How do you arrange as self-employed or freelance in France – and what are the professionals and cons of the micro-enterprise system because the French name it? We requested Tracy Leonetti, paperwork skilled and founding father of LBS in France who’ve helped many expats to start out a brand new life in France. Right here she highlights the important thing factors of registering as an auto entrepreneur, self-employed.
Understanding the terminology – Auto-entrepreneur, micro-enterprise, Entrepreneur Individuelle
Auto-entrepreneur (AE), Entreprise Individuelle (EI) and micro-entreprise (ME): once you’re organising as self-employed in France, you’ll come throughout all these phrases. The confusion is because of proven fact that the Auto-entrepreneur was one other aspect of the self-employment system however was merged with ME in 2016. So successfully, these characterize the identical sort of enterprise construction, simply from a unique perspective. A very powerful to know is that every one are self-employed standing.
The ‘Enterprise Individuelle’ is the authorized type for a sole dealer. The’ Micro Entreprise’ is the tax and social construction of a sole dealer.
Phew. I’d prefer to say that’s the exhausting bit over with. It’s not! Although the aim of the ME system is to simplify admin, that is France, and there’s loads of life and paperwork left in that admin job record even when it has been “simplified.”
So, let’s begin by highlighting beneath a number of the key factors of this enterprise construction and the important thing questions my shoppers ask me throughout a session.
Benefits
- Good to check your thought, minimal danger
- No accountant wanted, so much less price
- Simplified fiscal system for tax and social contributions, no surprises
- No VAT to cost (as much as sure earnings limits)
- Entry to healthcare in France from first day of arrange (formalities will nonetheless must be adopted)
Disadvantages
- Restricted earnings ranges
- No discount for prices
- No VAT charged (or deducted) which isn’t good in case you are in gross sales
What are the Earnings ranges for auto entrepreneurs
You might be restricted to a sure degree of earnings as a micro-entreprise, and when you exceed the set quantity, you’ll should scale as much as the following enterprise standing degree.
These limits will be adjusted annually. If you understand you’ll earn greater than the restrict in yr 1, you need to take a look at a unique construction like ‘Entreprise Individuelle au réel’. It’s necessary for me to spend time understanding my consumer’s enterprise in order that I may also help them to decide on the proper construction, when you get it proper up entrance, it will probably save plenty of paperwork down the road. Most individuals simply assume there’s just one method to go – there isn’t, but it surely takes experience to know the proper route.
The earnings limits for an ME differs in keeping with what kind of exercise they’re engaged in – which incorporates the classifications BIC or BNC. BIC refers to industrial and industrial income, BNC refers to non-commercial income.
- €188,700 for the sale of products, gross sales for consumption on the premises and the provision of lodging (excluding furnished leases apart from furnished vacationer lodging or mattress and breakfasts) (1st class);
- €77,700 for the availability of companies falling underneath the class of commercial and industrial income (BIC) or non-commercial income (BNC) (2nd class).
- €15,000 for unclassified furnished vacationer leases
Be aware – there may be an exemption from paying TVA (the French equal of VAT) on companies and gross sales made by the micro-enterprise – so long as you don’t exceed the bounds set €36,800 service actions, €91,900 for gross sales of products, lodging.
How a lot will you pay on what you are promoting earnings?
Like several enterprise in France, you’ll contribute into the social system by way of the URSSAF, the gathering arm for these contributions. The social contributions are collected both month-to-month or quarterly based mostly in your earnings. You merely enter in how a lot you’re earned to the URSSAF on-line declaration system, it’s going to instantly notify you ways a lot you need to pay, you affirm, and the quantity is deducted at a date notified. There are set dates for inputting and when you miss one, chances are you’ll be fined.
The odds are reviewed annually, however the next is an efficient overview of what you should utilize as a information to how a lot social contribution is to be paid:
12.3%: gross sales and buying and selling actions, gites, mattress & breakfast. Industrial companies linked to Chambre de Commerce
21.2%: Handbook actions (hairdressers, electricians, industrial companies & consultancy companies…)
*23.1%: Professionals hooked up to CIPAV underneath BNC system.
* This shall be growing over 3 years for this BNC class as much as 24.6% in 2025, 26.1% in 2026.
How do I arrange my exercise?
Since January 2023 all creations, modifications and shutting of micro-entreprise actions are dealt with from one web site, that is known as the INPI. It’s not the simplest of portals to work with, however I can inform you, after a lot expertise, it’s beginning to work higher.
Portail e-procedures (inpi.fr)
The creation of your exercise is comparatively easy as soon as you understand which class you fall underneath, however that in itself will also be difficult as there are lots of selections of classes. And choosing the proper class is essential as this defines what tax/contributions you’ll pay. Additionally, you will, in fact, must show your ID and deal with in France. Modifications of companies by way of this INPI system are complicated as digital IDs are wanted.
Upon getting created your exercise, your file shall be despatched to a number of completely different organisations (INSEE, CPAM, Tax workplace….). You’ll obtain your SIRET quantity (enterprise registration quantity) which should go on all of your authorized paperwork and invoices. You have to additionally state EI on all of your invoices – a latest ruling.
That is in fact a abstract of organising as self-employed in France and the system typically works properly. But when all of it sounds a bit a lot, too time consuming once you’re making an attempt to get a enterprise up and working, or must spend your priceless time managing and rising the enterprise, assistance is at hand. I’ve helped many many expats over time to arrange all kinds of profitable companies from organising as ME, to work permits, declaring social costs, speaking with varied authorities our bodies assist with tax and authorized necessities and many others.
If you happen to’d like extra info and assist organising what you are promoting in France or administration of what you are promoting, get in contact with Tracy at www.lbsinfrance.com
There’s additionally a really useful LBS podcast which cowl all issues residing in France: buzzsprout.com/LBS
