PARIS — A quiet but palpable panic is sweeping through the French upper and middle classes. Buffeted by political instability, spiraling public debt, and the looming threat of aggressive taxation in the 2026 budget, French investors are triggering a defensive reflex: moving their capital out of the country.
While street protests usually grab the headlines in France, a more discreet movement is happening in private bank accounts. Wealthy families, entrepreneurs, and increasingly, corporate executives are transferring significant portions of their savings to the regulatory havens of Switzerland and Luxembourg.
“The dissolution marked a true rupture,” observes Benjamin Le Maitre, a wealth manager and co-founder of the wealth management firm Auguste Patrimoine, referring to President Emmanuel Macron’s shock decision to dissolve the National Assembly in June 2024. This political gamble resulted in a hung parliament and a surge in support for the left-wing coalition, traditionally hostile to capital accumulation.
For Le Maitre, whose firm, —among other wealth management services— facilitates access to funds domiciled in Switzerland and Luxembourg, the impact was immediate. “Since June 2024, the number of contact requests has multiplied by three, and it has never really dropped since.”
The Luxembourg “Safe Haven” Strategy
Data from Luxembourg’s insurance authority confirms this trend: investments by French clients into Luxembourgish life insurance contracts hit €13.8 billion ($14.5 billion) in 2024, a staggering 54% year-over-year increase.
“It is a historical record, and the movement picked up again with renewed intensity when the budget debates opened in September,” notes Le Maitre.
Note for the US Audience: The “Assurance-Vie” Vehicle
Unlike standard U.S. life insurance (which is mostly a death benefit), the French assurance-vie is a tax-advantaged investment wrapper, similar in function to a Private Placement Life Insurance (PPLI) in the US.
When French investors move these contracts to Luxembourg, they benefit from the “Security Triangle”: a legal regime where client assets are segregated from the insurer’s balance sheet and held by a custodian bank. This protects the assets even if the insurance company goes bankrupt, a protection that is weaker in France.
According to Le Maitre, this capital flight is fully legal and transparent, yet it signals a profound shift in sentiment. “What people are coming to seek is, above all, a form of psychological security: to diversify, protect, and sanctuarize their investments,” he explains. He describes “peaks of panic” occurring whenever political rhetoric, particularly from the Left, targets personal savings.
A new demographic: From tycoons to the middle class
Historically, offshore wealth management was the preserve of the ultra-high-net-worth individual. That era is over. The anxiety has permeated the real economy.
“The myth of the ‘great fortune’ is over” says Le Maitre. “We are now assisting small and medium business’s owners, doctors, corporate executives; we have even received successful bakers.”
This democratization of capital flight is driven by a younger, more financially literate generation. “We are seeing thirty-somethings come in, senior executives or entrepreneurs, who educate themselves extensively on the internet and are questioning the political and economic future of the country,” the wealth manager adds.
Asset Flight: The precursor to physical exit?
For the French economy, the immediate concern is the loss of domestic capital that could fuel local business. However, Le Maitre warns of a more permanent structural risk: fiscal expatriation.
In the U.S., citizens are taxed on worldwide income regardless of residence. In France, moving one’s tax residency to a neighboring country stops most French tax liabilities.
“Moving financial assets is often just a first step,” warns Le Maitre. “Once funds are placed in a Luxembourg life insurance policy, the switch to a foreign tax residency becomes much easier.”
The numbers are telling. Le Maitre reports that between 30% and 40% of his firm’s new clients are now openly considering expatriation, an unprecedented level. The portable nature of Luxembourgish contracts allows these investors to “pack their bags” financially before they do so physically.
As the French parliament debates new taxes on wealth and corporate holdings to plug the deficit, the message from wealth managers is clear: French capital is voting with its feet, preparing for a potential exit that goes beyond mere diversification.
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