FRANCE Law and Practice Contributed by: Elodie Mulon, Jennifer Tervil, Romane Lemaitre and Emmanuelle Bonboire-Barthélémy, Chauveau Mulon & Associés
management, which naturally discourages high-risk strategies. Lastly, if the settlor has doubts or concerns, they may appoint a third-party monitor to ensure their interests are protected during the execution of the contract. This third party may exercise the powers attributed by law to the settlor. If the settlor is a natural person, this right cannot be waived, and the fiduciary must be According to modern portfolio theory, developed by Harry Markowitz in the 1950s, financial risk is reduced when income sources are numerous and uncorrelat - ed. This theory promotes diversification by selecting securities based on their correlation with other assets in the portfolio, with the goal of maximising returns. In France, however, fiduciary investment is guided by the principle of independent asset management, prioritising capital preservation and prudence over performance. There is no legal requirement for diver - sification, although it is often recommended as a pre - cautionary measure, where feasible. Diversification may not be practical where the transferred assets consist of a single real estate property or equity inter - est in a company. In such cases, the fiduciary may effectively manage the business, but only within the limits of the powers transferred by the settlor. There are no specific legal prohibitions on holding or managing active business - es within a fiducie , but the fiduciary must always act in accordance with the fiduciary purpose and under the same obligations of prudence and accountability. notified of the appointment. 6.4 Fiduciary Investment 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship Domicile is a legal concept that corresponds to the place of a person’s principal establishment. It is defined by Article 102 of the Civil Code as being unique and obligatory. It is determined subjectively, based on the individual’s desire to fix the centre of
their interests in a given place, even if they are not physically present there. Residence, on the other hand, is a material and de facto concept. It refers to the place where a person actually and habitually lives on a stable basis. Domicile is a legal concept based on a legal relation - ship, whereas residence is a concrete reality based on facts. Domicile is determined by the individual’s will, whereas residence is determined by the person’s actual and habitual location. A person can have only one domicile but can have several residences. In France, French citizenship is the same as French nationality. It is acquired at birth as of right by virtue of birth or residence in France: • when a child is born to French parents; or • when a child is born in France to foreign parents they may acquire French nationality on reaching the age of majority, provided that they are resident in France on that date and have had their usual residence in France for a continuous or discontinu - ous period of at least five years since the age of 11. Residence is taken to mean actual place where a per - son lives in a stable and permanent manner, coincid - ing with the centre of the person’s attachments and daily activities. 7.2 Expeditious Citizenship People born abroad can acquire French nationality either by declaration or by naturalisation. The declaration procedure is open to people who are related to a French national. • Acquisition of French nationality by marriage to a French national: (a) the spouses must have been married for a period of four years from the date of marriage; (b) the spouses must have lived together both emotionally and materially from the date of marriage until the declaration; and (c) the spouse must have sufficient knowledge of the French language.
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