Information on how to set up as a sole trader or start a small business in France re-selling goods or materials, or offering services. With an explanation on the taxes due, invoicing and book-keeping obligations.
Information on how to set up as a sole trader or start a small business in France re-selling goods or materials, or offering services. With an explanation on the taxes due, invoicing and book-keeping obligations.
As explained in AngloINFO's INFOrmation Page on Starting a Business in France, any for-profit activity in France - regardless of the amount of revenue generated - requires a legal structure, with the business either:
- registered as an individual operator (sole trader), or
- registered as a company/corporation
January 2009 saw the introduction of a new statut, known as the auto-entrepreneur, which simplifies the process of registering and running the smallest sole-trader businesses.
This applies to those who wish to run a business under the Micro-BIC or Micro-BNC tax régimes, where annual turnover is less than:
- €80,000 for those re-selling goods or materials
- €32,000 for those offering services
Self-declaration
The process of registering an auto-entrepreneur business is simpler than has historically been the case. It is a self-declaration process that can be done
- In person, at the relevant Centre de Formalités des Entreprises (CFE)
- Online, by filling in a sequence of online forms: Click here
If making the self-declaration online, a scanned copy of an approved piece of ID (carte de séjour or passport) is needed for upload at the end of the process. In the absence of this, a photocopy can be posted to the relevant local CFE.
Importantly, those businesses that are commercial or artisanal in nature and would normally require registration with (respectively) the Registre du Commerce et des Sociétés (RCS) or the Répertoire des Métiers (RM) are exempt from such registration if they self-declare as auto-entrepreneurs.
Note: This exemption does not mean that other regulations/restrictions are waived. People wishing to carry out a regulated trade or profession such as hairdressing or building must still be qualified in the eyes of the French state in order to carry out that trade or profession.
Registration - SIREN and SIRET
Following the online submission of the self-declaration an automated receipt is sent from the website, followed (assuming the forms have been completed correctly), by a more formal receipt (récépissé) from the CFE when it is received there. Declarations made in person will receive a paper récépissé. Once the declaration has been processed, the business registration number (SIREN and SIRET) will be supplied and the business is now registered.
Tax and Social Charges - the "Micro-Fiscal" and "Micro-Social" Options
The auto-entrepreneur pays social charges (cotisations sociales) under a system known as the micro-social simplifié. These are quarterly (or, from July 2009, monthly) deductions based directly on the previous quarter's (or month's) turnover. The sums involved are:
- 12% of turnover for those re-selling goods or materials
- 21.3% of turnover for those offering services
- 18.3% of turnover for those in "liberal" professions where their pension is handled by the caisse d'assurance vieillesse de la CIPAV
Additionally, the auto-entrepreneur may opt to pay their income tax under a system known as the micro-fiscal simplifié. Again, payments are monthly or quarterly, based on turnover, and are:
- 1% of turnover for those re-selling goods or materials
- 1.7% of turnover for those considered "commercial" or "industrial"
- 2.2% of turnover for those in "liberal" professions
Assuming there are no additional revenues, this system means the auto-entrpreneur's income tax is fully paid-up on a "pay as you earn" basis, with no tax bill waiting in the future.
Note: Businesses already registered under the Micro-BIC or Micro-BNC tax régimes can register online to move over to the micro-social simplifié system and, in due course, to the micro-fiscal simplifié system.
Value Added Tax
The auto-entrepreneur cannot charge nor reclaim value-added tax (TVA). The notice TVA non applicable, article 293 B du CGI must appear on all invoices.
Taxe Professionnelle
The auto-entrepreneur is exempt from taxe professionnelle for the first three years of operation.
Book-keeping
The auto-entrepreneur is required to keep a ledger of all revenues received.
The auto-entrepreneur re-selling goods or materials, or providing furnished accommodation must also keep a ledger of all business expenses.
Copies of all invoices, receipts and formal offers/quotations must be retained.
Limiting Liability
While the auto-entrepreneur has unlimited liablity regarding the operation of the business, it is possible to make, in the presence of a notaire, a déclaration d’insaisissabilité, protecting the business-person's home, and also any assets not directly associated with the running of the business, from seizure.
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