Investing in France is a strategic and attractive approach for expatriates and foreigners. With a dynamic real estate market, favorable tax conditions such as the LMNP status, and opportunities for professional support through turnkey solutions like Beanstock, France stands out as an ideal ground for building wealth.
Let us decrypt together the reasons that make France a preferred choice, the advantages of its real estate market, and the strategies for investing effectively.
The advantages of investing in France for expatriates and foreigners
A Strong Economy and a Resilient Real Estate Market
France remains one of the most powerful economies in Europe, offering a stable environment for investors. The French real estate market, supported by strong rental demand, is characterized by stable prices and resistance to economic fluctuations. It is also, for foreign investors, a stable investment and a way to protect their capital, particularly by investing in cities like Paris.
Attractive borrowing rates: Despite a recent increase, borrowing rates in France remain lower than those in other countries such as the United States or the United Kingdom.
Rental indexation to inflation: This unique feature enhances the profitability of long-term investments.
A Constantly Growing Rental Demand
With a growing population and a shortage of new housing, rental demand remains high. France, as a country largely built over several decades, faces real construction constraints. At the same time, there is a constant increase in the population in city centers, which are becoming increasingly pedestrian-friendly. This context provides a favorable framework for those living in the center, enhancing the attractiveness of properties located in major metropolitan areas.
Paris, Lyon, Nantes: These cities offer strong rental demand, ideal for investors seeking stable returns.
Student housing and shared accommodations: These segments show profitability rates ranging from 5% to 10%.
Real estate investment: a unique tax opportunity
France offers a tax reduction scheme for owners renting out furnished properties, allowing investors to pay very little or even no tax. This scheme presents a unique tax opportunity for foreign investors by providing them with a solution to optimize their rental income. Moreover, Paris, recognized as one of the cities with the highest rents in the world, has a square meter price still lower than those of New York or London, thereby enhancing the appeal of real estate investment.
The LMNP regime:
Tax Reduction: With the micro-BIC regime, 50% of rental income is exempt from taxes.
Real Regime : Allows for the deduction of costs and depreciation of the property, potentially reducing the tax to zero.
Flexibility of use: Suitable for expatriates with high income outside of France.
The LMNP regime is ideal for small areas for student use or shared housing.
Investing in France: a complex legal framework
Investing remotely, especially from abroad, can be complex. Indeed, the legal framework in France is particularly complex, making the support of an expert essential to secure and optimize your project.
Thus, the support from a turnkey rental investment company remains a preferred solution. The benefits of such a service:
Time-saving: no travel necessary
Security: experts handle all stages of the project
Maximum profitability: tax optimization and choice of the best properties
What type of investment for expatriates and foreigners?
For foreign investors, certain types of properties are particularly attractive. We often recommend what is called heritage investment, as it offers increased security in terms of capital protection. Heritage properties, often located in city centers, benefit from high rental demand and ensure long-term appreciation.
Moreover, these properties can have a personal use, for example to accommodate children who would study or work in a major metropolis. Investing in characterful housing in cities like Paris, Lyon, or Bordeaux not only secures rental income but also helps build a lasting family estate.
A foreign investor can diversify their wealth by buying in France as opposed to cities like Dubai, where returns are often more attractive but accompanied by a higher risk. France offers a unique balance between profitability and stability, thereby enhancing its appeal to international investors.
How to finance your real estate investment in France as a foreigner or expatriate?
Financing is a key step for any investor, and French banks offer several unique advantages. They allow for fixed-rate borrowing, ensuring stability of repayments over the long term. Moreover, it is possible to finance not only the property itself but also renovation work and accompanying fees.
For foreign investors, banks often require a larger down payment, but this criterion can vary depending on your relationship with the financial institution and your situation. However, individuals holding French nationality generally have easier access to loans, especially with lower down payments. This advantage, combined with the flexibility of banks to finance complete projects, makes investing in France attractive for a wide range of investors.
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