You've just described a textbook tax evasion scheme. For it to work (and not be an illegal tax evasion scheme), at a minimum, the money would have to stay out of France. Consequently, the most common scenario is simply for the individual to relocate to another country.
Unfortunately because it is not taxed at the personal level, it does not need to stay out of the country and makes it very easy to bring back in the country. This may also depend on the financial institutions and regulation over reporting of large wires, but there are still ways around it. My point was that they can get around these laws so easily due to it being taxed at the corp level and still argue its not avoidance.
No, you misunderstand. It's not enough to satisfy the "form" required of tax law--you must also satisfy a test of "substance." France would pierce through the transaction and treat the "management fee" as a French salary (which, in substance, it is) and haul the taxpayer off to jail for evading taxes.
What was described isn't tax avoidance, it's tax evasion. The form of the substance may appear kosher, but the nature of the transaction is evasion, since it ultimately has the effect of a salary and not a management fee.
Tax is one of those areas of law where the "spirit of the law" actually has meaning. For example, in nearly all of the convictions for the loss-harvesting tax shelters, the form of the underlying structures was legally sound under tax law--but the nature of the transactions was not and resembled tax evasion schemes. SCOTUS upheld these convictions. The same is generally true of various other similar tax shelter convictions in England and France.
