Setting up a business
Rules, regulations, paperwork and registering as self-employed
For many people who decide to up sticks and move to France, starting a business or selfemployment is often the easier, preferable or, in some cases, the only way to earn a living. That said, it’s not necessarily the easy option when it comes to getting started. There are, as ever, processes and procedures to follow, and when you’re in a foreign country which has different ways of doing things, not to mention a different language, it can seem a very big mountain to climb.
But don’t worry, you just have to do what we all do when faced with a daunting task – take it step by step…
The business plans and feasibility studies are looking good, but there’s another factor to take into account before you give yourself the green light – do you have, or can you obtain, the necessary qualifications and licences related to your chosen line of work?
Your UK diplomas and work experience aren’t necessarily sufficient. You may well be required to pass an equivalent French exam or do further training to validate your work experience for the relevant French governing bodies.
Secondly, make enquiries about possible financial aid available from regional and local authorities, as well as any specific sector funding – for example, sustainable development-related activities in rural areas are often subsidised.
Similarly, depending on your location and type of business, you might be eligible for business creation loans or subsidies. There are a number of organisations that can help you with this type of early research, including the AFE (l’Agence France Entrepreneur), your local chamber of commerce, or the local Communauté/ Agglomération des Communes.
Before doing anything, you must register your business with the relevant body and get yourself a SIRET or SIREN number, essentially a business identity number, issued by INSEE. This number must appear by law on all your invoices.
The safest and simplest way to register is to go to the CFE (Centre de Formalités des Entreprises) in person, particularly if you would also like some advice about the best legal statute for your business. When you register, you will be asked for proof of any requisite qualifications, licences and accreditations.
SOCIAL WELFARE BODY
The French business sector is basically divided into four categories: commerce; tradespeople and artisans; freelance professions and agricultural workers. Depending on your business, you will be affiliated to the relevant social welfare fund that will collect your social contributions ( charges sociales).
Currently, the majority of self-employed people are registered with the RSI (Régime Social des Indépendants), although the new president Emmanuel Macron has talked about effectively scrapping this fund and affiliating selfemployed workers to the same welfare regime as salaried workers. This is expected to happen from 1 January 2018. The CFE, as well as professional bodies such as the Chambres de Commerce et d’Industrie and Chambres de Métiers, can assist you with all the relevant paperwork.
CHOOSING A LEGAL STATUTE
You may want to take professional advice at this point, because there are various possibilities, some with very subtle differences, and making the right choice can potentially save you money (in both tax and national insurance payments), and give you the necessary legal protection ( see overleaf).
Most people setting up as a sole trader or freelancer register as an entreprise individuelle. And within this category, most people choose the tax regime option of a micro-entreprise, which enables the business to benefit from simplified tax, accounting and administration processes. In addition, as a micro-entreprise, you are not subject to VAT.
The two main criteria that determine whether you can benefit from the microentreprise system are:
a business must have no more than 10 employees (not an issue for sole traders).
annual turnover must not exceed €82,800 for sales activities, or €33,100 for service providers. (Turnover thresholds
applied in 2017.) Again, Emmanuel Macron promised, in his election manifesto, to double these turnover limits to enable more businesses to take advantage of the simplified regime. As a micro-entreprise, you are required to: • register the business and provide proof of qualifications.
• pay annual business rates to the CFE based on a sliding scale according to revenues – the minimum charge in 2017 is €214. (For revenues up to €10,000 the rates are between €214 and €510, from €10,001 to €32,600 rates are between €214 and €1,019.) • attend a five-day business start-up
training course (Stage de Préparation à l’Installation) which costs between €200 and €300. • certain building traders must reference
a 10-year warranty insurance ( assurance décennale) on all estimates and invoices. • register trading activities with the local CCI or Chambre de Métiers.
So, the definition micro-entreprise refers to a type of tax regime, and this is not to be confused with setting up as a microentrepreneur, which is a legal statute. Most likely, you will choose to become a micro-entrepreneur who benefits from the micro-entreprise tax regime.
The micro-entrepreneur statute replaced the auto-entrepreneur statute last year. It basically seeks to simplify the calculation and payment of national insurance contributions ( charges sociales) to make it easier in the early years of starting up a business.
Many businesses will automatically outgrow the statute, however for anyone who simply wants to earn a basic living working for themselves, you can remain a micro-entrepreneur indefinitely.
As well as the EI ( entreprise individuelle), there is the EIRL ( entreprise individuelle à responsabilité limitée) which allows you to protect your personal estate from any financial liability. Depending on your circumstances and type of business, this could be a better option. HELPING HANDS
If you would like a helping hand when starting out, there are various Scops ( sociétés coopératives et participatives) and organisations offering portage salarial services, that will take care of much of the financial and fiscal administration in return for a percentage of turnover. They can be particularly valuable if you’re struggling to understand the French business system initially!