What we do on the Estonian side

online formation for an e-resident — €950 Registered address and contact person service for one year are included., or formation by power of attorney — €1,250;
a ready-made company bought remotely — €1,200 Registered address and contact person service for one year are included.;
accounting — from €150 / month and the annual report — from €450;
the registered address and contact person after the first 12 months — €350 / year.

Our accounting covers the Estonian company's Estonian obligations. French tax returns and French tax advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.

Prices exclude VAT. All communication takes place by email.

Ready to start? A new Estonian company — online for e-residents or by power of attorney; French tax advice is not included. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Frequently asked questions

Is my Estonian company taxed in France if I run it from France?

It can be. France taxes the profits of businesses operated in France, and if a company's registered seat is fictitious the French tax administration retains its real seat — where its management, administration and control are in fact concentrated (BOFiP, BOI-IS-CHAMP-60-10-10 and -20). In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6). Under the Estonia–France tax treaty the competent authorities endeavour to settle such a double residence by mutual agreement; without an agreement the company gets none of the treaty's benefits (article 4(3)). France's article 123 bis rule does not apply to an entity in an EU state unless the arrangement is artificial. Ask a French tax adviser before you form or buy the company; we handle the Estonian side.

Estonian company run from France: where it is taxed