Are you a US Citizen living in France or considering moving to France?
Are you a US citizen Living in France?
Navigating wealth management as a U.S. citizen living in France presents unique complexities. Levitt Capital Management (LCM) specializes in providing fiduciary advisory services tailored for Americans residing in Europe.
LCM uses both U.S. and European custodians and investment strategies to ensure your financial plans align with cross-border regulations, maximizing your returns while mitigating risks.
Whether you’re transitioning to life in France, planning for retirement, or managing a complex financial portfolio, LCM delivers personalized solutions to help you achieve financial stability and growth.
Financial Planning for US Expats Living In France
US citizens living in France face several unique financial challenges due to their dual tax obligations and the complexities of managing finances across two countries. Here are some of the top financial issues they encounter:
Dual Taxation
American expats in France must navigate the tax systems of both countries:
- They are required to file US tax returns annually, reporting their worldwide income
- They also need to file French tax returns and pay taxes on their global income as French residents
- While the US-France tax treaty helps prevent double taxation, expats must still carefully manage their tax obligations to both countries
- Read our thoughts on the US-France Tax Treaty here.
Retirement Planning Complexities
Retirement planning becomes more complicated for US citizens in France:
- US-source pensions and retirement income, such as IRA and 401(k) accounts, are only taxable in the US
- French-source pensions like the Plan d’Épargne Retraite (PER) are not taxed in the US for American expats living in France
- Contributing to US retirement accounts like IRAs while living abroad can be challenging due to income limitations and tax implications
- Read about why it’s so challenging to get answers to tax questions in France.
Investment Restrictions
Investing as a US citizen in France comes with significant limitations:
- Many French investment products, including popular vehicles like assurance vie, are classified as Passive Foreign Investment Companies (PFICs) by the IRS, subjecting them to unfavorable tax treatment and reporting requirements
- EU regulations can restrict access to US-based investments, limiting options for American expats
- MiFID II regulations in the EU may further complicate investment choices for US citizens
- Read more: Can US Citizens who live in France buy ETFs?
Currency Considerations
Managing finances in two currencies presents additional challenges:
- The value of US-based investments can fluctuate relative to the Euro, affecting overall wealth in the local currency
- Currency exchange costs can erode savings when transferring funds between the US and France
- Read More: Should you retain a US based investment advisor when you live in France?
Additional Reporting Requirements
US citizens in France face extra financial reporting obligations:
- They may need to file a Foreign Bank Account Report (FBAR) if they have $10,000 or more in foreign accounts at any point during the year
- FATCA reporting is required for foreign financial assets exceeding certain thresholds
- Read More: The Return of Cash Management and French Bank Products for Americans
Healthcare Costs
While France has an excellent healthcare system, US citizens need to consider:
- Enrolling in the French public healthcare system or obtaining private health insurance to supplement it
- Managing potential gaps in coverage, especially during the initial period after moving to France.
- Read More: Health Insurance for American Retirees in France. How does it work?