+10% dividends when holding French Stocks directly for a long time

Investing / Others
1

I recently learnt that French law allows to pay a 10% higher dividend to investors who held their shares for over two years.
Some of shares that offer this benefit also give other goodies to shareholders, like discounts (Seb/Tefal/…), Free tickets (Compagnie des Alpes)… (Nothing that would in itself justify the investment, but “free stuff”!)

Furthermore, the law is written in such a way that prevents large shareholders - including the largest ETFs - to avail of this benefit. (One single shareholder can only get the increased dividend for up to 0.5% of the total capital)

IBKR doesn’t allow registering shares under your own name in France (I opened a ticket to ask), so you’d need a french broker to take advantage of this. I used one called “Fortuneo” , there are many others.

In any case this isn’t world shattering, but still good to know if you like the idea of owning some specific French shares.

2

You might actually lose more if the dividend is paid to you directly instead of being passed through an Irish or Luxembourg ETF…

3

Are you thinking about withholding tax on dividends? I simply filled a form to be exempted, I can confirm no tax were withheld:

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4

I know mainly Air Liquid as company that perform well and offer this kind of benefits.

However, you also need to know that if you purchase/sell big French capitalisation (> 1 Billion euros), you will be entitled to pay the 0,3% of TTF (Taxe sur les transactions financières) for each transaction.

Furthermore, I wouldn’t recommend to invest in any French company where the state (CDC, BIPE …) is involved such as Compagnie des Alpes.

Have you check if SaxoBank allow you to register themas nominatif administré ?

5

Ah yes, I meant to discuss the positive aspect of owning French shares under your own name, not to recommend that specific investment. For me it’s a “Feel Good” investment: I like the venues they operate and I like that they have the social/societal mandate that you mention. I understand this limits expected returns.

(This being said, it doesn’t look too terrible financially, in my humble opinion, with a rather high dividend plus tax-free benefits)

It seems that they do and that they charge 10€/line for the service.

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6

Having your French stocks with a french broker is optimal from a dividend tax point of view.

However note that you become subject to the French estate tax when you die and that whatever assets you had in France will require some effort for your wife / kids to retrieve and if you have quite some money there pay taxes to the French state.

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