“Clients in a Panic State”: Deluge of Wealthy French Seek Relocation After Extreme Left’s Electoral Victory

Moustafa Daly
Cairo

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France’s recent parliamentary elections have left the country’s wealthiest residents increasingly concerned about the potential for political and fiscal instability. Many high-net-worth individuals (HNWIs) now seriously consider leaving the country to protect their assets. The deeply divisive campaign and resulting hung Parliament have sparked fears among the rich about the possibility of sharply higher taxes and an exodus of wealth and talent from France.

During the four-week campaign period, wealth advisers reported a surge in calls from panicked clients seeking guidance on how to safeguard their finances, according to a Bloomberg report. Some have already taken steps to move capital abroad and have begun investigating the process of expatriation. 

“Private bankers, wealth managers, and tax lawyers in Paris have already announced a 30% increase in calls from clients in a panic state asking for solutions,” reveals Bastien Trelcat, Managing Partner of Harvey Law Group Thailand, to IMI Daily. 

“Life insurance plans in Luxembourg are selling like hotcakes, and landlords are calling their realtors to test the market’s appetite about their properties. There is a clear trend that HNWIs are preparing to exit,” he adds. 

The culprit behind this is the recent snap elections, in which a leftist coalition garnered over 31% of Parliamentary seats. 

“The left and possibly the far-left will have significant influence over the next government, and its policies will include more taxes, especially on the rich,” explains Philippe May, CEO of EC Holding, to IMI Daily. 

The election outcome simply can’t be ignored by French HNWIs, says May. “French HNWIs would be naïve if they didn’t react to this election. Many higher and new taxes will be coming, and many wealthy French have been thinking of leaving before. Some already started with the preparations now,” he reveals.

Far-left politicians proposing extortionate tax rates

HNWIs fear that lawmakers, particularly from the left-wing New Popular Front alliance, could undo tax relief measures implemented under President Emmanuel Macron. Lawmakers may also push through policies such as reinstating a broader wealth tax, reviving an exit levy, and overhauling succession rules to include a cap on inheritance.

Trelcat warns that the worst-case scenario is a potential coalition made of far-left ministers who, during the campaign, did not conceal their agenda to levy extreme taxes on the incomes of the rich.  

Some far-left politicians, adds Trelcat, have proposed a wealth tax bracket of an eye-watering 70% for households making over €400,000 per year. Such proposals have alarmed France’s wealthy.

This wouldn’t be the first exodus of HNWIs from France in recent years.

“Over the past four decades, France’s culture of levying tax has always created waves of HNWIs emigration towards places like the US, Canada, or London but also Brussels, Luxembourg, and other options within the EU area,” explains Trelcat.

This time around, they have more options to consider.

New fiscal destinations for France’s HNWIs emerge

Popular destinations now include Italy, Dubai, Bangkok, Singapore, and the United States, May and Trelcat agree.

“The biggest winners are Dubai, Bangkok, or Singapore; even Hong Kong or Saudi Arabia,” says Trelcat, who lives in Bangkok. “I might be biased, but Thailand is where I see the greatest number of inquiries.”

But many wealthy French are still considering their options and are unsure where to go, says May.

“But tax-friendly Uruguay, with its French schools, is [one good option],” elaborates May. “The Bahamas is another one. Interestingly, the Channel Islands are not in demand in spite of the proximity; maybe too British of a lifestyle or just too small. Many French consider Switzerland as well, but it makes sense only for a few as the costs (lumpsum taxation) are high.”

May adds that many wealthy French are considering other EU jurisdictions, like Monaco, with more attractive tax rates, even if it means giving up their French citizenship and pursuing another one, which was rarely an option before for HNWIs in France.

“Second passports were never popular among the wealthy French, but we have seen a spike in demand,” reveals May, adding that his firm will start promoting second passports combined with renunciation of French citizenship, which would allow wealthy French to settle in Monaco. According to a special treaty between France and Monaco, France can tax French citizens living in Monaco as though they were still residents of France.

Beyond HNWI emigration, the French political landscape is inconducive to business

According to media reports, the uncertainty surrounding France’s political future has already led some individuals to defer decisions on investments, hiring, and real estate deals until there is greater clarity on the country’s future direction.

An outflow of wealth from France could deal a significant blow to the country’s economy. According to the 2024 UBS Global Wealth Report, released before the election, the number of dollar millionaires in France (nearly 3 million individuals) is on track to increase by 16% over the next five years, underscoring the country’s status as a hub for wealth creation and accumulation, cemented after Brexit, which made Paris an EU-alternative for London-bound HNWIs.

The situation in France mirrors broader trends across Europe, where the rise of populist movements on both the left and right is causing unease among the wealthy. In the United Kingdom, the recent election of a Labour government led by Prime Minister Keir Starmer has raised the prospect of higher taxes on top earners, while in Italy, Prime Minister Giorgia Meloni’s government has rattled markets with euro-skeptic rhetoric.

As the global economy continues to navigate the fallout from the COVID-19 pandemic and geopolitical tensions, the flight of wealth from countries perceived as unstable or unfriendly to capital is likely to accelerate.

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