A number of French start-ups make the choice to transfer their head office to the United States or to locate themselves there through a transaction commonly referred to as a « flip », i.e. the creation of a holding company under US law, followed by a contribution of all of the shares of the French company to the holding, so that the French operating company ultimately constitutes a wholly-owned subsidiary of the holding company under US law.
These relocation operations, in spite of providing access to a larger consumer market in the United States, are justified initially by allowing the access to new sources of investment. Indeed, US investors usually want to have control over the legal and tax environment by acquiring a stake in a US holding company.
Nevertheless, while these transfers to the United States provide financing opportunities, they remain expensive and trigger tax consequences that can be significant. As the transfer of a head office has the same consequences as a cessation of activity from a tax perspective, these flips most often take the form of a contribution of shares of the existing French company to a new US holding company as long as the former has a minimum of value and unrealized gains or if it has tax losses to preserve in France. This contribution also enables the French contributors to benefit from a tax neutrality thanks to the benefit of the tax deferral, a mechanism frequently available to foreign investors in the form of a roll over.
In addition to these technical considerations, these transactions are also a source of complexity in the implementation of incentives mechanisms for French tax resident executives and employees. This last difficulty is particularly underestimated in the preliminary evaluation of the opportunity of a relocation to the United States...