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Liability Regime for Financial Actors under Monegasque Law

The purpose of this analysis is to determine the nature, scope, and evidentiary rules governing the obligations incumbent respectively upon an external asset manager (licensed company) and a banking institution (custodian bank and provider of investment services) under Monegasque law within the framework of a discretionary management mandate with an investment profile.

This analysis aims to identify the legal principles capable of forming the basis of the contractual liability of these entities in the event of serious breaches of their obligations relating to safekeeping, information, diligence, supervision, and prudent management.

I. Liability Framework Applicable to the Asset Manager

The contractual liability of the external asset manager is based on three principal obligations arising from Monegasque financial legislation and the general law of mandate.

Enhanced Duty of Care: Prudence, Diversification, and Risk Management

The legislative basis for this primary obligation is found in Monegasque legislation — Law No. 1.338 of 7 September 2007 on Financial Activities and Sovereign Ordinance No. 1.284 of 10 September 2007.

Law No. 1.338 of 7 September 2007 on Financial Activities establishes the general legal framework governing financial activities in Monaco by listing the services concerned (portfolio management, transmission of orders, investment advice, etc.) and subjecting the exercise of such activities to prior authorization and supervision by the competent authorities.

Sovereign Ordinance No. 1.284 of 10 September 2007 specifies the implementing provisions, notably by establishing the organizational and financial requirements applicable to licensed companies, including rules concerning minimum capital and operational requirements for financial institutions.

The principal textual basis of the enhanced duty of care, including the obligations of prudence, diversification, and risk management, is found in Articles 5, 23, and 26 of Law No. 1.338 of 7 September 2007 on Financial Activities.

Taken together, the provisions of these articles establish that the management mandate is a continuing contract imposing upon the professional party the duty to act exclusively in the client’s interest.

These provisions further establish the essential principles governing portfolio management, namely the requirement of:

• prudent and appropriate management (Article 5),
• compliance with rules of professional conduct and strict professional standards (Article 23),
• as well as the obligation to execute mandates solely in the client’s interest and not to use them for purposes other than those for which they were entrusted (Article 26).

The assessment and evidentiary regime resulting from these statutory provisions implies that the manager’s obligation is assessed in abstracto, that is, by reference to the conduct that a prudent and diligent professional would have adopted under similar circumstances.

Although formally characterized as an obligation of means, this obligation is considered enhanced insofar as the asset manager automatically incurs contractual liability in the event of losses suffered by the client unless he can positively demonstrate that the mandate was executed with all necessary diligence and in accordance with the requirements of prudence and diversification.

Obligation of Pre-Contractual Information, Suitability Assessment, and Duty to Warn

This obligation is governed by provisions such as Article 23-3 of Law No. 1.338 of 7 September 2007 on Financial Activities and Article 17 of Sovereign Ordinance No. 1.284 of 10 September 2007.

Article 23-3 of Law No. 1.338 of 7 September 2007 requires licensed companies to obtain information from their clients, including prospective clients, concerning their knowledge and experience in investment matters in order to assess whether the proposed service or financial instrument is suitable for them.

If, on the basis of the information obtained, the service or instrument is deemed unsuitable, the client must be warned accordingly.

If the client fails to provide the required information, or if such information is insufficient, the licensed company is required to inform the client that it is unable to assess the suitability of the product in relation to the client’s profile.

These rules apply having regard to the nature of the service, the financial instrument concerned, and the client’s status (professional or non-professional investor), the classification criteria being determined by sovereign ordinance.

Article 17 of Sovereign Ordinance No. 1.284 of 10 September 2007 provides that, prior to the execution of the mandate referred to in the preceding article, the company is required to examine the client’s objectives, investment experience, and financial situation, and that the services offered must be adapted to the client’s financial circumstances.

In addition, the licensed company is required to provide the client with all relevant information.

Obligation of Ongoing Monitoring and Accounting

Pursuant to Article 23-2 of Law No. 1.338 of 7 September 2007, licensed companies are required to retain all relevant information and maintain detailed records of all services rendered and all transactions carried out.

II. Liability Framework Applicable to the Custodian Bank

The bank’s liability is twofold: it is governed both by the general rules relating to deposit under the Civil Code of Monaco and by the professional obligations applicable to providers of investment services.

Enhanced Obligation of Safekeeping and Immediate Restitution (Deposit Regime)

In its capacity as custodian of the claimant’s funds and financial instruments, the bank is subject to strict rules laid down by the Civil Code of Monaco, which establish a stringent obligation of safekeeping and restitution.

Under Article 1766 of the Civil Code of Monaco, the bank is subject to a duty of diligent safekeeping, requiring it to exercise the same degree of care in protecting deposited assets as it exercises in protecting its own assets.

Furthermore, pursuant to Articles 1771 and 1776 of the Civil Code of Monaco, this obligation extends to the identity of the asset itself, the bank being required to return it identically and exclusively to the person who entrusted it to the bank.

Finally, this body of rules culminates in Article 1783 of the Civil Code of Monaco, which establishes the principle of immediate restitution by requiring the custodian bank to return the assets to the depositor immediately upon demand.

Taken together, these provisions establish an enhanced obligation of safekeeping, loyalty, and immediate restitution of entrusted assets.

Obligations Relating to Professional Conduct, Vigilance, and Fundamental Supervision

As a licensed provider of investment services in Monaco, the bank is subject to public-law deontological and prudential rules based on Article 10 (paragraph 5) and Article 23-3 of Law No. 1.338, as well as Articles 7 and 13 of Sovereign Ordinance No. 1.284.

At the core of this regime lies the duty of diligence and loyalty, formalized in Article 7 of Sovereign Ordinance No. 1.284, which requires licensed companies to comply with strict rules of professional conduct in order to ensure investor protection and the regularity of transactions.

The bank must therefore act loyally and in the best interests of its clients and of market integrity, exercise its activities with the necessary competence, diligence, and vigilance, and ensure that its personnel possess sufficient qualifications and expertise.

It is likewise required to maintain effective resources and internal procedures enabling it to perform its duties, comply with applicable regulations, and endeavor to avoid conflicts of interest or, where unavoidable, ensure fair treatment of clients.

Concurrently, the obligations of assessment and information arise from Article 13 of the same Ordinance and Article 23-3 of Law No. 1.338.

Like the asset manager, the bank is required actively to examine clients’ financial situation, investment objectives, and investment experience.

The bank must provide all relevant information in an appropriate manner, warn clients of the risks associated with contemplated transactions, and formally alert them where market transactions appear unsuitable in light of their profile.

Finally, this liability regime is completed by the obligation to supervise the regularity of transactions, established by Article 10, paragraph 5, of Law No. 1.338, which legally requires the bank to carry out basic supervision of the regularity of transactions recorded in its books, as well as of the transparency of the fees applied.

Conclusion

In summary, Monegasque law governs investor protection in a strict and complementary manner.

Where losses are recorded on a portfolio with a contractually defined “balanced” profile, the asset manager incurs enhanced liability if he cannot demonstrate active diligence (enhanced duty of care) and compliance with his obligation as to result concerning the pre-contractual assessment of the suitability of risks.

The bank cannot be regarded as a passive third party: it is subject to an enhanced civil-law obligation of safekeeping and immediate restitution (law of deposit), combined with a statutory obligation to carry out fundamental supervision of the regularity of transactions, as well as an autonomous duty of vigilance and loyalty toward the client.

Accordingly, a characterized breach of these statutory and regulatory provisions constitutes a manifest contractual default giving rise to full compensation for the economic and moral damages suffered.

Med venlig hilsen / Kind regards
Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NICE
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
Camilla.nissen.michelis@brahin-avocats.com
www.brahin-avocats.com

I. Nature and Purpose of the Formality: What Is It and Why Must It Be Carried Out?

Declaration of Existence for Foreign Companies Directly Acquiring Real Estate in FRANCE: Principles, Procedures, Costs and Sanctions

• Nature and purpose of the formality: What is it and why must it be carried out?
• Applicable legal and regulatory framework
• Preparation, formal requirements and deadlines
• Administrative procedures and additional tax obligations
• Costs related to the procedure
• Sanctions in the event of non-compliance
• The role of the notary
• Conclusion

Under French law, foreign companies wishing to conduct business activities in FRANCE or establish their first place of business there are subject to specific reporting obligations. When a foreign company directly acquires real estate in FRANCE, it is likewise subject to these obligations, including the declaration of existence.

This procedure is a legal obligation imposed on foreign companies owning real estate on French territory, even if they do not have their registered office there.

The purpose of the procedure is to ensure the company’s official identification and registration with the French administrative and tax authorities.

It is essential in enabling the tax authorities to monitor the company’s activities within the territory and to ensure compliance with the applicable tax rules.

In the specific case of foreign companies directly acquiring real estate in France, they are considered, for tax purposes, to be carrying on an activity in FRANCE due to the income generated by such properties or the rights attached to them, in accordance with Article 164 B of the French General Tax Code (Code général des impôts, hereinafter the “CGI”).

Such acquisition results in the company becoming subject to corporate income tax and triggers a series of strict accounting and reporting obligations.

The declaration of existence therefore serves as an instrument of tax transparency aimed at monitoring international investments on French territory.

II. Applicable Legal and Regulatory Framework

The legal framework governing this obligation is based on several key provisions of the CGI and the French Tax Procedures Code (Livre des procédures fiscales – LPF):

1. Article 23 D of Appendix IV to the CGI provides that companies which, without having their registered office in France, carry out activities there rendering them liable to corporate income tax must obligatorily indicate in their declaration the location of their principal establishment in France as well as the surname, first name and address of their representative in FRANCE.

In the event of replacement of this representative or a change in the location of the aforementioned establishment, such companies must file a declaration under the conditions set forth in Article 23 B of the same appendix.

2. Article 164 B of the CGI establishes the principle of taxation of French-source income and specifies that foreign real estate companies may be subject to corporate income tax in FRANCE with respect to income derived from real estate located in France or rights relating to such real estate, such as usufruct rights, shares or interests in real estate companies, or co-ownership rights.

3. Official administrative doctrine (Reply from the Minister Delegate for the Budget No. 41415, Mr. Ehrmann, JOAN Q of 16 September 1991) confirms that these companies are liable for corporate income tax pursuant to Articles 205 and 209, paragraph I of the CGI, subject to international tax treaties.

Although they are not subject to French commercial accounting obligations for their internal operations, they are required to maintain accounting records enabling the determination of their taxable income in accordance with Article 54 of the CGI.

They must file tax return No. 2065 under ordinary law conditions in order to determine and verify such taxable income and are not authorized to file tax return No. 2072, which is reserved for companies not subject to corporate income tax.

4. Article 223 quinquies A of the CGI provides that foreign legal entities may be requested by the tax authorities to appoint, within ninety days from receipt of the request, a representative in FRANCE authorized to receive communications relating to tax assessment, collection and litigation.

However, this obligation to appoint a tax representative does not apply to legal entities having their registered office in another Member State of the European Union or in another State party to the Agreement on the European Economic Area (EEA) which has concluded with FRANCE an administrative assistance agreement for the purpose of combating tax fraud and tax evasion, as well as a mutual assistance agreement concerning tax collection.

5. Article 990 D of the CGI establishes an annual tax equal to 3% of the market value of real estate or real property rights located in FRANCE and owned directly or through intermediary legal entities (regardless of the structure or percentage of ownership in the holding chain).

This provision was specifically introduced to combat international real estate tax evasion.

The case law of the Court of Justice of the European Union (Fourth Chamber, 11 October 2007, Case C-451/05) clarified the nature of this tax by ruling that it falls within the scope of Directive 77/799 concerning mutual assistance between competent authorities, since it applies to assets or elements of wealth.

The Court also ruled that Article 990 E (in its version applicable at the time) was incompatible with the principle of free movement of capital, rejecting France’s anti-fraud argument on the grounds that the provision disproportionately denied exemption to foreign legal entities established in the EU or EEA whenever no bilateral administrative assistance agreement existed, despite the fact that information exchange mechanisms made it possible to verify shareholders’ identities.

III. Preparation, Formal Requirements and Deadlines

In order to properly complete this procedure, the foreign company must comply with strict formal requirements and prepare precise supporting documentation.

The required documents obligatorily include the company’s updated articles of association, the complete contact details of the appointed tax representative in France, as well as all identification details relating to the acquired property (address, description, cadastral references).

From a timing perspective, the requirements are particularly strict: the declaration of existence must be filed within fifteen days following the establishment of a place of business in France or following the effective date of acquisition of the relevant real estate assets.

IV. Administrative Procedures and Additional Tax Obligations

The procedure requires the foreign company to formally file its declaration of existence directly with the competent tax office (Service des impôts des entreprises étrangères – SIEE – or the local Service des impôts des entreprises – SIE – having jurisdiction over the location of the property), attaching the required documents and specifying the address of its principal establishment in FRANCE as well as the identity of its representative.

(Since 1 January 2023, all declarations relating to the creation, modification or cessation of business activities — including those concerning foreign companies acquiring real estate — must mandatorily be filed electronically through the single online portal managed by the INPI (Institut National de la Propriété Industrielle).)

Once registered, the company must comply with additional tax obligations: first, maintaining strict accounting records in accordance with Article 54 of the CGI in order to justify its taxable basis; second, annually filing tax return No. 2065 for corporate income tax purposes in order to declare rental income received or capital gains realized from real estate transactions.

In addition, the company may be liable, subject to statutory exceptions (notably transparency clauses), for the annual 3% tax based on the market value of its properties.

The appointment of a representative in France must, in principle, be made spontaneously by the foreign company. The case law of the Conseil d’État (Council of State) (8th subsection, 13 November 1964, requests Nos. 50944 and 60449) confirms that a foreign company carrying on business in France cannot validly argue that the tax procedure against it is irregular on the grounds that the administration had not previously requested it to appoint such representative.

Nevertheless, the tax authorities retain the right to formally request the company to do so within a ninety-day period (CGI, Article 223 quinquies A). In the absence of a formal appointment by the company, the administration cannot unilaterally designate a third-party taxpayer as representative in order to hold that party liable for the company’s taxes (Conseil d’État, 8th and 9th subsections, 11 July 1984, request No. 35416).

V. Costs Related to the Procedure

Although filing the declaration of existence with the French tax authorities does not give rise to registration duties or direct filing taxes payable to the State, regularizing the transaction entails professional and ancillary costs.

These costs include certified translation fees for the company’s articles of association and official foreign documents required by the authorities, contractual fees payable to tax representatives or legal advisers appointed to carry out the procedures, as well as notarial fees and land registration publication costs relating to the publication of the real estate purchase deed.

VI. Sanctions in the Event of Non-Compliance

Failure to file the declaration of existence or failure to appoint a tax representative exposes the foreign company and its directors to severe civil, tax and criminal sanctions:

1. Estimated Tax Assessment

If the company refuses or fails to respond to the tax authorities’ request to appoint a representative within the ninety-day period, it automatically becomes subject to an estimated corporate income tax assessment pursuant to Article L. 72 of the LPF.

The tax authorities then unilaterally determine the tax due, together with late-payment interest and substantial penalties.

2. Tax Sanctions Affecting Assets

Failure to file the declaration results in the company losing entitlement to exemptions from the 3% tax under Article 990 D, thereby making the tax immediately payable on the market value of the property, together with penalties for non-filing.

3. Criminal Sanctions

Where a foreign legal entity conducts activities or owns property in FRANCE while concealing its existence and deliberately failing to comply with its reporting obligations, this may constitute the criminal offence of concealed activity.

The case law of the Criminal Chamber of the French Court of Cassation (Cour de cassation, criminal chamber, 20 June 2017, No. 14-85.879, ECLI:FR:CCASS:2017:CR01397) reaffirms that such concealed activities on French territory may give rise to criminal sanctions against the company’s directors.

VII. The Role of the Notary

The notary plays a mandatory and central role in ensuring the legal security of a foreign company’s acquisition of real estate.

Pursuant to Decree No. 55-22 of 4 January 1955 reforming land registration procedures, the notary is the public officer responsible for publishing the deed of sale in order to render the company’s ownership enforceable against third parties.

Documents and articles of association drafted in a foreign language must be filed among the notary’s records and, where applicable, must be accompanied by a certified translation.

As part of the notary’s duty to advise, the notary informs the parties of their tax obligations and of the absolute necessity of filing the declaration of existence with the French tax authorities within the statutory deadline.

Conclusion

The declaration of existence constitutes an essential and mandatory formality for foreign companies directly acquiring real estate in FRANCE.

It conditions their legal recognition by the tax authorities, enables the allocation of a tax identification number and ensures that the structure complies with the ordinary tax regime.

Failure to comply with this obligation deprives the entity of entitlement to tax exemptions and exposes it to estimated tax assessments as well as serious tax and criminal sanctions.

In order to secure the transaction, it is strongly recommended to conduct a structural review with a notary and a tax adviser from the preparatory phase of the acquisition onward.

Med venlig hilsen / Kind regards
Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NICE
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
Camilla.nissen.michelis@brahin-avocats.com
www.brahin-avocats.com

What is joint ownership (“indivision”)?

You are inheriting an estate but are not the only beneficiary? Then you find yourself in a situation of joint ownership (“indivision”) with the other heirs. What rights do you have? How are decisions made?

After a death, if there are several heirs, the deceased’s estate is held in joint ownership.

This means that the assets of the inheritance belong collectively to all heirs, without their respective shares being physically divided.

The assets included in the joint ownership are called jointly owned assets.

Each member of the joint ownership, called a co-owner or co-heir, is allocated a share in the form of a proportional interest.

Joint ownership is only a temporary phase in the administration of the estate. It ends when the estate is divided.

Note

There is only joint ownership when the heirs have rights of the same nature over the same asset.

This is the case, for example, when two children inherit real estate together.

Under what conditions can you use jointly owned assets?

The use of jointly owned assets is subject to the following conditions:

• obtaining the consent of the other co-owners; if no agreement is reached, you may refer the matter to the court,
• respecting the purpose and intended use of the asset,
• paying compensation to the other co-owners if you alone use a jointly owned asset (unless the other co-owners decide otherwise).

How does the legal regime of joint ownership work?

The legal regime of joint ownership comes into effect automatically and obligatorily when the assets of an estate belong jointly to all heirs.

The rules for decision-making vary depending on the type of decision to be taken.

How can you exit joint ownership?

You may leave the joint ownership at any time, unless a court decision or an agreement between co-owners prevents it.

You have several options:

• you may transfer your share by giving or selling it to another co-owner or to someone outside the joint ownership. Note that the other co-owners have a pre-emptive right to purchase the share you wish to transfer,
• you may request the division of all or part of the assets. To finalize the settlement, you must agree on the value of the assets so they can be distributed according to each co-owner’s share,
• you may reach an amicable agreement to sell the assets and distribute the proceeds proportionally according to your respective shares.

Note

If you wish to sell your share, you must inform the other co-owners through an official notification issued by a bailiff or another authorized legal officer.

The other heirs who wish to continue the joint ownership may request the court to postpone the division by applying to the nearest court (“Tribunal Judiciaire”).

Med venlig hilsen / Kind regards
Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NIC
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
Camilla.nissen.michelis@brahin-avocats.com
www.brahin-avocats.com

I. Tax Credit for Personal Services

To encourage the development of personal services, a specific tax scheme has been introduced for this sector.

You can benefit from a tax credit on your income tax if you employ someone at home, whether you are working, unemployed, or retired.

The employee providing the services must work in one of the following locations:

• your primary or secondary residence (whether you own it or not),
• or in the home of an elderly relative receiving a personal autonomy allowance (Apa).

The tax credit amounts to 50% of the expenses incurred for personal services, within a ceiling ranging from €12,000 to €20,000 per year depending on your situation.

II. Tax Benefits Related to the Family

A. Tax Credit for Childcare Expenses

Under certain conditions, you can benefit from a 50% tax credit on expenses incurred for the care of your children or grandchildren outside the home.

Expenses are capped at €3,500 per child (€1,750 per child in shared custody).

The child must:

• be financially dependent on you,
• be under six years old on January 1 of the tax year,
• and be cared for in an approved facility or by a licensed childminder.

B. Tax Reduction for Schooling Expenses

You can benefit from a tax reduction when your child is enrolled in education beyond primary school. The education may take place in a public or private institution in France or abroad.

The child must:

• be financially dependent on you or attached to your tax household if of legal age,
• be enrolled in secondary or higher education as of December 31 of the tax year,
• not be employed,
• and not receive a salary (however, scholarships or internship allowances are permitted).

Note: your tax residence must be in France.

The amount depends on the child’s situation:

Child fully dependent:

• €61 (lower secondary school – collège),
• €153 (high school),
• €183 (higher education).

Child in shared custody:

• €30.50 (collège),
• €76.50 (high school),
• €91.50 (higher education).

C. Deduction of Alimony Payments

Under certain conditions, you can deduct alimony payments from your income if they are paid to:

• a child (minor or adult) who is not financially dependent on you,
• your spouse or former spouse,
• an elderly relative (parent, grandparent, in-law).

D. Tax Reduction for Dependency-Related Expenses

To support individuals living in care facilities, a specific tax scheme allows a reduction in income tax by deducting part of care and accommodation expenses.

The tax reduction corresponds to 25% of the expenses, with an annual ceiling of €10,000 per person.

The maximum tax reduction is therefore €2,500 per year per person.

This benefit applies regardless of your age or family situation.

E. Deduction for Housing Elderly Persons

If you permanently accommodate one or more individuals over the age of 75, you may, under certain conditions, deduct an amount corresponding to your expenses (food, lodging, etc.).

The deduction is capped at €4,075 per person in 2025. For a couple over 75, the ceiling is €8,151.

Note: you must not have a legal maintenance obligation toward the person. Therefore, they cannot be a direct relative (parents, grandparents, etc.), but may be a sibling, uncle, aunt, or an unrelated person.

F. Housing-Related Tax Benefits

MaPrimeRénov’

Introduced on January 1, 2020, this scheme replaces previous energy renovation tax credits and subsidies.

It applies to primary residences and finances energy improvements. It is available to all owners and co-owners of properties that are at least 15 years old.

The amount of support depends on the household’s total income.

Since 2024, the scheme has been divided into three categories:

• MaPrimeRénov’ for individual works
• MaPrimeRénov’ for comprehensive renovation
• MaPrimeRénov’ for co-ownerships

“Denormandie” Scheme

This scheme provides a tax reduction for investments in older properties that are renovated.

The work must represent at least 25% of the total investment.

It applies to projects between March 28, 2019 and December 31, 2027.

The tax reduction ranges from 12% to 21% of the property value, with a ceiling of €300,000.

“Loc’Avantages” Scheme

This scheme provides a tax reduction if you rent out a property at a lower rent than the market price.

The reduction may vary between 15% and 65% depending on the conditions.

Tax Credit for Installing Electric Vehicle Charging Stations

Note: the tax credit has been abolished for expenses paid from January 1, 2026.

However, you can still declare expenses from 2025 in 2026.

The credit applies to installations in a primary or secondary residence:

• 1 installation for a single person,
• 2 installations for a jointly taxed couple.

The credit amounts to 75% of the expenses, capped at €500 per charging station.

You must be tax resident in France.

Tax Benefits for Donations and Investments

Investment in Companies (“Madelin”)

You may benefit from a tax reduction by investing in small and medium-sized enterprises (SMEs).

Donations to Associations

Donations may entitle you to a tax reduction of 66% (or up to 75% depending on the organization), with a ceiling of 20% of taxable income.

Donations must be made without consideration to be eligible.

Our office remains at your full disposal should you require any further information regarding these tax updates.

Med venlig hilsen / Kind regards
Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NIC
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
Camilla.nissen.michelis@brahin-avocats.com
www.brahin-avocats.com

Taxes: Key Deadlines for the Month of May

The fiscal year is marked by a series of essential deadlines for taxpayers.

Between withholding tax payments, income tax filings, and obligations related to real estate wealth tax, it is crucial to keep track of the calendar in order to avoid any delays or penalties.

In this respect, the month of May is particularly busy.

Below are the main deadlines to keep in mind.

May 15: Monthly Payments and Installments

On this date, the fifth monthly income tax payment is collected under the withholding tax system.

This applies to taxpayers receiving income that is not subject to withholding by a third-party collector, including:

• self-employed individuals,
• liberal professionals,
• farmers,
• as well as individuals receiving rental income or alimony.

This date also corresponds to the fifth monthly payment for taxpayers who have opted for monthly payments of certain taxes, such as:

• property tax,
• housing tax on second homes,
• and real estate wealth tax.

May 19: Deadline for Paper Tax Returns

May 19 is the final deadline for submitting paper income tax returns (the 2026 return relating to 2025 income), including for taxpayers residing abroad.

This deadline also applies to paper filings of the real estate wealth tax (IFI).

Taxpayers who file their returns online benefit from an extended deadline, which varies depending on the number of their department of residence.

May 21: First Deadline for Online Filing

For taxpayers filing their returns online, the first deadline is set for May 21.

It applies to:

• departments numbered 1 to 19,
• as well as residents abroad.

This deadline applies to both income tax returns and real estate wealth tax declarations.

Anticipate to Better Manage

Meeting these deadlines is essential to avoid penalties and to secure your tax position.

It is recommended to prepare your returns in advance and carefully review pre-filled information to ensure its accuracy.

Good organization not only helps ensure compliance with tax obligations, but also allows taxpayers to optimize their tax situation by taking advantage of available measures.

Med venlig hilsen / Kind regards
Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NIC
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
Camilla.nissen.michelis@brahin-avocats.com
www.brahin-avocats.com

On the exequatur in France of decisions of Russian arbitration (commercial) courts in bankruptcy cases

Introduction (General Provisions)

The recognition and enforcement in France of decisions rendered by Russian arbitral (commercial) courts within the framework of bankruptcy proceedings fall under the scope of private international law and are governed by the rules of French law in the absence of an international treaty.

There is no bilateral agreement between France and the Russian Federation regarding the mutual recognition and enforcement of judicial decisions. Consequently, the general law (droit commun) of France applies.

In accordance with Article 509 of the French Code of Civil Procedure, foreign judicial decisions cannot produce legal effects on French territory without first undergoing the exequatur procedure.

This principle is confirmed by judicial practice, notably by the Munzer (Cass. civ. 1re, 7 January 1964) and Cornelissen (Cass. civ. 1re, 20 February 2007) rulings, according to which the French court exercises limited review, verifying three conditions: the jurisdiction of the foreign court, compliance with French international public policy (ordre public), and the absence of fraud.

Furthermore, Article L111-3 2° of the Code of Civil Enforcement Procedures provides that foreign judicial decisions may only acquire executive force in France after being recognized as such by a court (Tribunal judiciaire de Rouen, 14 January 2026, n° 25/04425).

First and foremost, exequatur is mandatory for any bankruptcy decisions rendered outside the European Union. Without it, such decisions have no legal force in France. This means that the debtor continues to be considered solvent (in bonis), their assets are not considered divested from their disposal (dessaisissement), and creditors retain the right of individual enforcement on French territory, even if they have filed their claims in the foreign proceeding (Cass. 1re civ., 28 March 2012, n° 11-10.639). Moreover, a bankruptcy trustee appointed in a foreign proceeding is not entitled to carry out enforcement actions in France without obtaining exequatur (v. not. doctrine and practice of international bankruptcies).

Three Conditions for Obtaining Exequatur

To obtain exequatur, three main conditions must be met:

1. Jurisdiction of the Foreign Court: First, the foreign court must be competent from the perspective of French private international law. In bankruptcy cases, this criterion is usually the Center of Main Interests (COMI) of the debtor or their place of residence/location. The procedure must be opened in Russia against a debtor whose main economic interests are linked to the territory of the Russian Federation, which allows for the recognition of the jurisdiction of the Russian court.
2. Compliance with International Public Policy: Second, the decision must comply with the international public policy of France. This includes, above all, respect for the rights of defense:

• Parties must be properly notified of the process;
• Parties must have the opportunity to present their arguments;
• Parties must have access to judicial remedies.

French judicial practice in the field of bankruptcy adheres to a flexible approach to the concept of public policy (Cass. com., 18 January 2000; Cass. com., 5 February 2002). The procedure conducted by Russian courts must be adversarial in nature, while the parties had the opportunity to participate in the case and appeal judicial acts. In practice, there are cases of refusal of exequatur due to the violation of these rights (Cour d’appel de Chambéry, 10 July 2025, n° 22/01725).

3. Absence of Fraud: Third, there must be an absence of fraud (fraude à la loi). Exequatur cannot be granted if the decision was obtained for the purpose of circumventing the law or prejudicing the rights of creditors. There must be no signs of abuse of right or a fictitious transfer of the procedure to a foreign jurisdiction.

The Question of the Status of the Financial Manager in Russian Bankruptcy Proceedings

The status of the financial manager (finansovyy upravlyayushchiy) in Russian bankruptcy proceedings deserves separate attention.

In accordance with Federal Law No. 127-FZ of October 26, 2002, “On Insolvency (Bankruptcy),” a financial manager is appointed by an arbitral court and exercises their powers from the moment of confirmation until the completion of the asset realization procedure or the termination of the proceedings.

Their powers are not limited by a fixed term, but are directly linked to the duration of the procedure. At the same time, they may be relieved of their duties or removed by the court in cases provided for by law (Art. 213.9 of the Federal Law “On Insolvency (Bankruptcy),” in conjunction with Art. 83 of the law). Powers also terminate upon completion of the bankruptcy procedure, including the full satisfaction of creditors’ claims.

The issue of the application of the foreign bankruptcy law (lex concursus) is also of particular importance. French law allows its application, but only after the recognition of the foreign bankruptcy decision (v. not. CA Chambéry, 10 July 2025, cited above). Until that moment, the consequences of the foreign procedure do not take effect on French territory.

Finally, international agreements may simplify the recognition procedure (for example, Convention franco-tunisienne of 28 June 1972; Convention franco-serbe of 18 May 1971), however, in the relations between France and Russia, such agreements are absent (Tribunal judiciaire d’Évry-Courcouronnes, 24 March 2026, n° 24/07019; Tribunal judiciaire de Bobigny, 15 July 2025, n° 23/11900).

Conclusion

Thus, decisions of Russian arbitral courts in bankruptcy cases can be recognized and enforced in France provided that exequatur requirements are met. Until it is obtained, such decisions have no legal force on French territory and do not generate consequences related to the bankruptcy procedure, including the restriction of the debtor’s rights or the powers of the manager. After receiving the exequatur, the decision acquires executive force, allowing the foreign manager to act in France in the interests of creditors within the limits permitted by French law.

Cabinet BRAHIN Avocats
Fedor IlIN
Master’s Degree in Business Law
Specialization in Transport and Aviation Law
Université Toulouse 1 Capitole
Email : fedor.ilin@brahin-avocats.com
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437
www.brahin-avocats.com