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Setting up a Business

Starting your own business is a challenge, and starting up in France is no exception. There are many different Tax regimes to choose between, and you are registered depending on what your business entails.

January 2009 saw the introduction of a new business regime "Auto entrepreneur" in an attempt to simplify the process. This new regime allows you to register your business on line. Once set up you declare your revenue on line and pay your cotisations on a 3 monthly basis (based on your actual earnings). "The auto-entrepreneur" is not for everyone, however it should suit the majority of new start-ups. Click here for more information.This system does not licence you to work in fields for which you are not qualified and you must still be registered with the appropriate Chambre. It has come under fire from existing Artisans who argue that they cannot provide competitive quotes or "devis" due to their high cotisation payments. With effect from 1st April 2010 all new start ups on this regime will be required to prove their credentials and to register with the relevant Chambre (the registration fee will be waived). However after 2 years you must contribute to the running costs (approximately 250 Euros per year). It has not yet been made clear as to what will happen to traders already working under this regime.

For the majority of business start-ups you have to attend a course on the tax regime system and the options open to you. This is normally held by the Chamber of Métiers or Chamber of Commerce. It is normally free if you can attend and understand the French course, however there is a fee of around 200 euros if you attend an English course. You need this certificate of completion before you can register your business. In some cases the course is optional. Check with the Chamber of Commerce or Chamber of Métiers. The auto entrepreneur is except from this.

To find your nearest Chamber of Commerce click here

The British Embassy has some useful set up advice

Russell Cooke solicitors have produced a useful fact sheet on setting up a business

When choosing your tax regime ensure that you carefully consider your expected turn over, profit and expenses. Some regimes help the individual but can be expensive in certain circumstances. You can always change to a bigger regime, but you can never go to a lower regime. The new regime mentioned above is being encouraged you "pay as you earn". For more information on "Auto-Entrepreneur" click here

For details of the different business structures and tax regimes click here

Once you have been registered you can commence your commercial activity. Do not advertise or undertake any work until you are registered and have your Siret number .

One of the advantages of setting up a business in France is that you are paying into the French system and can therefore benefit from medical cover and social security cover. If you are an employee your social security contributions (cotisations) are deducted and you come under the umbrella of the CPAM. (Caisse Primaire d'Assurance Maladie).

Click here to find your local CPAM office

CPAM on line

If you have set up your own business you will fall under one of the following:

RSI - Régime Social d' Independents

URSSAF (Union de recouvrement des cotisations de sécurité sociale et d'allocations familiales)

In theory, however, the RSI has replaced URSSAF as a way of simplifying the payment of cotisations.

Cheque d'emploi

It is possible to work under what is known as "Le Cheque d'emploi". This system allows you to be paid for services such as gardening, baby sitting, cleaning etc..

Once you have accumulated 40 hours in any Callender month or 60 hours over 2 consecutive Callender months you will be issued with a social security number. This is the minimum amount of hours required to qualify for social security cover for a year for you and your dependents.

In order to use this system you must be resident in France and hold a French bank account. You need to ask your employer (who also needs to be French resident and hold a french bank account) to ask their bank for a “demande d’adhésion”. They should be complete this form and return it to their bank. They will also be asked to complete an authorisation allowing the CNTCES to deduct cotisations.

Once these forms have been processed (usually a few days) your employer will receive a cheque book of 20 cheques along with 20 Volets sociaux. There will also be pre-addressed envelopes to return the Volets as they are completed.

Your employer must complete your details (as the employee) and the number of hours worked (no 1/2 hours), and the net salary . Note that the hourly rate cannot be lower that that dictated by SMIC. There are then 2 options for contributions:

a. Base forfaitaire - the calculations are made based on the SMIC gross plus 10% for paid leave whatever the net salary. The social cover for you as an employee is less advantageous.

b. Real salary - the contributions are calculated on the gross salary. You as the employee benefit from a much wider social cover with this option.

Working from Home

Before setting up your business from home or rented premises it may be a good idea to check the following:

UTILITIES

Check with EDF or VEOLIA water or with who ever your utilities supplier is. Operating industrial machinery such as lathes, band saws etc may not be possible under a domestic supply. Most commercial installations require 3 phase supply. All suppliers have a commercial tariff and you may benefit from lower unit costs.

PERMISSION

Check with your local Mairie if you can run your business in your chosen location. Apart from being courteous, there may be an issue with noise, excess vehicles or other impact on the area which could lead to complaints from local residents. In the majority of cases the local Mairie's are extremely supportive of new business start ups and can give invaluable advice. Many communes produce a regular publication and you may be able to advertise in it.

FRANCE TELECOM

France telecom are responsible for all the phone line network. Think carefully before moving your service provider away from France Telecom, especially if the number is your business line. Other providers may offer a cheaper service but if there is a fault on the line it's down to France Telecom to fix it. As you are not a "customer" your priority is low. When you have your phone line installed, or set up your business ask France Telecom for a non-geographical number. This will save great expense if you decide to move in the future as not all numbers can move with you. Do you really want the cost of re-printing business cards and sign writing. You will also have to reach out to all those who have seen your old adverts or taken old cards. You may wish to consider a web site.

WEBSITES

Many businesses now have a web site. These can range from simple 1 or 2 page designs with contact details and examples of work or services, to elaborate multi page sites with contact forms and shopping carts. There are many people offering design services and it is possible to build your own site using templates or software programs. Whatever you chose the most important thing to remember is customers need to be able to find you easily. They will not trawl through tens of pages on a search result until they stumble upon you. Ask your designer how they intend to optimise your site. Whilst a basic web site can be built relatively easily with a little knowledge it's the optimisation that takes time and although this can cost a bit more it's an essential expense. See our Directory for professionals who can offer a website building service.

 

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