Categories: Business

French fortunes flee the country as left-wing powers rise

AFP – STEPHANE DE SAKUTIN The Coeur Défense tower in the La Défense business district, on December 20, 2022 near Paris.

After Emmanuel Macron's efforts to retain wealthy French people, he will have ultimately created a backpedaling in the country's financial confidence by creating numerous political uncertainties. Following the rise of the left and its proximity to power, wealthy savers are now turning to life insurance contracts in Luxembourg. Indeed, their savings are said to be safer than in France, where politics is tossed about by the waves.

The director of wealth management at Swiss Life Banque Privée, Guillaume Gimbal, confirms this. Following the announcement of the dissolution made on June 9, a “very significant increase in the number of requests” was reportedly felt regarding life insurance policies offered in Luxembourg. A country renowned for its tax attractiveness.

The leader explained to AFP that this product “reassures […] because the specter of taxing savings looms a little”. Indeed, to amortize the country's debt, it was mentioned by left-wing parties including Sandrine Rousseau. Despite the outcry, the sword of Damocles seems to continue to weigh.

One of the flagship measures of the New Popular Front (NFP) program would in this sense be at the origin of the suspicion of the big French accounts. Consisting of the taxation of capital income, this would signal the return of the solidarity tax on wealth, all the more known for its acronym: the ISF.  

Although these contracts in Luxembourg do not exempt French clients from taxation in their country of origin, strategies surrounding these investments make it possible to reduce the bill. Contracts in this country offer such advantages that even French banks offer their French clients dedicated subsidiaries in the neighboring country that specifically market these savings products. No less than 65 billion euros are under Luxembourg management through this channel within the four main banks in France.

However, this was without taking into account the latest announcement from the French Prudential Supervision and Resolution Authority (ACPR), which intends to put a spoke in the wheels of 30,000 contracts, taken over due to their insolvency by the life insurer FWU Life Insurance Lux SA.

The last option, therefore, is tax expatriation. However, the CEO of Milleis Banque, Nicolas Hubert, assures that it is “in reality [an operation] extremely complicated and costly”. Curiously, Luxembourg has chosen the right timing to propose new measures, including tax incentives, since July 17.

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Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my natasha@thetimeshub.in 1-800-268-7116

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