The PEA (French equity savings plan) and CTO (regular brokerage account) are the 2 main wrappers to invest in stocks from France. PEA offers tax exemption after 5 years but restricts eligible stocks. CTO accepts everything but no tax advantage. Here's how to choose based on your strategy.
The PEA (Plan d'Épargne en Actions) was created in 1992 to encourage French citizens to invest in European companies. Main benefit: total income tax exemption on capital gains after 5 years holding (only 17.2 % social contributions remain due). One of the most generous tax breaks in the French system.
Limits in 2026: - Classic PEA: €150,000 contributions (gains can exceed this without limit) - PEA-PME: additional €225,000 (combined cap of €225K total between classic PEA and PEA-PME) - Young PEA (18-25 attached to fiscal household): €20,000, convertible to classic PEA at 25
Eligible stocks: - Companies listed in the European Economic Area (EU + Norway + Liechtenstein + Iceland) - UCITS ETFs investing at least 75 % in EEA companies - Some synthetic swap ETFs replicating non-European indices (S&P 500, Nasdaq 100, Emerging) while remaining legally eligible
Not eligible: - Direct US, Japanese, Chinese stocks - British stocks (since Brexit in 2020) - Bitcoin, crypto ETFs, NFTs - Bond ETFs, direct bonds - "Physical" ETFs on non-European indices (except synthetic swaps)
PEA fee structure: - Account maintenance: €0-30/year depending on broker (free at Bourse Direct, BoursoBank; €30/year at some traditional banks) - Transaction fees: €1-5 per order depending on volume - Internal arbitrage fees: generally free (buying/selling between securities within PEA doesn't trigger taxation)
Exiting PEA: before 5 years, any withdrawal = mandatory closure + 30 % flat tax. After 5 years, free withdrawals without closure, exemption maintained.
The CTO (Compte-Titres Ordinaire) is the simplest investment account in France. No cap, no eligibility restriction, access to all global markets. Trade-off: no tax advantage.
CTO advantages: - Access to all markets: US stocks (Apple, Tesla, Nvidia), Japanese, Chinese, British - All instrument types: stocks, physical ETFs, bonds, crypto ETFs, funds, options, futures, ETPs - No cap: you can deposit hundreds of thousands of euros, even millions - Free withdrawals anytime, no closure - Multiple accounts: you can have several CTOs at multiple brokers
Default taxation: 30 % flat tax (PFU, Prélèvement Forfaitaire Unique): - 12.8 % income tax - 17.2 % social contributions - Total: 30 % on capital gains AND dividends
Alternative option: progressive income tax scale (0 % to 45 %), advantageous only if your tax bracket is ≤ 11 % (first bracket). In that case, gains taxed at 11 % + 17.2 % = 28.2 % total. Annual global choice (all gains + dividends together).
Flat tax on foreign dividends: beware of withholding tax on US dividends (15 %), Japanese (15 %), German (26 %). Partially recoverable via French tax credit — but complex paperwork (form 5000-FR, bilateral tax treaties).
CTO fees 2026: - Trade Republic: €1/order, free for automatic investment plans - Interactive Brokers: 0.01 % to 0.05 % per order, no maintenance fees if > €100K - DEGIRO: €1 + variable commissions - Saxo Banque: €5-10 per order depending on market - BoursoBank, Fortuneo, Bourse Direct: €1.99 to €9 depending on volume
When CTO becomes indispensable: - You want to trade Apple, Tesla, Nvidia directly → impossible in PEA - You hold > €150K in stocks → PEA limit reached - You do active day-trading → CTO accepts more instruments - You want to invest in bonds → only CTO accepts them
Take a €100,000 investment in a Eurostoxx 50 ETF, assuming 7 %/year annualized return over 10 years, dividends included.
Scenario A — Classic PEA: - Capital after 10 years: 100,000 × 1.07^10 = €196,715 - Gross capital gains: €96,715 - Income tax: €0 (exemption after 5 years) - Social contributions 17.2 %: €16,635 - Net capital after tax: €180,080
Scenario B — CTO with 30 % flat tax: - Capital after 10 years: €196,715 (identical gross) - Gross capital gains: €96,715 - Flat tax 30 % on gains: €29,014 - Net capital after tax: €167,701
PEA advantage: €12,379 (a ~7.4 % additional net gain thanks to PEA).
For €1 million over 20 years at 7 %/year: - PEA: €3,869,684 net after social contributions - CTO: €3,411,932 net after flat tax - Gap: €457,752 in favor of PEA
The advantage becomes massive over long durations and large amounts. The triumph of fiscal compounding — your tax-free gains in turn generate gains for years.
Optimal 2026 strategy (the classic "stack"):
This order maximizes net after-tax return over 20-30 years.
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