French PEA


A French PEA is a Plan d’Epargne en Actions, which is a tax-efficient investment cover for residents of France.


It allows French investors to buy and sell European securities with preferential conditions. In English, a PEA it is kind of a stock savings plan, similar to stocks and shares ISA.

They were created in 1992 with the intention of encouraging French residents to invest in the stock market. Which at the time was experiencing very low participation.  To clarify, individuals are eligible if they live in France or an overseas French territory.

This tax-friendly investment format, lets you manage a portfolio of European securities. While benefiting from preferential tax conditions.

It consists of an Asset Account and a cash account for your payments, capital gains from selling assets or dividends and other incomes pending their reinvestment.

PEA-eligible mutual funds must have a permanently minimum 75% of shares in companies with their headquarters in an EC member state. Or, in an EEA (European Economic Area) state that has a tax agreement with France. Including a clause on combating fraud and tax avoidance. 

These mutual funds must be established in an EC member state or EEA state subject to the same conditions as defined above.


The primary benefit of a French PEA is its tax appeal.

Investors can profit from increases in stock prices and dividend payments in a favorable tax environment. There is a minimum five-year holding period. But after this has passed, any profits made in a PEA are exempt from tax.

It is a simplified stock savings plan because a PEA account contains both a securities account and a cash account. The cash account is debited when a security is purchased and credited when a security is sold or a company pays dividends.

Although a PEA can accommodate all kinds of securities, including equities and tracking funds. It cannot hold short-term investments such as options, spread bets or CFDs.

Any securities are subject to specific restrictions, in order to qualify for the tax benefits. 

The only eligible assets are those of French companies. And companies with their headquarters within the European Union or a European Economic Area that has a tax agreement with France, such as Norway or Iceland.

The total amount of cash held in a French PEA cannot exceed a set level.  Hence, the account is subject to restrictions on withdrawals of cash. Any withdrawals before the five-year minimum holding period are complete will be subject to tax and the account may cause the closing of the account.