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Published on Tuesday 28/07/2015

In a judgment of 8 July 2015, No. 14-17880, the 1st Civil Chamber of the Cour de cassation (French Supreme Court)  points out that under Articles 8 and 13 of the Hague Protocol of 23 November 2007, the parties may choose the law that will be applicable to the compensatory allowance equated to a maintenance obligation under the above provisions, as it is not contrary to international public policy of the State in which the court has been seized. She reminded that the removal of the compensatory allowance is contrary to French international public policy.


In this case, a married couple in Germany, domiciled in France, had included in their marriage contract a clause excluding any compensatory allowance under German law or any other law, in case of divorce. Then the couple domiciled in France, comes to divorce before the French courts. The wife applied for a compensatory allowance. The Court of Appeal of Metz has dismissed the application considering that the claimant had waived in advance any compensatory allowance.

The Cour de Cassation reversed  the decision considering that if the spouses had a flexibility to designate the country's law applicable to that maintenance obligation and therefore the compensatory allowance, however, it was necessary to apply in the matter, the requirements of conflict of laws dictated by the provisions of the Protocol of 23 November 2007 mentioned above. Therefore, the removal of the compensatory allowance shall be deemed to be contrary to international public order of the country of the court (i.e France).


This case-law invites future international couples too often unaware of the conflict of law rules both in their property relations that in the event of divorce, must always be aware of the complexity of the matter and the issues at stake by inviting them to establish a preliminary feasibility study in close collaboration with the councils of the various countries involved in the operation, before drafting a marriage covenant in any capacity, and at the cost of  later difficulties, whose resolution will be infinitely more costly than the study prior and the establishment of an appropriate agreement.


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Tags : Contract International couple Expatriation Divorce

Published on Wednesday 03/06/2015

1) Matrimonial property regime in an international context


Matrimonial property regime ("régime matrimonial") is a civil law concept. It governs the property, administration and power to dispose of the property of the spouses. Its rules apply between the spouses but can also be opposed to third parties.


Common law and Muslim law countries ignore this concept: each spouse is deemed the owner of his own property and has the administration and the power to dispose of them.


We also remind that each country has its own tax and legal rules and own proper law rules, which can lead to a conflict of laws.


Thus, when people from different nationalities marry or when spouses with the same nationality live abroad or buy property abroad, they must be careful regarding the regime of their property.



2) Permanent matrimonial property regime or change of the matrimonial property regime


The possibility to change matrimonial property regime is not always granted, depending on the country.


In civil law countries, the change of matrimonial property regime in the said country, requires the intervention of a "notaire" ("acte notarié"), to which might add, depending on the country, a court authorization and/or some actions to inform third parties.


As far as international private law is concerned, the change of matrimonial property regime is subject to specific rules.

In French international private law, a distinction is made between spouses married before or after September 1st, 1992:

- For couples married before this date, the matrimonial property regime is set once and for all, as a general rule, in the state where the couple fixed its first domicile after the marriage, if they have not drafted a marriage contract,

- For couples married after the entry into force of the Hague Convention of 14 March 1978 (1 September 1992) and if they have not designated an applicable law, French citizens or residents are exposed to an eventual automatic change of the matrimonial property regime, i.e. it will be governed by the law of the country of their residence, either after 10 years when they dwell in a country other than their country of common citizenship, or right away if they move in their country of common residence.

Ex. 1: a couple of French citizens has always lived in the USA after their marriage and move back to France a few years afterwards. The spouses divorce. In this case, there are two consecutive matrimonial property regimes: the first one subject to American law from the marriage until they move back in France (property acquired during this time frame will belong to either one of the spouses according to American law), and the second one from once they move in France onwards (property acquired during this time frame will belong to either one of the spouses according to French law).

Ex. 2: A couple of married Swedish citizens decide to come to France and stay there for more than 10 years, after first living in Sweden. Here again, in case of a divorce or death of a spouse, there will be two successive matrimonial property regimes: the first one from their marriage until they move to France, and the second one from when they move to France onwards, since they stayed in France more than 10 years.


The proposal of European Regulation of March 16th, 2011, if it is voted as is, will put an end to the automatic change of the matrimonial property regime. Thus, the law governing the matrimonial property regime will be set once and for all unless the parties agree otherwise. The law governing the matrimonial property regime will be determined depending on objective criteria such as (i) the first residence of the spouses after the marriage, (ii) their common nationality or (iii) the law of the State with which, taking all circumstances into account, it is most closely connected.



3) Fixation of modification of the matrimonial property regime with a choice of the spouses


An express choice of the spouses will allow them to fix or change their matrimonial property regime.


French spouses who decide to marry of live abroad or the non-French citizens who decide to reside in France after their marriage must (i) either, at least designate the law that will govern their matrimonial property regime or (ii) draft a marriage contract which form and content will be governed by the designated law. The choice of the applicable law is not allowed: only the law of the citizenship or residence can be designated.


Non-French citizens who decide to buy real estate property in France can designate French law in order to govern only this real estate property. We would like to specify that this can be very useful and that foreign buyers tend too often to buy real property in France assuming that the inheritance will follow the rules of their country of residence.


French citizens or residents for more than 10 years, regardless of the date of their marriage, can designate the law applicable to their matrimonial property regime according to the same citizenship or residence criteria, which will have the advantage to apply to all their property, not only for the future but also for the past (from their marriage until the change, which is not the case for automatic change). They can make as many change as they want.


For more information, see the Website of the European Commission on this subject (available in 27 languages), the Convention of The Hague on matrimonial property regime (in English and in French) and the interview Bruno Bédaride gave to the Groupe Les Echos (in French).


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Tags : Expatriation International law Real estate investment

Published on Thursday 20/11/2014

French tax system, as most tax systems, currently ignores citizenship as a criterion to determine the tax jurisdiction of a State. Indeed, the most common criterion is tax residence, which definition varies from one country or tax convention to another.


As we announced earlier in an article dealing with the transfer of residence outside of France without risks, the importance of nationality in the determination of the tax jurisdiction of a State is going to increase, up to replace the tax residence concept, as in United States of American tax system.


In order to illustrate this, we recall that France is about to ratify a tax treaty with the Principality of Andorra, which contains a clause allowing France to tax its citizens living in Andorra, in order to permit tax evaders taxation.


In other words, as we explained it, an expatriation project requires to study beforehand the conditions of acquisition of the hosting country citizenship, and the consequences of giving up his birth nationality in order to avoid some taxes. This is why I warned candidates to departure and advised them to take the measure of their project, his consequences, by means of realisation of a multidisciplinary written study regarding the pros and cons of an expatriation before rushing into a premature decision.


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Tags : International tax law Taxation Expatriation

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The interdisciplinary expertise of the Selarl Bruno Bedaride, notaire in Paris covers the following areas: corporate law, international contracts law, legal and tax advice, advice for international transmission, real estate law, family office, real estate and company finance law. We offer more particularly our services to non residents or foreign company who wish to invest, move or create a business in France.