American looking to eventually obtain citizenship

[blast19]

Hello all, hopefully someone can help me. My wife and I would like to move to France to live for some number of years. We're both quite keen on eventually obtaining French citizenship and would like to make sure that we have a good chance of doing so in the future if we are to spend a number of years there.

My wife is from Mexico and I am from the US. We are financial investors and can show adequate income/financial stability to satisfy the French authorities and need not work. As far as I can tell, we should be able to meet any and all requirements they may have to grant us residence visas.

The trickier part is understanding how difficult it may be for us to apply for citizenship in 5 years. The last thing we want to do is assimilate into a culture and spend a good portion of our young lives in a country that may kick us out, particularly if said country is somewhere that we would like to be citizens of. Does anyone have any insight into how difficult it would be for 2 such people to eventually obtain citizenship if we do assimilate into the local culture and are self-sufficient financially?

It really is important to us that if sometime down the line we will have the opportunity to become citizens.

Thanks in advance,
d

[Bevdeforges]

The first big hurdle you have to overcome is getting a long stay visa in the first place. It isn't so much a matter of how much money you have (in fact, that attitude can actually get in your way), but rather what reason you can give for wanting to live in France - especially if, as you claim, you will not be working to support yourselves.

As French residents, your worldwide income is subject to French income taxes - so if you have income, you are considered at some level to be "working" while residing in France. If you are working in France and paying taxes, you have to sign up in some manner for the "cotisations" (social insurances - health, retirement and family allocation).

Once you are legally resident in France, however, taking French nationality is a fairly straightforward process. Acquisition de la nationalité française par naturalisation - Service-public.fr

There are, however, a couple of interviews you have to get through. I know one American couple that came up against an official who basically took a dislike to them (for some reason) and declared that as long as he was handling their dossier, they would never get French nationality. It had something to do with the official being a Communist and the husband of the couple being a big shot entrepreneurial type. I lost touch with the wife a few years ago, so I haven't heard whether or not they tried again for French nationality. But other than voting, it doesn't really make much difference once you have residence rights.
Cheers,
Bev

[blast19]

Bev, thanks for such a quick reply.

A few questions.

With regards to us getting the stay visas, does the reason we would like to live in France come up at the initial interview in the US? Does that mean it's up to the discretion of the person interviewing us?

My work is done through US investment firms and I'm actually not technically "employed" but am a full time caretaker of my financial portfolio. How is it that France can tax you on your foreign income yet you are unable to work? That sounds incorrect, at least in my circumstance. I'm sure you know what you're talking about but about what about double-taxation treaties?

Hope you can possibly answer those few questions.

Best regards,
d

[Joppa]

Most likely, but the issue of a long stay visa is eventually decided by a French ministry in Paris, as all applications are sent on for processing there.
This isn't specifically about France, but EU countries are getting hot on people who try to live in their country but deriving income from abroad. The authorities often decide that regardless of the source of income, the fact you are ordinarily resident (and presumably deriving benefit from living there) makes you liable to local income tax. As there is double-taxation treaty between the two countries, you won't be taxed twice (any French tax you pay will be fully deductible), but you still have to complete US and French tax returns.
As for naturalisation, additionally you both need to show you are well integrated into the French society and be able to speak French to a level of fluency that makes it possible. You will have an interview with an official, entirely in French. Exception is made for those who are married to a French national.

[blast19]

Thanks Joppa, I appreciate your response.

I understand the EU's worry about people residing in the EU but deriving income from abroad. It makes plenty of sense and I'm sure there are double-taxation treaties that deal with this issue. I will have to research it more.

As per integration with society that is the least of my concerns. If we live in France for 5 years and manage not to enmesh ourselves in the culture and don't speak fluent French we've got other issues.

Cheers!

Originally Posted by Joppa

Most likely, but the issue of a long stay visa is eventually decided by a French ministry in Paris, as all applications are sent on for processing there.
This isn't specifically about France, but EU countries are getting hot on people who try to live in their country but deriving income from abroad. The authorities often decide that regardless of the source of income, the fact you are ordinarily resident (and presumably deriving benefit from living there) makes you liable to local income tax. As there is double-taxation treaty between the two countries, you won't be taxed twice (any French tax you pay will be fully deductible), but you still have to complete US and French tax returns.
As for naturalisation, additionally you both need to show you are well integrated into the French society and be able to speak French to a level of fluency that makes it possible. You will have an interview with an official, entirely in French. Exception is made for those who are married to a French national.

[frogblogger]

Originally Posted by blast19

My work is done through US investment firms and I'm actually not technically "employed" but am a full time caretaker of my financial portfolio. How is it that France can tax you on your foreign income yet you are unable to work? That sounds incorrect, at least in my circumstance. I'm sure you know what you're talking about but about what about double-taxation treaties?

Hope you can possibly answer those few questions.

Best regards,
d

Residency is the deciding factor, as Joppa says. Six months and one day p.a, in France, and you will be subject to French taxation, including on investments abroad. If your family is ordinarily resident in France and you are out of France for more than six months, you can still find yourself caught in the net. As a resident benefiting from the likes of the French health system, you are expected to contribute as would any other citizen.

The double taxation agreement applies with respect to the UK to of course, and there is simply no way I can legally avoid taxation on my income, whatever the source. Believe me, I've taken a serious interest in this over the past twenty years! There were some convoluted tax haven trust loopholes in years gone by, but such options are rapidly diminishing.

[blast19]

I'm confused how that would work. If I derive a $10k gain on the sale of some stock, does that mean France and the US would expect their fair share(~30-50% each)?! There must be a way around that.

Also, as a long-term stay visitor you are, from what I've read, required to prove that you have full healthcare coverage during the time you are a resident in France. Therefore you are not leeching on their social healthcare because you have comprehensive coverage from outside.

Can you clarify if you actually pay into the UK tax system and French tax system. That would mean that you'd pay somewhere between 70-80% of your income in taxes between the 2. I don't mind paying taxes to France, I'd rather pay it to France than the US at this point, so that would be fine with me. Just trying to understand this concept.

Originally Posted by frogblogger

Residency is the deciding factor, as Joppa says. Six months and one day p.a, in France, and you will be subject to French taxation, including on investments abroad. If your family is ordinarily resident in France and you are out of France for more than six months, you can still find yourself caught in the net. As a resident benefiting from the likes of the French health system, you are expected to contribute as would any other citizen.

The double taxation agreement applies with respect to the UK to of course, and there is simply no way I can legally avoid taxation on my income, whatever the source. Believe me, I've taken a serious interest in this over the past twenty years! There were some convoluted tax haven trust loopholes in years gone by, but such options are rapidly diminishing.

[frogblogger]

Once you are resident you are entitled to share in all manner of public service benefits - whether or not you take up those options is not really relevant. Imagine the paperwork involved in deciding who is and who is not profiting from those services - it would be an impossible task. It would be akin to saying 'why should I pay taxes to contribute towards repairing public roads - I don't have a car'

Many services in France are subsidised - if you send your kids to the local aikido club, chances are part of the subscription is subsidised. And obviously schoolteachers are paid for by taxes, police, defence, etc etc.

No I don't pay any personal UK taxes, and haven't since moving to France. As long as I am a French resident my personal tax declaration covering all income is lodged in France. However the US has its own procedures, and Bev is best placed to advise you on this.

[blast19]

Thanks, I guess not having used socialized healthcare I didn't imagine you can just walk in somewhere and not have to prove that you are covered by the state. From reading other people's posts I did see that there is a need to have your own healthcare insurance. I saw this on the French government's website dictating what one applying for a long-stay visa would need proof of. Why would that be if you're able to use the social healthcare and are paying taxes in?

If I didn't have to pay US taxes it would make sense but I trade US stocks on US exchanges and therefore it's hard to imagine that France would be able to claim those gains since they're tied tightly to US market. Sticky subject perhaps.

Thanks for the replies.

[frogblogger]

Again, Bev is the one to ask about the situation for long-stay visa holders from outside the EU. But just to make a comparison, I have been (tax) resident in Thailand for a while. As such, dividends from shareholdings in UK companies, earned and paid in the UK, are taxable in Thailand. If I traded on a stock market abroad the same would apply. The profits are calculable on an annual basis, and this figure should go on the tax return. And in Thailand there is no socialised healthcare system.