Offshore Investment Accounts For France

Whilst an Assurance Vie is the most suitable product for those staying in France for the medium to long term, an offshore investment account can offer significant benefits for those more transient expats living in France.

What Is An Offshore Investment Account?

Also known as a Global Investment Account (GIA), an Offshore Investment Account is a financial account held in a jurisdiction outside of France, typically in a low-tax or tax-neutral jurisdiction. These accounts are designed to provide greater flexibility, tax efficiency, and access to a wider range of global investment opportunities. They allow expats in France the ability to consolidate their worldwide investments into one simple and safe location.

Key Benefits Of An Offshore Investment Account Include;

  • Access to over 80,000 financial instruments, including mutual funds, ETFs, and money market accounts.

  • Hold and invest in up to 11 currencies, reducing foreign exchange risks and removing the requirement to convert foreign investments held into euros.

  • Spread investments across various asset classes and regions to reduce risk and enhance long-term returns.

  • As long as your investments stay invested, there is no capital gains tax due on the growth achieved.

  • Located in jurisdictions such as Jersey and the Isle of Man, these platforms ensure both security and compliance as a French resident.

  • Platforms costs are significantly lower in ongoing fees than an Assurance Vie, starting at 0.25% with no further administration fees applicable.

  • Ability to access a beneficiary trust in the event of death, ensuring a probate free transfer of assets.

  • The ability to consolidate your existing global portfolio of investments into one place, without the need to encash the investment and create a tax liability.

  • Disinvest and withdraw your money in a matter of days as opposed to long waits for standard international products.

  • Make withdrawals to any bank accounts of your choice, including international offshore banking and borderless accounts.

French Offshore Account

An offshore investment account allows the more transient expat in France the ability to take full control of your savings and investments. Bringing your worldwide assets into one place. By having an overall strategy implemented you can simplify and improve your financial position.

If, however, you intend to stay in France for 5 years or more, an Assurance Vie may be a more suitable option.

FAQs

  • There is no one answer to this question; it depends on your position, both now and in the future, your objectives, the amount you have to invest, the currency, and the time frame for the investment. Speaking to a regulated independent adviser is a great first port of call.

  • Any expat in France can use an offshore investment platform however, it may not be best suited for residents who plan to stay for the long term.

  • Yes, but not all platforms will allow you to, and you will need to invest in US-compliant funds and not a PFIC (Passive Foreign Investment Company) fund.

  • Yes, you can withdraw your money at any time without any exit penalties or surrender charges.

  • Yes, you can withdraw money to an offshore bank account, French bank accounts, and any bank account held in your name.

  • You can invest in an offshore investment account through a financial adviser or directly with a product if you wish to self-manage. If you invest through an adviser, they will recommend a solution based on your position, risk appetite, and objectives.

  • For this answer, we are considering an offshore bond as an International Expat Assurance Vie held out of Ireland or Luxembourg.

    The taxation depends on factors like the duration of the policy, withdrawals, and inheritance rules.

    Tax on Withdrawals (Partial or Full Redemption)

    Withdrawals from an assurance vie are taxed only on the gain portion (not the original capital). The tax rate depends on how long the policy has been held:

    Policies Held for Less Than 8 Years

    • Flat Tax (Prélèvement Forfaitaire Unique - PFU): 30%
      12.8% income tax
      17.2% social security charges (CSG, CRDS, etc.)

    Policies Held for More Than 8 Years

    • A tax-free allowance of €4,600 per year (single) or €9,200 per year (married couples) on the taxable gain.

    • Gains exceeding this allowance are taxed at:
      7.5% income tax for gains below €150,000 (per taxpayer).
      12.8% income tax for gains exceeding €150,000.
      17.2% social security charges apply in all cases.

    Tax on Death (Inheritance Tax Benefits)

    Upon the death of the policyholder, the assurance vie payout can be more tax-efficient than a regular inheritance:

    Premiums paid before age 70: Beneficiaries get a tax-free allowance of €152,500 per beneficiary.

    Gains above this are taxed at 20% up to €852,500 and 31.25% beyond that.

    Premiums paid after age 70: The first €30,500 (total, not per beneficiary) is exempt, and the rest is subject to standard French inheritance tax.

    Exemptions & Special Cases

    If the policyholder dies before the age of 70 and the beneficiary is a spouse or civil partner (PACS), the payout is completely tax-free.

  • An Assurance Vie (life insurance policy) is an investment contract where you deposit money, which is then invested in different financial instruments. Over time, your investment grows, and you can withdraw it partially or fully while benefiting from tax advantages. It works similarly to an offshore investment platform whilst offering additional tax advantages.