Macron’s political crisis prompts French businesses to move record levels of wealth abroad

The continuing political unrest within the French government has set off a mass exodus of French capital, with entrepreneurs and wealthy families observed to be channelling record sums into Luxembourg and Switzerland.

Wealth managers, bankers, and lawyers have traced the start of this capital flight to President Emmanuel Macron’s decision to call snap parliamentary elections last June, according to an article by the Financial Times.

The election fractured France’s National Assembly and led to a series of unstable governments, most recently culminating in the ousting of former Prime Minister François Bayrou and the chaotic resignation — followed by the sudden reinstatement — of his successor, Sébastien Lecornu.

As prime ministers have come and gone, the current government under Macron ally Sébastien Lecornu has turned to imposing new taxes on top earners in an effort to close a widening budget deficit.

“The majority of assets we handle are no longer in France but going to life insurance contracts in Luxembourg, it’s really accelerating,” said Guillaume Lucchini, founder of Paris-based wealth management firm Scala Patrimoine, which serves professional athletes and entrepreneurs, in comments to the publication.

The flow of funds into Luxembourg has been “nonstop” since last year’s election, according to Olivier Roumélian, a tax lawyer working with insurers in the Grand Duchy. He added: “Brokers barely have to do any marketing work to get clients.”

Lucchini noted that a “crazy” amount of capital was also heading to Switzerland, where his firm operates a branch.

According to the report, French clients’ investments in Luxembourg-based life insurance — a popular annuity-style savings product that, like its French equivalent, offers tax breaks if held for more than eight years — surged by more than 58 percent in 2024 to €13.8 billion, marking their highest level on record, according to data from Luxembourg’s insurance regulator.

These investment flows are just one consequence of France’s ongoing political instability. Some wealthy families have even relocated abroad, though no precise figures are available — a trend reminiscent of the U.K. following the Labour government’s decision to end favorable tax treatment for so-called “non-domiciled” residents.

"A lot of French moved to Switzerland between 1980 to 2010 or so. But you saw a real slowdown when Macron was elected [in 2017] and people hoped things would be better. Now that is picking back up,” said Philippe Kenel, a Swiss-based lawyer specializing in tax, estate, and wealth planning.

The Financial Times article recalls that the pro-business, centrist Macron came to power eight years ago and swiftly abolished France’s wealth tax, replacing it with a less burdensome levy on property.

However, his capacity to implement further business-friendly reforms before the end of his final term in 2027 has been significantly limited since his decision to hold snap parliamentary elections last year.

By Nazrin Sadigova