How to Start a Business in France
Starting a business in France is confusing and complicated, due to France's renowned bureaucracy. Overall, France is not very entrepreneur-friendly. Only recently has this begun to change, with the Auto-entrepreneur option for small businesses. French-Property.com, a website aimed a English speakers in France that offers advice on property and living in France, states that France has also started to streamline the bureaucracy associated with setting up a business in the country, reducing many requirements. If you plan to have employees, then plan your business carefully. Employers must pay high social contributions for their employees and employees are well protected by the law.
- Difficulty:
- Moderately Challenging
Instructions
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Plan your business carefully with thorough research. France regulates everything. You may have to join various societies to run a business in the industry you want. In fact, France is so regulated that everyday activities such as horse-riding lessons or playing tennis require you to join a club. Make sure the industry you want to enter into is not saturated. Many expats moving to France think a great way to earn income is to run a gite business. A "gite" is the word used in France for vacation rental. It is popular for residents to buy property with more than one house on it and rent the second during the peak tourist season. This idea is so common that France is saturated with gites, not leaving much room for new gite businesses.
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Plan your finances. The French tax system is complicated, so it is a good idea to enlist the help of a French accountant that is familiar with starting businesses. He can explain how the various social charges work and tell you how to minimize what you have to pay.
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Get business advice. There is help out there for those who want to set up a business in France. Take advantage of all the information available before getting your feet wet. Go to your local Prefecture and ask for business advice and if there is any financial assistance available. The Prefecture is the main administration office located in the capital of the department, similar to a state capital office. For example, the Prefecture of the Aude department is in the city of Carcassonne. If your Prefecture is far away you can visit the Sous Prefecture, a smaller administration office found in larger towns, much like a town hall in the United States. You can also go and speak to your local mayor. Every village in France, even if it has a population less than 100, has a mayor.
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Chose the business type you want to run. France has four options for businesses: sole-trader, known as Enterprise Individuelle; single shareholder limited liability, called Enterprise Unipersonelle a Responsibilite Limitee; joint stock limited liability, called a Societe; and Auto-entrepreneur, which was introduced in 2009. If you are working as an artisan under the Auto-entrepreneur system, you must register with the Registre des Metiers, according to the website Start Business in France. In order to register with the Registre de Metiers as an artisan, you must have the relevant qualification or the required number of years of experience. Auto-entrepreneur makes paying tax and social contributions easy; however, you pay tax on your turnover, which is quite low. To be eligible for Auto-entrepreneur there is also a fairly low limit on what your turnover can be. The turnover rates as of 2010, according to Auto-entrepreneur.fr, are 32,000 euros for commercial and industrial business and 80,000 euros for businesses involving the sale of goods, hotels, food, and furnished rentals.
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Register your business. In France a business must be registered with the Centre de Formalites des Enterprises (CFE). There are different CFEs depending on what type of business you are starting. When your registration is complete you will receive a SIRET number, which must be printed on all business-related documents, such as invoices. A SIRET number is your business's registration number. It is proof that you are a legally registered business. It is similar to the Employer Identification Number that businesses must get in the United States, but French companies can have multiple SIRET numbers to cover the different industries they are in.
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Send the appropriate documents to the CFE. If you want to set up as a self-employed business in France you must submit a demande d'immatriculation (application for registration), proof of your address and identity, proof of qualifications, and letter from your spouse stating she understands her liability to debt, according to France.AngloInfo.com, a website specializing in advice about living and working in France. Each business type will require certain similar documents. It may also require liability insurance and a license. You can set up your business online at apce.com. The site is only in French. It has lots of information that is helpful to those starting a business in France. Once you have all your paperwork approved and the right taxation system in place you can being operating your business. The tax system you are placed under depends on the specific type of business you set up and its turnover, according to FrenchEntree.com. Taxes that you will have to consider are corporation tax of up to 33 1/3%, Contribution Economique Territorial (CET), and TVA. TVA is known as VAT (or value-added tax) in English. It is comparable to sales tax in the United States. CET, which replaced the more-complicated-to-calculate taxe professional in 2010, is a tax levied on some businesses. This special tax is used in the local communities to provide and improve services.
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Tips & Warnings
Don't try to set up a business in France without help. The system is very complicated and confusing. Hire an accountant and visit your local Prefecture.
Related Searches
References
- French-Property.com: Introduction to Starting a Business in France
- Start Business in France website: Auto-entrepeneurs: artisans to be listed on the Chambre de Metiers
- Anglo Info: Starting a Business in France
- FrenchEntree: Tax, social security, banking and insurance
- Auto-entrepreneur: Questions (in French)
Resources
- Photo Credit Carte France Camaieu Rose image by Aimohy from Fotolia.com
