French wealthy move billions abroad fearing Macron taxes
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French entrepreneurs and wealthy families are moving billions to Luxembourg and Switzerland amid Macron’s new taxes and rising political instability.
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People walk by the Louis Vuitton flagship store on Wednesday, April 9, 2025, in Paris. (AP)
French entrepreneurs and affluent families are moving record sums out of the country, channeling investments into Luxembourg-based annuities and Swiss financial accounts amid mounting political and fiscal instability at home, The Financial Times reported.
Wealth managers say the outflow began after President Emmanuel Macron’s decision to call snap parliamentary elections last June, which fractured the National Assembly and ushered in a string of short-lived governments. The uncertainty has continued in 2025 with Prime Minister Sebastien Lecornu, who has turned to new taxes on high earners to fill a deep budget deficit.
Guillaume Lucchini, founder of the Paris wealth management firm Scala Patrimoine, said most assets he handles now flow into Luxembourg life insurance contracts, which are long-term investment products offering tax benefits. “It’s really accelerating,” he said. Others, including Swiss-based lawyer Philippe Kenel, note that capital flight to Switzerland is also rising as wealthy families seek stability rather than purely tax relief.
French investments soaring
Data from Luxembourg’s insurance watchdog showed French investments in such contracts rose 58% in 2024 to a record €13.8 billion. Financial advisors expect another surge this year as uncertainty persists. “With every new bout of instability, the enquiries pick up,” said Benjamin Le Maitre of Avant-Garde family office.
While few have relocated abroad, more are shifting funds as a precaution. Milan, Lisbon, and Madrid have attracted some French and British expatriates due to favorable tax regimes, though Italy recently raised its flat tax for foreign residents.
Lecornu’s government has resisted reinstating a full wealth tax but aims to raise €2.5 billion next year through higher levies on holding companies and top earners. Analysts say the trend of moving money to Luxembourg and Switzerland may precede a broader wave of French tax exiles if political instability deepens.
“People may not be ready to leave France today,” said wealth advisor Sandrine Genet, “but parking money abroad helps them move more easily later if they need to.”
France credit rating downgraded
International credit rating agency Standard & Poor’s (S&P) has downgraded France’s credit rating to A+/A-1, citing growing uncertainty over the country’s public finances and slower-than-expected budget consolidation.
The downgrade, announced on Friday, comes just days after the French government submitted its 2026 budget draft to parliament. Despite the move, S&P expressed doubt over France’s ability to stabilize its fiscal trajectory.
France’s long- and short-term credit ratings were downgraded from AA-/A-1+ to A+/A-1, with S&P assigning a stable outlook going forward.
The agency emphasized that the public budget deficit remains a pressing issue, with this year’s shortfall projected to reach 5.4% of GDP.
Cut to France credit rating is 'wake up call'
France's Economic Minister Roland Lescure said on Saturday that the cut to Paris' credit rating by S&P Global is a "wake-up call" for the nation.
