Apport-cession (Art. 150-0 B ter CGI)

The apport-cession mechanism (Article 150-0 B ter of the French General Tax Code) allows a taxpayer to contribute securities to a holding company they control, then sell those securities through the holding, with the capital gain tax being deferred rather than immediately payable. The tax deferral applies as long as the holding company retains or reinvests the proceeds: it must reinvest at least 60% of the sale proceeds into qualifying economic assets within two years of the sale.

The primary conditions are: (1) the securities are contributed to a holding company that the taxpayer controls, (2) the sale occurs within three years of the contribution, and (3) the holding reinvests at least 60% of the proceeds into eligible assets — operating company shares, private equity funds (FCPR, FPCI), or direct subscription to shares in operating companies. If these conditions are not met, the deferred tax falls due immediately.

The apport-cession is a powerful tool for entrepreneurs who wish to sell their company while reinvesting the proceeds into new ventures or a diversified portfolio without incurring immediate capital gain tax (typically 30% flat tax under the flat tax / PFU regime). It allows the full pre-tax proceeds to be reinvested, compounding returns on the gross amount rather than the net-of-tax amount.

The valuation of the contribution is a critical step: the value retained for tax purposes must be consistent with market value. A defensible independent valuation report from a firm such as Hectelion is essential to secure the contribution value against any challenge from the French tax authority (DGFiP).

At Hectelion, we produce valuation reports for apport-cession transactions and advise on reinvestment structuring in our financial structuring and business valuation mandates.