If you are a French resident with around €100,000 to put into ETFs, the single decision that will move your after-tax result the most is not which fund you pick. It is which envelope you hold it in. France gives you three: the PEA (Plan d’Épargne en Actions), the assurance-vie, and the plain CTO (Compte-Titres Ordinaire). Same €100,000, same global market, wildly different tax outcomes over ten or twenty years.
The honest short answer is that most people investing this sum should use more than one wrapper. The PEA is the most tax-efficient home for the equity core, but it only accepts European-eligible funds and caps your contributions. The CTO takes any ETF in the world with no limit, but you pay the flat 31.4% tax on gains. Assurance-vie sits in between, earning its keep mainly on succession and on very long holding periods. Below is how I think about splitting real money across the three, with the caveats that matter.
One thing before the detail: tax rules and rates here are 2026-vintage and I am describing the mechanics, not giving you a personal tax opinion. Confirm the current figures and your own situation with a conseiller fiscal or on the official French tax pages before you commit a sum this size.
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See the full curriculum — €147, 30-day guarantee →The three French wrappers in plain terms
Every one of these is just a container. The ETFs inside can be identical in spirit (a global or US or European equity fund); what changes is how France taxes the growth and the withdrawals.
The PEA is a share-savings plan with a hard rule: it can only hold shares and funds domiciled in the EU/EEA, or ETFs that track any index but are structured to qualify. Leave your money in for five years and you escape income tax on the gains entirely, paying only the social charges (prélèvements sociaux) of roughly 18.6%. The trade-off is a lifetime contribution cap of €150,000 and the European-eligibility restriction.
The assurance-vie is a life-insurance contract that happens to be a superb investment wrapper. You choose from the fund menu your insurer offers (unités de compte), which increasingly includes ETFs. After eight years you get a reduced tax rate and an annual gains allowance, plus meaningful succession advantages that no other wrapper matches.
The CTO is the ordinary brokerage account. It holds anything: a global all-world ETF like VWCE, US-domiciled funds where accessible, single stocks, bonds. There is no cap and no eligibility list. In return you pay the prélèvement forfaitaire unique (the PFU or “flat tax”) of 31.4% on gains and dividends, made up of 12.8% income tax and 18.6% social charges.
PEA: the near-tax-free wrapper with a European catch
For a French resident building a long-term equity position, the PEA is usually the first envelope to fill. After the five-year clock, your gains are only hit by social charges. On a €100,000 pot that doubles over a decade, the difference between paying ~18.6% and paying 31.4% on the €100,000 of growth is roughly €12,800 kept in your pocket. That is not a rounding error.
The catch people trip over is the “European only” rule. You cannot simply buy a physically-replicated FTSE All-World or S&P 500 ETF inside a PEA. What you can buy is a range of PEA-eligible ETFs that use synthetic replication (a swap) to deliver the return of a global, US, or emerging-market index while technically holding European securities. Amundi and iShares both offer PEA-eligible MSCI World and S&P 500 trackers built this way. They are legitimate and widely used, but they carry swap counterparty risk and you should understand that structure before relying on it. If you want to read more on how those synthetic funds differ from the plain physical version, our note on comparing UCITS ETFs lets you line them up side by side.
The other limit is the €150,000 contribution cap. With €100,000 you are comfortably inside it, but bear it in mind if you plan to keep adding for years. If you run out of PEA room, the overflow goes to a CTO or assurance-vie.
Assurance-vie: the succession and eight-year play
Assurance-vie is where French investors and expats often overthink things. As a pure ETF-growth vehicle it is rarely the cheapest, because contracts layer their own management fee (frais de gestion) of maybe 0.5–0.85% a year on the unit-linked portion on top of the ETF’s own cost. Over decades that drag compounds against you.
Where it genuinely shines is two situations. First, after eight years you get an annual allowance on gains withdrawn (around €4,600 for a single person, €9,200 for a couple) and a reduced income-tax rate below that, which makes it efficient for slow, planned drawdown. Second, succession: sums paid in before age 70 pass to your named beneficiaries with a large per-beneficiary allowance largely outside the normal inheritance-tax scale. If passing money on efficiently is part of your plan, this is the wrapper that does it.
Practical tip: if you go this route, choose a low-cost online contract with genuine ETF options and no entry fees, not a bank’s in-branch contract stuffed with expensive in-house funds. The fund menu is only as good as the contract you sign.
CTO: total freedom, flat 31.4% tax
The CTO is the wrapper for everything the PEA will not hold. Want a physically-replicated global ETF, an Irish-domiciled S&P 500 fund, or a specific sector or bond ETF? The CTO takes it, with no cap. The price is the flat 31.4% PFU on realised gains and on dividends, though you can elect for the progressive income-tax scale instead if that works out better for your bracket.
Because the tax lands when you sell, an accumulating ETF inside a CTO still defers the drag on reinvested dividends until you dispose of shares, which is one reason accumulating funds tend to suit this wrapper. If you are weighing accumulating versus distributing for a taxable account, our guide on accumulating vs distributing ETF tax walks through the trade-off, and the EU dividend tax calculator lets you estimate the withholding leakage on a distributing fund.
How the three wrappers compare
| Feature | PEA | Assurance-vie | CTO |
|---|---|---|---|
| What it can hold | EU/EEA-eligible ETFs and shares (incl. synthetic world/US trackers) | Only funds on the insurer’s menu (some include ETFs) | Any ETF or security worldwide |
| Tax on gains | Social charges only (~18.6%) after 5 years | Reduced rate + annual allowance after 8 years; social charges on assurance-vie gains stayed at 17.2% when the PFU rose | Flat 31.4% PFU (or income scale) |
| Contribution cap | €150,000 | None | None |
| Extra fees | Broker fees only | Contract management fee ~0.5–0.85%/yr | Broker fees only |
| Succession benefit | No special treatment | Large per-beneficiary allowance | Normal inheritance rules |
| Best suited to | Long-term European-eligible equity core | Succession and 8-year+ drawdown | Global all-world ETFs the PEA can’t hold |
Rates and thresholds above are approximate for 2026 and can change in a finance law. Verify the current figures on the official French tax authority pages at impots.gouv.fr before acting.
What I’d do with €100,000
My default plan for a French resident with a long horizon and no urgent income need: open a PEA and make it the equity core, holding a PEA-eligible world or S&P 500 tracker, and fill a decent chunk of it. Because you are under the €150,000 cap, the PEA can absorb most or all of the €100,000 if you are happy inside its eligible universe. That gives you the near-tax-free growth after year five.
If you specifically want a physically-replicated global ETF like VWCE, or you have run out of PEA room or eligible options you trust, put that sleeve in a CTO and accept the 30% on eventual gains. Reserve assurance-vie for the money you are thinking about in estate-planning terms, or if you know you will draw it down slowly after eight years. Do not use it as your only wrapper just because a bank adviser recommended it; the fees usually make it the wrong first choice for pure accumulation.
Whatever the split, start with the broker and contract, not the fund. Our rundown of the best broker for French investors in 2026 covers who offers a low-cost PEA and CTO, and if you want to compare the tax bite across borders before you settle, the European capital gains tax comparator is a quick sanity check.
Frequently asked questions
Q: Can I hold a global all-world ETF like VWCE in a PEA?
A: Not the physical version. A PEA can only hold EU/EEA-eligible funds, so to get world exposure you use a PEA-eligible synthetic ETF that replicates a global index via a swap. Amundi and iShares both offer such trackers. If you insist on physically-replicated VWCE, hold it in a CTO instead.
Q: How much tax do I actually pay when I sell from a PEA after five years?
A: Only the social charges, currently around 18.6% on the gain, with no income tax. Before the fifth anniversary a withdrawal is taxed more heavily and normally closes the plan, so the five-year clock is the key milestone. Confirm the current social-charge rate before you withdraw.
Q: Is assurance-vie worth it just to invest in ETFs?
A: For pure growth, usually not on its own, because the contract’s annual management fee stacks on top of the ETF cost and drags on returns. It earns its place when you value the eight-year tax allowance for drawdown or the succession advantages for passing money to beneficiaries. Choose a low-cost online contract with real ETF options if you use it.
Q: What is the flat tax (PFU) on a CTO?
A: The prélèvement forfaitaire unique is a flat 31.4% on realised gains and dividends, split into 12.8% income tax and 18.6% social charges. You can elect for the progressive income-tax scale instead if your bracket makes that cheaper. The tax applies when you sell or receive a dividend, not while the fund grows.
Q: Should I split my €100,000 across all three wrappers?
A: Often yes. A common approach is to build the equity core in a PEA for the tax break, add any global or physical ETFs the PEA can’t hold in a CTO, and use assurance-vie only for succession or long-horizon money. The right mix depends on your goals, so treat this as a framework rather than a recommendation.
Q: Does the €150,000 PEA cap include my investment gains?
A: No. The cap is on the money you pay in, not on the value of the plan. Your contributions are limited to €150,000 over the life of the PEA, but the account can grow well beyond that through market gains without breaching the limit. A couple can each hold their own PEA.
European UCITS/ETF investor with 11+ years building a global dividend and index portfolio, and founder of Financial Expert Class. I write every guide here from first-hand experience investing across EU brokers and tax regimes — not theory. More about me →