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PREPARING FOR EXPATRIATION – Published on 25/04/2021

 

 

 

You’ve finally decided to do it, you’re moving abroad. It is exciting and it feels like a new step. Except you have administrative decisions to make. And one of them: should you close your French bank account? Of course, for the first few days, having a bank account is important. But what is your best option further down the road?

 

 

 

Table of contents

 

 

Keeping your French account: what are you leaving behind?

Bank account and non-resident status

Bank facilities for expats

What to do if you close your account in France?

 

Before even thinking of closing your account in France, you should find out about the conditions for opening a bank account in your host country. Can you open a bank account remotely before arriving? What are the deadlines and conditions for obtaining a bank card? How are the banks organized in your host country? In what currency will you be paid if you have a job there?

Banking systems and what banks offer in terms of facilities and conditions differ depending on where you are in the world.

 

Keeping your French account: what are you leaving behind?

 

Keeping an account in France seems obvious if you are leaving for a short period of time or if you keep financial ties with France.

If you have an outstanding loan or are considering applying for one, you will be required to keep your French account.

The same thing applies if you will be renting out a house in France: you cannot ask your tenants to pay the rent into a foreign account. Having a card for when you visit France will also be easier.

 

« It is true that more and more banks and money transfer platforms allow you to make international transfers and withdrawals at a lower cost, but if you plan on visiting France fairly regularly it will be easier and will save you a lot of money to have a French bank account  »

 

Bank account and non-resident status

 

Moving from France to another country may give you access to non-resident status with respect to the French tax authorities.

 

To be a non-resident for tax purposes, four conditions apply:

  • you must no longer have your main home in France,
  • you must not carry out any professional activity in France (paid or not),
  • you must not be physically present in France for more than 182 days a year and
  • your main economic interests should not be in France.

 

If you keep a bank account in France and you become a non-resident, you will have to inform your bank, because some types of accounts will no longer be available to you. This is the case, for example, for youth passbooks and sustainable development passbooks that you will have to close before your departure.

 

You can keep your Livret A and B passbook accounts, life insurance policies and PEL housing savings plans, but you will not be able to open new ones.

 

What is the point of becoming a non tax resident?

 

This status provides tax advantages such as the non-taxation of interest on savings accounts or the exemption from the Impôt sur la fortune immobilière (IFI) for foreign real estate.

 

 

Bank facilities for expats

 

If there is anyone who can help you decide on whether or not to close your French account, it is your banker.

 

In general, when withdrawing money from outside the eurozone, banks charge a fixed fee and a variable fee, for example, one euro per transaction + a percentage of the amount withdrawn or paid. The foreign bank may also charge fees. This can quickly add up. Fortunately, many banks have special offers for their customers who go abroad. For example, you may be entitled to a certain number of payments and withdrawals abroad without any fees.

 

To reduce your bank fees in France, you can also keep your account open, but ask not to have a credit card anymore. Nevertheless, Visa and MasterCard are usable in many countries, so it may be worth keeping them.

Finally, you should know that some banks have agreements with foreign banks, to reduce fees and facilitate international transfers.

As you can see, there are several options.

 

 

What to do if you close your account in France?

 

If you close your account in France, how will it work when you visit? This is a legitimate question.

The first thing to do is to check with your foreign bank to find out what are the fees for using your card abroad.

 

If these fees are very high, you can withdraw money before leaving and change it into euros or use a money transfer service. But not everyone is comfortable carrying a large amount of cash. You should know that money transfer options have changed a lot in recent years. Depending on the currency, fees are low and you can afford to make multiple transfers depending on your needs.

 

You can also have one account that allows you to store multiple currencies. If your traditional bank doesn't offer anything special for people going abroad, don't hesitate to turn to money transfer services or online banks, which are often more advanced in this area.

 

 

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