SCI (Civil Real Estate Company): A Complete Guide
Are you considering investing in real estate with others — family or friends? The Société Civile Immobilière (SCI), or Civil Real Estate Company, is an ideal legal structure for buying, managing, or transferring property as a group. You maintain great flexibility in management while protecting everyone’s interests. Whether you’re looking to build wealth, streamline inheritance, or simply share rental income and expenses, the SCI offers a secure and adaptable solution. This guide will walk you through everything you need to know before setting up your SCI.
What is an SCI?
An SCI is a legal entity that allows at least two people (individuals or companies) to jointly own one or more properties. Each partner holds shares in the company based on their financial contribution. Decisions are made collectively, and one or more managers are appointed to handle daily operations.
More info available on the official government website.
What are the benefits of an SCI?
- Investing together: ideal for couples, friends, or family members.
- Simplified inheritance planning: transferring shares is easier than dividing property ownership.
- Separate personal and real estate assets.
- Tax optimization: choose between income tax (IR) or corporate tax (IS).
- Flexible management adapted to the needs of the partners.
The different types of SCI
- Family SCI: for members of the same family, useful for estate planning.
- Rental or management SCI: focused on property acquisition and rental, with income shared among partners.
- Allocation SCI: created to build a property and then divide it among partners (has a limited lifespan).
- Construction-sale SCI: created to build and sell property. This is the only SCI type allowed to make profits.
What tax regime applies to an SCI?
By default, an SCI is subject to income tax (IR): each partner declares their share of rental income on their personal tax return.
You can opt for corporate tax (IS) if it’s more beneficial. However, this choice is irreversible. It allows property depreciation and more deductible expenses, but capital gains are taxed at higher rates.
How to create an SCI
Key steps include:
- Drafting the SCI’s bylaws (you can use a template or hire a notary).
- Appointing one or more managers.
- Publishing a notice of incorporation in a legal announcements journal.
- Filing the registration application with the clerk’s office (via the online portal).
Good to know
- SCIs must keep annual accounts and submit a tax return using Form 2072-S-SD.
- Banks usually require a personal contribution and assess the borrowing capacity of all partners before granting a loan.
- If there’s a disagreement between partners, operations are governed by the SCI’s bylaws.
Conclusion: Everything You Need to Know About the Civil Real Estate Company (SCI)
To conclude, an SCI is more than just a legal form — it’s a true property management solution that can be tailored to your goals. Not only does it allow group ownership, but it also simplifies inheritance, rentals, and the sharing of expenses. Ultimately, if you’re looking for a flexible and secure structure to manage shared real estate, the SCI may be a perfect fit — especially since you define the rules from the start.
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