In this legal framework, you and the business are treated as one legal entity. Your professional and personal assets are merged although you can make a ‘declaration of seizure’ to protect your home. Under this legal structure you can, as from January 2015, set up as a micro-enterprise. This merges the old auto-entrepreneur and micro-enterprise systems.
You can also opt to set up in business as an EIRL (Entrepreneur of Individual Limited Liability) where your personal assets are separate.
In both cases you trade under your own name although you can take on a company or trade name.
If you take on Entreprise Individuelle EI status, you pay tax through your personal income tax return in the category for your business:
• industrial and commercial profits (BIC) for traders and artisans,
• Non Commercial Benefits (BNC) for independent professionals.
If you opt for EIRL status you can choose to pay corporate tax.
It is quite easy to register and run your business as a micro-entreprise. It has simplified tax and accounting requirements and you pay your taxes and social charges online. However, you will pay tax and social charges on any expenses that you invoice so if you are likely to incur substantial costs of this nature, then you should investigate other business set-ups.
Working as a micro-entreprise) is not a legal business structure but a tax status. The legal structure is an Entreprise Individuelle (EI) that is someone running a business as a sole trader rather than as a limited company. You can’t be taxed under this system if you set up a EURL or SARL.
You can set up your business under the micro-entreprise or auto-entrepreneur regime if your turnover is below certain thresholds:
• If your business involves buying and re-selling goods or materials, or setting up a restaurant or bar or furnished accommodation, the threshold is under EUR 82,200.
• If you’re offering services or a ‘professional’ the threshold cannot exceed EUR 32,900 a year.
As a sole trader you have unlimited liability so you will need to make a déclaration d’insaisissabilité which will protect your home and other assets from being seized by creditors if you got into financial difficulties.
All businesses in France need to have a liability insurance called assurance responsabilité professionnelle.
You can register your business as a self-employed in three ways:
1. You can visit the appropriate Centre de Formalités des Entreprises (CFE). There are different CFE for each type of business activity so find the right one for your business. On this list you can find the correct CFE for your type of business https://www.insee.fr/en/statistiques?debut=0&categorie=1
2. Send in this form https://www.service-public.fr/professionnels-entreprises/vosdroits/R19814 to the appropriate CFE.
3. Online, here, http://www.lautoentrepreneur.fr/adherez.htm through a series of forms on the official portal for auto-entrepreneurs.
You’ll need to take in or send in a photocopy or upload a scan of your official ID or passport when you register. You may also have to prove that you have professional insurance for example, the assurance décennale for builders.
If you want to set up a business as a trades person (artisan), you may be required to undertake a four or five-day training course (Un stage de préparation à l'installation or SPI), meetings or workshops in order to learn about different aspects of running your own business. These courses cost around EUR 250 – ask your Chamber of Commerce.
Some professions (including accountants, vets, hairdressers, builders and even wine dealers) are regulated in France. If your business is one of these regulated professions you will have to:
• be registered with the appropriate organisation
• prove that you have the right qualifications, experience and insurance liability before you can work.
At this website you can check if the business you want to set up is regulated: https://www.afecreation.fr/index.php?pid=803
It is possible to work legally in France as a freelance or independent contractor in some fields – writing or editorial, translating, tele-marketing, web design, business consulting and IT, either working remotely at home or based in an office – without registering as a business but by working through a portage salarial. You sign a contract with a portage company (an umbrella company), who in effect becomes your employer and handles most of the bureaucratic paperwork associated with self-employment in France. You still find your own clients and agree payment terms in an independent freelance role but your invoices and payment (with a payslip) are arranged via the portage company, under which you are classed as an employee (salarié).