Investment structures for expatriates: 5 key options

TL;DR:

• The selection of an asset structure should be based on criteria such as security, liquidity, taxation, control and transmission.
• Simple structures like securities accounts or assurance-vie are suitable for modest assets and flexibility, while trusts and foundations offer better protection for large assets.
• It is essential to adopt a progressive and personalized approach, adapting the structure to the evolution of the family and financial situation.

For an expatriate managing assets across multiple continents, balancing security, control, and inheritance within a multi-jurisdictional framework requires meticulous precision. Cross-taxation, geopolitical instability, and varying inheritance laws from one country to another transform every wealth management decision into a complex balancing act. Choosing the wrong structure can cost years of optimization or expose family assets to unnecessary risks. This comparative overview guides you through the main investment structures available, their advantages, limitations, and the criteria for selecting the one that truly suits your situation and objectives.

Key Points

Understanding the criteria for choosing an investment structure

Before comparing different financial institutions, it is essential to establish a rigorous analytical framework. Too often, expatriates choose an institution out of habit or on the advice of a banking intermediary whose interests are not aligned with their own. An informed choice rests on five fundamental criteria.

• Asset security : the structure must protect the assets against legal uncertainties, potential creditors and geopolitical risks in the country of residence.
• Liquidity Some profiles need quick access to their funds, particularly in cases of frequent mobility or change of tax residence.
• International taxation : the structure must be compatible with the bilateral tax treaties in force between the country of residence and the country of origin, to avoid double taxation.
• Effective control : the expatriate must retain real control over his investments, even if the legal structure involves a third party (trustee, manager, etc.).
• Family transmission and protection : the structure must facilitate the estate planning and protect the designated beneficiaries.

These criteria are not all equal depending on the profile. A family with minor children will give absolute priority to inheritance, while a senior executive in a position of rapid mobility will prioritize liquidity and administrative simplicity.

“"THE Complex structures offer superior protection for succession, whereas simpler structures prioritize liquidity.”

L'’international wealth engineering It consists precisely of weighting these criteria according to the client's actual situation, not according to a standardized model. asset audit A preliminary step is therefore essential before any structural choice.

It is also necessary to anticipate how the situation will evolve. A structure that is perfectly suited today may become unsuitable in the event of a return to France, marriage, the birth of a child, or the sale of a business.’tax optimization for expatriates It must therefore incorporate a dimension of reversibility from the design stage.

Simple structures: ordinary securities accounts, assurance-vie, ETFs

Simple structures often constitute the first level of wealth structuring for expatriates. Accessible, flexible, and relatively inexpensive to set up, they effectively meet short- to medium-term liquidity and diversification needs.

THE ordinary securities account (CTO) It allows you to invest in stocks, bonds, funds, and ETFs (exchange-traded funds) with no investment limit. It is available in most countries and can be held in multiple currencies. Its main strength is complete flexibility: no time constraints, and withdrawals are possible at any time. Its major drawback is tax-related: capital gains and dividends are taxable annually, according to the rules of the country of residence and applicable tax treaties.

L'’multi-country assurance-vie It is a particularly powerful tool for expatriates. It allows them to accumulate financial assets within a protected legal framework, with deferred taxation on gains and transfer outside of inheritance in many jurisdictions. Luxembourg contracts, for example, offer a unique regulatory security triangle in Europe and an open architecture that provides access to institutional funds.

THE ETF Exchange-traded funds (ETFs) are index funds listed on the stock exchange that allow for geographical and sector diversification at low cost. They are ideal for building a liquid and high-performing core portfolio, often held in a securities account or assurance-vie policy.

• Immediate access to funds
• Reduced management costs
• Geographic and sectoral diversification
• Taxation can be complex depending on the country.
• Risk of asset freezing in the event of a dispute or change of tax residence

CTOs and ETFs are suitable for expatriates seeking flexibility and quick access to their funds, but they are not a sufficient solution for large estates with inheritance issues.

Consult our guide on the international wealth management to understand how to combine these tools effectively.

Pro tip: For an expatriate who frequently relocates, Luxembourg assurance-vie often represents the best compromise between liquidity, optimized taxation, and estate planning. It can be maintained regardless of the subsequent country of residence.

Advanced structures: trusts, foundations and offshore companies

When assets exceed a certain threshold, or when inheritance and protection become priorities, advanced structures become essential. They are more complex to implement, but their effectiveness in safeguarding assets and planning succession is unparalleled.

1. The trust A trust is an Anglo-Saxon legal structure in which a settlor transfers assets to a trustee for the benefit of designated third parties (beneficiaries). It is particularly used for intergenerational transfers and protection against creditors.
2. The foundation It is an autonomous legal entity, with its own assets, used particularly in civil law jurisdictions (Liechtenstein, Panama, Cayman Islands). It offers a clear separation between the founder and the assets, while allowing for structured family governance.
3. There holding company offshore It allows for the consolidation of holdings in several entities under a single structure, with tax optimization on dividends and capital gains. It is often used by international entrepreneurs.

Among the most sophisticated structures, Reserved Powers Trusts in the Cayman Islands deserve special attention. Reserved Powers Trusts allow for strategic control without jeopardizing the trust's validity, representing a significant advantage for families wishing to maintain control over their investments while benefiting from enhanced legal protection.

“The Private Trust Company (PTC) is a variant that allows the family to directly control the trustee, further strengthening governance and confidentiality.”

These structures involve more complex administration: reporting requirements, annual incorporation and management costs, and the choice of jurisdiction (Caymans, Jersey, Singapore, Dubai, etc.). The choice of jurisdiction is strategic and depends on the settlor's country of residence, the assets held, and the intended beneficiaries.

To explore the wealth management expatriation companies To understand how they fit into an overall strategy, a personalized analysis is necessary. international risk management is also a determining factor in the choice of jurisdiction.

Pro tip: Never establish a trust or foundation without first analyzing the tax transparency rules of your country of residence (CFC rules, FATCA, CRS). A poorly designed structure can create more problems than it solves.

Comparative table of structures: selection criteria according to profile

To facilitate decision-making, here is a summary table comparing the main structures according to the essential criteria for an expatriate.

This table illustrates the contrast between immediate liquidity (CTO/ETF) and asset protection (trusts, foundations): these two objectives are rarely optimized simultaneously by a single structure.

Some key points to remember from this comparison:

• An expatriate with assets of less than 500,000 euros will generally favour a securities account or assurance-vie for their simplicity and lower cost.
• Between 500,000 and 2 million euros, a holding company or Luxembourg assurance-vie becomes relevant.
• Beyond 2 million euros with family or inheritance issues, the trust or foundation becomes the preferred tool.

The real estate dimension also deserves to be included in the discussion. Securing your real estate assets internationally often involves holding through a French property holding company (SCI) or an equivalent structure in the country concerned, combined with a holding company for consolidation.

Recommendations based on profiles and objectives

There customization of structural choices Depending on the desired level of control and legal exposure, effective arbitration is possible. Here are four typical profiles and their associated recommendations.

1. The young expatriate executive (Ages 30-40, frequent mobility, assets being built up): priority is given to liquidity and simplicity. A multi-currency securities account combined with Luxembourg assurance-vie provides a solid, scalable, and low-cost foundation.
2. The family with children (estate assets, inheritance issues): transfer becomes a priority. A holding company combined with a assurance-vie policy with an optimized beneficiary clause, or even a trust if the assets exceed 2 million euros, is recommended.
3. The international entrepreneur (Business sale, reinvestment): An offshore holding company allows for optimized capital gains tax on sales and reinvestment within a structured framework. The choice of jurisdiction (Dubai, Singapore, Luxembourg) depends on the country of residence.
4. The expatriate rentier (passive income, capital protection): the foundation or trust offers the best long-term protection, with clear family governance and prepared transfer.

Each A moment in the life of an expat This represents an opportunity to reassess the existing structure. A marriage, a birth, a return to France or a new expatriation are all triggers for a review of assets.

Why simplicity and agility are key when living abroad

There is a real temptation among wealthy expatriates to want to structure everything from the outset. The fear of making mistakes, combined with sometimes alarmist advice, leads some to create complex and costly structures long before they actually need them. This is often a mistake.

An overly complex structure for a growing portfolio generates disproportionate administrative and tax costs. It ties up assets in illiquid vehicles and complicates future adjustments. Flexibility, in expatriation, has a value that is systematically underestimated.

Experience shows that the best-managed assets are those whose structure has evolved gradually, in line with the realities of the family and tax situation. Starting simple, documenting assets, optimizing current taxation, and then strengthening the structure at the opportune moment: this step-by-step approach produces the best long-term results.

There expatriate wealth management strategy The most effective solution isn't necessarily the most sophisticated. It's the one that perfectly matches your current situation, while remaining adaptable. Reversibility is a valuable asset in its own right.

Build your customized wealth management strategy with Balmont Conseil

Every expatriate deserves a wealth management strategy tailored to their individual needs, built on a rigorous analysis of their tax, family, and geographical situation. Balmont Conseil assists expatriates, executives, and high-net-worth families in selecting and implementing the structures best suited to their objectives.

Thanks to certified expertise in expatriate support and an open architecture with complete banking transparency, our firm offers a personalized wealth assessment. Whether you are in the process of building, protecting, or transferring your wealth, our experts in international taxation and legal structuring will work with you to identify the optimal solution. Discover our services. international wealth management and schedule an appointment for an initial confidential and no-obligation consultation.

Frequently asked questions about investment structures for expatriates

What structure should I choose to protect my family's assets as an expatriate?

For substantial assets with inheritance considerations, trusts or international holding companies offer enhanced protection and estate planning Effective. Reserved Powers Trusts allow for advanced protection and control, while maintaining clear family governance.

What are the advantages of a assurance-vie policy taken out from abroad?

Assurance-vie policies taken out abroad, particularly in Luxembourg, offer flexible access to funds, deferred taxation on gains, and easier inheritance for beneficiaries in an international context. The policy remains valid regardless of the subsequent country of residence, making it a particularly suitable tool for those with a mobile lifestyle.

Is an offshore structure mandatory when setting up a business outside of France?

No, alternatives like securities accounts or multi-country assurance-vie policies are often better suited to mobile profiles or average assets, without the administrative complexity of an offshore structure. Offshore structures only become relevant above a certain level of wealth and with specific protection or inheritance needs.

How to strike a balance between liquidity and asset protection?

Expatriates generally prefer a simple structure for liquidity and a complex one for protection and family transfer. The contrast between liquid options (securities accounts/ETFs) and advanced protection (trusts) illustrates the need for a two-tiered approach for substantial wealth.

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