A large number of business leaders wonder if it is compulsory in France to open a bank account dedicated exclusively to the business and if this account must necessarily be a professional type account.

In addition, some companies want to do banking transactions in currencies other than the euro but fear they will run into a legal problem.

We will try, through this article, to answer these questions.

I – Professional bank accounts

1. 1. The obligation (or not) to open an account dedicated to professional activity

Individual entrepreneurs are exempt from the obligation to open a current account dedicated to their professional activity.

However, self-employed workers are required to create an account dedicated to the activity of their company if their turnover has exceeded for two consecutive calendar years an amount of € 10,000.

This measure resulting from a law of 2019 also applies to micro-entrepreneurs.

On the other hand, all capital companies (EURL, SA, SAS, SARL…) must open a bank account dedicated to their professional activity at the time of their creation in order to deposit their share capital. Without opening such an account, separate from the current account, it is impossible to obtain registration. However, while it is mandatory to open such an account in order to create a company, it is not mandatory to keep it.

However, you are strongly advised not to close the account dedicated to professional activity once the company is registered. Indeed, in the event of management of a company without an account dedicated to professional activity, professional deposits in the personal bank account will be mixed with other cash receipts and, thus, these professional deposits risk being requalified by the tax administration like wages.

1. 2. The steps to open an account dedicated to the company

Choosing a professional bank is an important act because the objective for it is to support the company at the different stages of its development.

The first step is to clearly identify your needs at the beginning of the relationship but also in the foreseeable future. The choice of the bank will have to take these needs into account.

It is possible to distinguish two types of needs among the questions to be asked:

• Needs related to the activity of the company:
  • services related to means of payment: electronic money, international transfers, cash collection, online payment systems, check cashing, but also business cards, payment limits, etc;
  • geographic coverage of services;
  • short-term financing and liquidity facility;
  • development investment financing;
  • other specific needs.
• Needs related to the expected relationship mode with the bank:
  • availability of a regular advisor, need for proximity … and / or possible digitalization of all or part of the exchanges;
  • investment advice, management advice, etc.

Important note: A company that cannot find a bank willing to open an account for it has an “account right”. Any bank refusing to open an account must provide the company with a certificate. This can turn to the “Banque de France”, which designates a banking institution with the obligation to open a professional bank account at short notice.

The steps to be taken by a company being created to open an account are as follows:

When setting up a company, partners who contribute money must deposit the funds with a specialized establishment.

In practice, the partners start by writing a draft statute. Once the capital has been defined and the contributions determined, they must deposit the contributions in cash (in full or at least the legal minimum provided for by the articles of association) into a blocked account.

The articles of association must mention the deposit of the share capital and specify the name of the establishment where it is deposited. Then, it is only when the company is registered with the registry of the commercial court that it is possible to release the capital of the company and to pay it into a final bank account.

1. 3. The differences between professional bank account and personal account

 Whatever the type of bank account, it will be possible to obtain a RIB, to have a bank card and a checkbook, to receive and issue transfers, to cash checks and cash, to set up payment by direct debit.

However, several services are only reserved for companies with a professional bank account. Here are some examples:

• payment terminals by bank card;
• online management services as invoicing, accounting etc;
• the possibility of making a capital deposit and obtaining a certificate;
• the establishment of a bank overdraft suitable for professionals.

In return, the professional bank account has a higher operating cost than a personal bank account. There are also online business accounts for the self-employed. This sometimes allows savings on bank charges.

The choice between the two types of accounts depends on the legal form of the company. Companies must open a professional bank account upon creation. On the other hand, individual entrepreneurs have the choice between using a personal account or a professional bank account.

II – Opening a bank account in foreign currency

Some companies need to record accounting transactions in foreign currencies, here is what the administration specifies on this subject:

“A company established in France can issue an invoice in a currency other than the euro (in dollars or pounds sterling for example). The foreign currency must be internationally recognized and be mutable: subject to change, convertible. The exchange rate in euros applicable must be mentioned on the invoice.

However, the invoice integrated into the company’s accounts must be in euros. It must have a conversion rate which may be different from the exchange rate used for the payment.

The conversion rate depends either on the due date of the VAT, or on the date of the customs conversion rate (which by convention is fixed on the penultimate Wednesday of the month). “

Thus, the company may be required to open an account denominated in a foreign currency by opening a foreign bank account or by opening a multi-currency account.

1. 1. Opening a foreign account

The law provides for an obligation to report foreign accounts but commercial companies (SA, SAS, SARL, …) are not affected by this obligation to report to the tax authorities.

On the other hand, sole proprietorships and EIRLs have the obligation to declare their accounts abroad, including accounts closed the previous year and accounts on which people have a power of attorney.

The declaration must be sent to the tax authorities each year using the Cerfa 3916 form.

Procedure for opening an account abroad within the EU:

The documents to be provided are generally the following:

• An identity card;
• A Kbis extract;
• The statutes of the company;
• The last tax declaration (VAT or IS);
• Proof of address or registered office;

In addition, you are generally asked to make a minimum deposit.

Procedure to open an account outside the EU:

Any complications related to opening a bank account abroad depend on the regulations of the country you choose. Indeed, you will also be subject to the economic laws of the host country of your new professional account.

In both cases, some banks require numerous guarantees in terms of administrative documents and in financial terms.

The advantages of a bank account abroad:

The opening of a bank account abroad can meet different needs, depending on the structure and nature of the professional activity. It will thus be able to streamline commercial relations, for customers or suppliers established abroad. It will also simplify the procedures relating to raising funds to obtain international investments.

1. 2. Opening a multi-currency account

For some companies that have to make many transfers from one currency to another, opening such an account allows you to avoid many bank charges.

The advantages of a multi-currency account for companies that often process transactions in different currencies:

• It allows to keep money in different currencies in one place with more favorable exchange rates;
• It allows to make more profitable online purchases from certain international suppliers;
• It allows you to send and receive money in foreign currencies with lower fees.

In conclusion, it should be noted that the operations of opening a foreign account or a multi-currency account are generally only profitable to companies which have a relatively important activity with foreign customers or suppliers. But if you have any doubt, all the team of French Business Advice is at your disposal to help you, so do not hesitate to contact us!