Anyone thinking about buying or renting a property in France or living or setting up a business in France, will need to open a bank account.
You will find that France has a abundance of financial institutions, all offering a comprehensive range of financial services. There are, however, a number of differences between other countries and the French banking systems and you should make yourself familiar with them to avoid frustration and subsequent problems.
The main players in the French banking system are the private sectors banks (the three largest are Credit Lyonnais, BNP Paribas and Société Générale), the co-operative banks (such as Crédit Agricole, Crédit Mutuel and Banques Populaires) and La Poste (La Banque Postale).
Opening a bank account may sometimes be difficult, depending on the bank, especially as a foreigner. You will be asked to bring many documents to back up your status as a permanent resident in France.
When you will finally open an account, you will start with a current account (compte courant or compte chèque). Your account will be designated as resident or non resident. This is an important distinction and is related to your tax situation. A bank will open a resident account for those who are fiscally resident in France.
You will be considered a French resident if:
- Your family home (foyer) is in France;
- or you have your principal place of stay in France. This includes:
- Spending more than 183 days in France in a given calendar year;
- or spending less than 183 days in France but you have moved to a permanent home in France;
- or being a tax resident of no other country and making regular, substantial visits to France, but not necessarily more than 183 days in a given calendar year
- or you work in France - employed or self-employed and it is your main activity;
- or you have your centre of economic interest in France.
This is a subject where specialist advice can be necessary (please contact one of our French lawyers for more information), but generally speaking if you fulfil one of these three conditions, you will be judged as resident in France for tax purposes. Otherwise, a non-resident account will be opened for you.
Please note that under the law, interest cannot be paid on French current account. There are two solutions. The first involves using one of the range of savings accounts. The second is to open an account at a bank that provides a remunerated current account. Please note that there is a fee applied on remunerated current accounts, based on the average balance in the account. However, if you are likely to have big amount on your account, it is a solution worth considering.
Should you opt for the first solution (i.e. opening a non-remunerated current account), you may considering opening a saving account (compte d'épargne). There are various types of savings accounts offering different interest rates and attracting different tax exemptions on interest earned. The most popular is the Livret A, which earns interest tax-free and from which withdrawals can be made instantly.
Once you will have opened a bank account, you will often be asked for a RIB (relevé d’identité bancaire) which are your contact details and can be found in your chequebook and bank statements.
Unlike other countries, cheques remain a very popular means of payment in France. You will need to produce your passport or a valid Identification Card when issuing a cheque. Please note that post-dating a cheque is not permissible and is ineffective as it can be cashed immediately.
Bank charges in France are still higher than in most other countries, even for routine operations. Furthermore, banks do not usually pay interest on current account although they are supposed to do so by virtue of a recent decision of the European Court of Justice.
Please note that becoming overdrawn or exceeding an overdraft limit without prior agreement is a serious matter in France. It is extremely unwise also to issue a cheque without funds in your account (cheque sans provision). Such a cheque will be returned to the payee who will ask for some other means of payment. If he is not paid within a period of 30 days, he is entitled to obtain a certificate of no-payment (“certificat de non paiement”) from the bank which will allow him to contact a bailiff in order to have the money deducted from the issuer’s salary, or arrange for his/her goods to be seized and sold. The costs of this procedure are added to the amount owed to the payee.
Those who have issued such cheques will find that their account will be frozen until they have put sufficient funds in the account and the payee has re-presented the cheque. They will also have to pay additional substantial bank charges per cheque wrongly issued, plus fines if they have bounced more than three cheques within a period of (twelve) 12-month period. Furthermore, they will not be able to open or operate any other bank account in this period as they will be listed in the Banque de France. Therefore, if you believe having issued a chèque sans provision, you should inform the bank local manager immediately in order to find an amicable agreement.
Furthermore, please note that you can only stop a cheque if it has been lost or stolen (and not if you have a dispute with the payee).
Large transactions paid for by cheque (such as payment by cash to purchase a property) are usually made by banker's draft (chèque de banque) or by a bank certified cheque (chèque certifié) for which charges are made.
At the same time as your current account is opened, you might want to apply for a payment card.
These are in very very wide use and are issued and managed by the banks. Usually ther are debit cards rather than credit cards. Three types of cards are available from most banks:
- Carte bleue "nationale" : This can be used for payments in shops and to withdraw money from DAB (Distributeur Automatique de Billets) - i.e.: ATMs, in France only;
- Carte bleue VISA which is the most widely held card. It can be used in France and internationally;
- Carte Premier : This is a VISA gold card. MasterCard offers a similar product.
American Express and Dinners Club are less widely accepted.