US persons in France: what you can actually own
Americans in France live under two tax systems at once, because the US taxes citizens wherever they live. Most French products were not designed for that. Some work, some are traps, and telling them apart is the whole game.
A US citizen or green-card holder living in France files a return in both countries every year: the United States taxes its citizens on worldwide income wherever they live, and France taxes its residents on that same income. The France–US treaty prevents most double taxation, but it does not make the two systems agree on what a financial product is. That mismatch, not the treaty, is what makes ordinary French investments unsuitable for Americans — and it has to be settled product by product, before anything is bought.
The two constraints that shape everything
- FATCA: French banks identify US persons and report them, through the French tax authority, to the IRS under the France–US agreement of 14 November 2013 — and many simply refuse them as clients, so the first practical problem is often just opening accounts;
- PFIC: most French and European funds are Passive Foreign Investment Companies for US tax purposes, with a punitive reporting and taxation regime that can erase any return. Whether the funds inside a French assurance-vie are reached by that regime is not settled: depending on how the contract is built, US law may treat it as insurance, as an investment product, or look through the wrapper to the underlying funds. There is no general answer — the contract has to be characterised, document in hand, before you buy it.
What tends to work
Direct lines of listed securities rather than funds; US-domiciled funds where access is possible; specifically designed insurance contracts accepting US persons with compliant underlying assets; and real estate, which both systems treat comprehensibly. The France–US treaty of 31 August 1994, amended by successive protocols, is one of the most detailed France has signed and contains credit mechanisms found nowhere else, designed to blunt the effect of US citizenship-based taxation on certain categories of income — but they must be claimed correctly on both returns.
Your own reporting obligations, separate from what your bank reports
FATCA is what your French bank reports about you to the IRS. It is not what you report about yourself, and the two obligations run on separate tracks with separate penalties. As a US person you must report your own foreign financial accounts directly — FBAR (FinCEN Form 114) once aggregate foreign account balances cross the filing threshold, and Form 8938 with your federal tax return for specified foreign financial assets above its own, different threshold. Retirement accounts, French assurance-vie contracts and ordinary bank accounts can all fall within scope. Satisfying one of these obligations does not satisfy the other, and neither has anything to do with how much French tax is owed — this is compliance, not taxation, and it is one of the most commonly missed pieces of an American's French file. The French side of the same picture — what a French resident, of any nationality, owes to French authorities on foreign accounts and contracts — is covered in Reporting foreign accounts, contracts and trusts in France.
Forced heirship applies whether or not you write a US will
As a French resident, your estate is generally subject to the réserve héréditaire described in French succession law: forced heirship, explained calmly, regardless of what your US will provides, unless a valid election of US law is made under Regulation (EU) No 650/2012. That election interacts with, but does not replace, US federal estate tax and the state-level rules that continue to apply to a US citizen wherever they live in the world. French succession law and US estate law interact throughout the planning, and addressing them one after the other, once something has already happened, tends to close options that were still open earlier.
Frequently asked questions
Can a US citizen open an assurance-vie in France?
Most insurers refuse US persons, and a standard contract filled with European funds creates PFIC problems anyway. A small number of contracts are designed for US persons with compliant underlying investments — the selection is narrow but real.
Why do French banks refuse American clients?
FATCA makes every US client a reporting obligation with penalties for mistakes, so many retail banks decline rather than comply. Private banks and specialised institutions do accept US persons — knowing which ones saves months.
Do I pay French social charges on my US investment income?
As a French tax resident you owe French social charges on your investment income, French and foreign alike. The relief available to people affiliated to a social-security scheme in the EU, the EEA or Switzerland does not extend to a US scheme (CJEU, 18 January 2018, Jahin, C-45/17). What the France–US position does give you is the other half of the equation: since the two governments' 2019 understanding, the IRS no longer disputes that CSG and CRDS are creditable French taxes for US foreign-tax-credit purposes. The saving lands on the US return, not the French one, so the two returns have to be prepared together.
Do I need to file an FBAR if I already report my accounts through FATCA?
Yes. FATCA is what your French bank reports about you to the IRS; FBAR and, where it applies, Form 8938 are what you report yourself, directly, as the account holder. They are separate obligations with separate penalties, and satisfying one does not satisfy the other.
Does French forced heirship affect US estate planning?
It can. As a French resident your estate is generally subject to the French réserve héréditaire regardless of your US will, unless a valid election of US law is made under the EU Succession Regulation — and that election interacts with, but does not replace, US federal estate tax and state-level rules that still apply to a US citizen wherever they live. Coordinating both from the outset is what keeps the estate plan coherent on each side of the Atlantic.
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, Singapore, Hong Kong, Bangkok, Shanghai and Dubai.
Map my US-French situation
Book a callWritten by Stéphane Molère, Président d'Éthique et Patrimoine — page last reviewed on 2026-08-27 — rules quoted are those in force at that date.