Valley International / investing
Luxembourg life assurance for a resident of France
A Luxembourg contract is worth looking at if you may move again, or if your money sits in several countries. Before you sign, we check three things together: whether it follows you abroad, what it lets you invest in, and how your money is protected if the insurer fails.
A Luxembourg life assurance contract is an insurance contract governed by Luxembourg law, taken out with an insurer authorised in Luxembourg and supervised by the Commissariat aux Assurances, which is the insurance regulator there and not the CSSF. Its defining feature is that Luxembourg itself levies no tax on the contract of a policyholder who is not resident there.
A resident of France must consider the French rules as well as any obligations in other jurisdictions. Tax treatment and the ability to keep the policy after a move depend on the countries involved, your circumstances and the insurer’s terms.
A policy for someone who may move again
If another move is possible, ask the insurer which countries it can serve and what operations would remain available there. Compare that answer with your existing policies before considering a replacement. Closing an older contract may have tax and fee consequences. How we are paid, and what it costs explains the firm’s remuneration on a Luxembourg contract.
What the protection regime covers, and where it stops
The security triangle links the insurer, a custodian bank and the Commissariat aux Assurances. Assets covering insurance commitments are subject to a specific custody and protection arrangement. Article 118 of the Luxembourg law of 7 December 2015 gives insurance claims a preferential ranking over those assets; article 119 addresses the remaining claim against the insurer’s other assets. These protections do not guarantee full recovery or prevent losses on investments.
The five investor categories, which decide what you may hold
The CAA’s investment rules distinguish categories N, A, B, C and D. Classification considers the premium and financial wealth, net of debts, rather than the value of all property you own. It affects investment limits; the insurer’s own conditions also apply. Classification alone does not make an investment suitable for you.
The limits of the structure
A Luxembourg policy does not remove French tax or reporting duties. A French resident must examine article 1649 AA and the treatment of withdrawals and death benefits. Succession questions also depend on the applicable law and the family’s circumstances. Compare the full charges and investment risks with the services you will actually use.
The insurer matters as much as the structure. Our insurers, custodian banks and investment partners names the Luxembourg companies and custodian banks the firm uses, including which ones accept US persons — a question that decides which of them is even an option before any comparison of terms begins.
Luxembourg life assurance
Where the costs sit
Six areas to check in a proposal, so you can identify the service being charged for and who receives the fee.
When you invest
Entry
On your contribution
Policy distribution
Questions to ask
What is deducted from each contribution? Ask who receives it and where the charge appears in the proposal.
While you hold the policy
Policy
Policy administration
Insurer
Questions to ask
What amount is the charge based on, how often is it applied and do any pricing tiers apply?
Custody
Safekeeping of assets
Custodian bank
Questions to ask
Is custody charged separately or included within another fee in the proposal?
Investment management
Managing the portfolio
Investment manager
Questions to ask
What does the investment management agreement specify? Identify fixed charges and any performance-related fees.
Underlying investments
Funds and investments held
Fund management companies
Questions to ask
What costs apply within the selected investments? Check their key information documents where available.
When you transact
Transactions
Switching, dealing, currency exchange
Provider named in the tariff
Questions to ask
Which transactions trigger charges, and who charges them? Check the applicable tariff.
- The assets representing the technical provisions are held apart from the insurer’s own estate, by a depositary bank the regulator has approved.
- Article 118 (Luxembourg law of 7 December 2015 on the insurance sector) — the policyholder’s privilege over those assets ranks ahead of other privileges once they are entered in the insurer’s permanent inventory.
- Article 119 addresses a remaining claim against the insurer’s other assets, with the priorities it sets out. The protection arrangements do not guarantee full recovery or prevent investment losses.
References cited
CGI, art. 1649 AA · Loi luxembourgeoise du 7 décembre 2015 sur le secteur des assurances
Frequently asked questions
Does a Luxembourg contract reduce my French tax?
For a French tax resident, a Luxembourg policy is not, by itself, a way to reduce French tax. The applicable treatment depends on your circumstances and any obligations in another jurisdiction. If you expect to move again, check whether the insurer can continue to service the policy in your next country of residence and what tax and reporting consequences the move may have.
Who regulates these contracts?
The Commissariat aux Assurances, or CAA, supervises Luxembourg insurers. Its circular 26/1, in force since 1 February 2026, sets investment rules for fund-linked policies issued from that date; some existing contracts and funds remain under the rules that applied to them. The CSSF supervises other parts of Luxembourg’s financial sector; it is not the insurance regulator.
Is my money really protected if the insurer fails?
The custody arrangement and the priority given to insurance claims provide protection if an insurer fails. Articles 118 and 119 address different pools of assets and claim rankings. They do not promise that every amount owed will be recovered, nor do they protect against a fall in the investments’ value.
Can I hold unlisted assets inside the contract?
Potentially. The asset, regulatory limits, insurer and policy must all permit it. Your category is part of that analysis, alongside valuation, liquidity and concentration. Obtain confirmation for the specific investment before committing to the policy.
Do I have to declare it on my French return?
A French resident must examine the annual declaration required by article 1649 AA for contracts with insurers established outside France. This is separate from declaring any taxable gain on a withdrawal. The fact that you made no withdrawal does not, by itself, remove the policy-reporting requirement.
ÉTHIQUE ET PATRIMOINE, a French simplified joint-stock company (SAS), registered office at 41 rue Saint-Ferdinand, 75017 Paris, France, Paris Trade Register no. 803 414 796, VAT no. FR 40 803 414 796, registered with ORIAS under number no. 24001817 (www.orias.fr) — Financial investment adviser (CIF) no. 18002418, member of ANACOFI-CIF, a professional association approved by the Autorité des marchés financiers, and Anacofi-Courtage for its brokerage activity. Presence: Paris, Montpellier, London, Singapore, Hong Kong, Bangkok, Shanghai and Dubai.
Discuss a Luxembourg contract
Book a callWritten by Stéphane Molère, President of Éthique et Patrimoine — page last reviewed on 2026-09-15 — reference date for the rules: 2026-09-07.