Starting A Business in France
Could We? Yes we can!
Starting a business in France is not as complicated as it first appears. The same as starting a new business in the UK, there are steps to complete to have a legal and functioning business. Here is a list of the most prominent areas.
- A business plan. The main use is obvious but in France, the banks and account managers are much closer to clients than the UK. This will act as a portfolio to present to the bank manager when you application goes into the bank.
- The type of business. In the UK for example, we have Limited, LLC, Sole-trader etc, in France there is a similar structure.
- Register your new company. This can be done with a lawyer or a registered company formation agent.
- Arrange a meeting with a French bank to open a Business Account. Arrive with all your new business information and plan. Be aware there is a minimum amount to open a Business Account
- Final parts include publishing an announcement in an authorised news paper, receiving your tax code and certificate of corporation and finally, get an authorised French Accountant.
What if I want to setup a small business with just one or two people from home?
There is an alternative and often better solution, The Micro Entrepreneur.
What is a micro-entrepreneur?
A micro-entrepreneur is an individual who sets up as either an entreprise individuelle or an EURL and opts for a simplified tax system called the “régime fiscal de la micro-entreprise (micro-BIC1 or micro-BNC2)”. Since 2016, you can also opt for the standard system (régime classique), but paying minimal contributions. This can be in a commercial or trade capacity (run by the RSI) or as a professional freelancer (pension rights run by CIPAV). The main advantage is that the simplified tax system allows you to pay contributions in arrears and only on what you have earned. If you earn nothing, you don’t pay anything. The contributions are a set percentage of turnover which varies depending on the activity.
The system is particularly suited to people who want to test a project or as a secondary activity for an employee or a pensioner to supplement their income.
Micro-entrepreneurs cannot register for TVA (VAT), so are exempt from the associated paperwork.
Who can’t be a micro-entrepreneur
- Anyone who is already registered as a professional running a company
- Anyone who is already registered as an entreprise individuelle and not subject to the simplified tax system
- Estate and property agents
- Landlords of buildings let unfurnished for commercial/professional use
- Firms renting equipment and durable consumer goods
For some professions you are not allowed to set up a business unless you have either a qualification or at least 3 years’ experience which needs to be proved by pay slips, contracts or a letter on headed paper from a firm testifying that you have worked for them. This applies to a lot of trades jobs such as builders so do check with the relevant body what restrictions apply before investing a huge amount of time into setting up.
Here is a list that shows restricted types of business startups.
In order to carry on being registered under the system, your turnover (ex-tax of merchandise, goods and services) must not be more than the official limits, which in 2018 are now:
- In a service based business, or a ‘professional’ activity, and for unclassified gîte accommodation the turnover cannot exceed €70,000 per year.
- Those whose main activity is either commercial sales based, cafe, restaurant, hotel, chambre d’hôte and classed furnished accommodation, have a turnover limit of €170,000 per year.
A great way into running your own business.