The Bottom Line.
In this Insight, Fidinam Hong Kong Managing Director Nicolas Michaux explores the issue of expatriation and real estate investment. Expatriation is an important topic in the region, which welcomes many entrepreneurs and executives from all over the world. The question is, therefore, how does investment in real estate work when you are far from home? Here is some food for thought.
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Expatriation and Real Estate Investment in France: Insights from Nicolas Michaux
An expatriate for almost 5 years, Nicolas MICHAUX is at the service of individuals and companies wishing to benefit from tax and wealth management advice. As Managing Director of Fidinam Hong Kong Limited, his expertise covers several jurisdictions. Among them, Hong Kong, Singapore, Vietnam, Dubai, Switzerland, and the United Kingdom are just some of the countries that need to be compared to determine the legal and tax framework that will meet the needs of their clients.
The following is an interview made and originally published by Crédit expat (CE).
Credit Expat: Hello Nicolas, thank you for accepting this interview. First of all, could you tell us how attractive is real estate investment among the French expatriates and non-residents you meet as part of your work? In your opinion, is this one of their recurring concerns?
Nicolas MICHAUX: A week rarely goes without me hearing one of my fellow expatriates express the wish to invest in real estate, particularly in France. I think that many French people are naturally very attached to stone in general, expatriates or not. The fact that a non-resident invests in real estate assets in France is also a way of keeping in touch with the country, and an anchor point, in addition to the purely patrimonial aspects.
EC: What is different in the approach for a French resident and a French non-resident when it comes to investing in real estate?
NM: A French resident will first want to acquire his main residence while there is more talk of rental investment for non-residents. Remoteness can be a difficulty in finding the right property and financing. Indeed, the problems linked to remoteness are real when we talk about real estate investments, whether to identify the property or, would this not be the target city, rental management.
And of course, financing from bankers who are no longer our main banks, most often because of our expatriation. Hence the importance of being accompanied by professionals specialized in expatriates.
Above all, it should also be borne in mind that the tax portion is different, particularly in terms of the progressiveness of income tax, even if the subjection of non-residents to social security contributions has somewhat smoothed out the differences in tax treatment between residents and non-residents.
CE: On the basis of your experience, what are the main questions that arise when you are an expatriate or a non-resident and you wish to carry out a real estate project?
NM: The first question, of course, remains “where”. In which country and then in which city to invest. Financing methods are also crucial, as they will also result in variable tax consequences. My advice often goes to underwriting fixed-rate loans, given the low-interest rates and the tax deductibility of interest on loans.
It is also necessary to consider how to buy: in a company (SCI); in its own name, indivision, dismemberment? These considerations depend on the strategy of each individual, including the willingness to plan estate transfers to the spouse or children.
EC: Which profiles are most affected by these issues?
Nicolas MICHAUX: all profiles are concerned, including employees, young executives, and experienced managers.
CE: Can you tell us about your own experience: why did you choose to move abroad? Do you find yourself in this type of problem on a personal basis?
NM: I had been traveling regularly to Asia for professional reasons since early 2010 when I was self-employed. I had the opportunity to join a large group with an international presence. It was an opportunity to come and work in Hong Kong, which is probably the ideal marriage between East and West.
The persistent crisis in Europe and the difficulties associated with exercising an independent profession also motivated my departure for Hong Kong, where the entrepreneur is much less hindered.
I find myself completely in the problems of the people I meet when we talk about real estate investment in France, even if since my expatriation, I have not reinvested in France where I already have some properties.
This nonetheless allows me to fully understand the situation of my compatriots. The desire to invest in France often responds to the desire to prepare for the future, to build up additional income for retirement, or even to plan a medium-term return to France. The services of a real estate credit consultant in France, in Hong Kong, undoubtedly constitutes a valuable help and asset to obtain the best financing conditions, thus saving time and energy.
Nicolas Michaux | Managing Director, Fidinam Hong Kong Office.
Nicolas Michaux is the Managing Director of the Hong Kong office of Fidinam, an integrated and multidisciplinary consultancy with offices in Europe and Asia, specialized in tax advisory services.
Nicolas graduated in 2000 in France (Nancy) in Master legal advisory (Diplôme de Juriste Conseil d’Entreprise – DJCE) and Tax and Business Law (DESS Droit des Affaires et Fiscalité). He has over sixteen years of experience in international tax advisory, wealth and estate planning, in France, Luxembourg and Hong Kong.
Disclaimer: The views expressed are those of their author(s) only and do not reflect those of The Asia-Pacific Circle or of its editors unless otherwise stated.
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